Blockchain/Digital Currency as part of 'The Great Reset'

Moderators: Elvis, DrVolin, Jeff

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby Elvis » Sat Mar 27, 2021 3:26 am

More on CBDC —

Wired via https://archive.is/nlWAh

03.16.2021 07:00 AM
As Digital Currency’s Popularity Rises, So Do Privacy Fears
Backers see a way to reach the unbanked. But any system could give the government a record of every dollar you spend.


There’s big business in distributing your stimulus check. Most people will get it through direct deposit at a bank. But it could also arrive via a payment app, like Venmo or CashApp, which have vied to receive your “stimmies” over the past year with promises of cash advances that cut down on the wait. Then there are checks printed and mailed by the government. But that process is slow and usually means some company has to cash it for you, maybe for a fee. Depending on whom you ask, the system for handling your stimulus looks like classic American competition or predation.

Last spring, during debate over the first round of payments, some progressive lawmakers proposed an alternative: The government would distribute relief directly as digital dollars. This would require no extra printing of physical dollars or minting of coins; no checks would need to be mailed. The government would open accounts for people directly at the Federal Reserve, which people could access for free with the help of local banks or even the post office.

It’s an odd concept, considering most dollars we deal with are already electronic. But those Venmo balances and credit card debts are not actual dollars and cents; they’re representations of money held by or owed to banks. When we deposit money in a checking account or buy GameStop stock, those banks adjust the lines on their ledgers, and occasionally physical dollars change hands between them. But the only time we experience the Platonic ideal of the US dollar is through physical coins and paper.

A digital dollar, however, would have an inherent value, just like physical cash. It would be the thing itself, not a representation of something else. There are many forms that could take. One option, and perhaps the easiest to visualize, would involve a digital token stored on your phone or some other piece of hardware, like a debit card. When you buy something, you would send that token electronically to the other person, not unlike handing a physical dollar to a cashier. Or it could be account-based, where transactions involve credit and debits directly to your Federal Reserve account.

Some countries, including China and Sweden, are testing versions of this idea. The Bahamas has already released a central bank digital currency, or CBDC, which it calls the Sand Dollar. Dozens of others are considering experiments. In the US, the digital dollar proposal didn’t end up in last year’s relief package, but both Federal Reserve chair Jerome Powell and Treasury secretary Janet Yellen have spoken approvingly of the concept in recent months. There are plenty of details to work out. Who will oversee digital coinage? How will it connect to private banks and payments services? Will anybody even care to use it? “It has to be as good as the other payment systems or even better,” says Peter Bofinger, an economist at the University of Wurzburg in Germany. No guarantees there.

Another problem: Digital payments have a hard time staying private. When we make payments using bank accounts and credit cards, we make a Faustian bargain: convenience in exchange for the knowledge that our transactions will be visible to the companies involved. Every swipe and transfer leaves a trail. But we also know that our information is at least a few layers removed from law enforcement. Even government officials can see the problem with removing that distance. “It’s not something that would be particularly attractive in the United States context,” Powell told lawmakers last year. “It’s not a problem in China.”

In China, officials have coined a concept of “controllable anonymity” for the digital yuan, in which participants in transactions are anonymous to each other, but the central bank can unmask all those transactions. There are ways that governments could make those transactions more private—ways of organizing these systems and advanced cryptography to reduce the amount of information they share. But it’s hard to make guarantees. That’s unlike physical money, which works offline—and, for the most part, anonymously.

Helping people without bank accounts “sounds very bleeding heart, but what if the end result is a surveilled bank account system?” says Rohan Grey, a professor of law at Willamette University who has worked on digital dollar proposals, including the one last spring. “Suddenly now you’re talking about building a monetary system where every transaction could be stored as data and create a robust social graph of the United States.”

Those concerns are as old as digital money. In 1994, my WIRED colleague Steven Levy profiled David Chaum, a cryptographer and inventor of a digital form of money called e-cash. His idea was that, instead of papers and coins, people would carry around digital tokens stored in dedicated devices that might look like a debit card or a key fob, or they could send them by email. (This was well before smartphones.) Chaum’s primary concern was how to keep those transactions secure and private using cryptographic controls. But at the time, a digital dollar issued by the US government wasn’t in the cards. “When I called a spokesperson for the Federal Reserve to ask about electronic cash, he laughed at me,” Levy wrote at the time. “It was as if I were inquiring about exchange rates with UFOs.”

That was before payments apps like Paypal, before Bitcoin, and before Facebook proposed Libra, now called Diem, which promises a form of private currency designed to remain within the walls of its vast digital fortress. It was before, in other words, central banks had much competition. In China, for example, private payment systems such as Alipay and WeChat Pay are near-ubiquitous. A government-issued digital yuan could allow competitors, such as traditional banks, to muscle their way into payments and would also potentially give the Chinese government more visibility into the nation’s economy.

Another impact of that competition is the dwindling use of physical cash. In Sweden, for example, officials view the e-krona as a way to ensure that money remains accessible to the public even in a world where physical cash is hard to come by. Otherwise, there might come a time when buying groceries, saving for retirement, or receiving a welfare check would depend on the strength of private financial networks. Even as it fades from view, public money also offers a kind of backstop in dire times. During the pandemic, fewer people are using cash, but the amount in circulation has actually increased as people stock up from ATMs. Cash is a safe haven—risk-free, so long as you pick a good hiding spot.

But would a digital currency be a replacement for cash? In a paper published last month titled “On the Possibility of a Cash-Like CBDC,” researchers at Sweden’s Riksbank argued that, no, it wasn’t really possible. The reason: privacy. Regardless of how a digital currency is designed, they wrote, someone would have to keep track of transactions to prevent what’s known as the double-spend problem—a digital equivalent of counterfeiting. In other words, digital transactions need to be tracked using some kind of ledger. And with that, it would be impossible to ensure absolute privacy, even with efforts to conceal details of transactions or the identities of the parties involved. With bits and bytes, there’s always the potential for a backdoor or a leak.

In theory, it would be possible for people to transact without leaving a trace, using forms of secure hardware, on which people could load their digital dollars and transact without connecting back to any centralized system. But current forms of secure hardware aren’t fault-proof and raise security concerns, explains Neha Narula, director of the Digital Currency Initiative at MIT, whose research team is working with the Federal Reserve in Boston to develop digital dollar prototypes. Privacy should be a top priority for any payment system, but setting sights on perfection can set up false expectations. “We’re approaching it as digital cash. But that doesn’t mean we’re trying to get beyond cash or replace cash,” she says.

It’s possible to get very good privacy for digital payments, says Ari Juels, a cryptographer at Cornell University who has studied digital currency designs for central banks. But it’s unclear how much privacy governments will permit and how much privacy will compromise efficiency and security. In a recent paper, Juels and colleagues evaluated the potential of privacy-preserving techniques such as zero-knowledge proofs, used in cryptocurrencies like zCash, for wider public payments. Scaling those methods will be difficult, and there’s no guarantee that they can’t be gamed or hacked—perhaps unwittingly to users. “I am not too optimistic about technology alone solving this problem,” Juels says. He thinks the most robust protections will likely come from laws that prevent the government from unfettered access to transactions made using private banks or credit cards.

If anything, the privacy debate reinforces the importance and uniqueness of cash as a financial instrument. “The coins in your pocket are the best guarantee of your freedom,” Grey says. But people should continue pushing for offline and anonymous digital cash, he adds, despite the technical hurdles. A “near enough is good enough” strategy, as he puts it, may lull people into thinking that the government is providing a digital equivalent to physical cash and stop asking important questions about the differences. “Is there a list of transactions that somebody can de-anonymize? Can somebody turn that system off?” he asks. “Average people need to be thinking about those questions.” As for anything that involves storing your financial history at the Federal Reserve, the Swedes have it right, he says: Don’t dare call it cash.





I haven't read this 110-page paper past the Abstract and glancing over the Contents, but it looks pretty exhaustive?

https://www.brookings.edu/wp-content/up ... or-web.pdf

GLOBAL ECONOMY & DEVELOPMENT WORKING PAPER 140 | July 2020

Design choices for Central Bank Digital Currency
Policy and technical considerations


Abstract
Central banks around the world are exploring and in some cases even piloting Central Bank Digital Currencies (CBDCs). CBDCs promise to realize a broad range of new capabilities, including direct government disbursements to citizens, frictionless consumer payment and money-transfer systems, and a range of new financial instruments and monetary policy levers.

CBDCs also give rise, however, to a host of challenging technical goals anddesign questions that are qualitatively and quantitatively different from thosein existing government and consumer payment systems. A well-functioning CBDC will require an extremely resilient, secure, and performant new infras-tructure, with the ability to onboard, authenticate, and support users on amassive scale. It will necessitate an architecture simple enough to supportmodular design and rigorous security analysis, but flexible enough to accommodate current and future functional requirements and use cases. A CBDC will also in some way need to address an innate tension between privacy and transparency, protecting user data from abuse while selectively permitting datamining for end-user services, policymakers, and law enforcement investigations and interventions.

In this paper, we enumerate the fundamental technical design challenges facing CBDC designers, with a particular focus on performance, privacy, and security. Through a survey of relevant academic and industry research and deployed systems, we discuss the state of the art in technologies that can address the challenges involved in successful CBDC deployment. We also present a vision of the rich range of functionalities and use cases that a well-designed CBDC platform could ultimately offer users.
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
User avatar
Elvis
 
Posts: 7413
Joined: Fri Apr 11, 2008 7:24 pm
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby Elvis » Mon Apr 05, 2021 10:01 pm

I neither like nor trust the Atlantic Council, but this is an interesting summary. Article is undated.

https://www.atlanticcouncil.org/economy ... ital-euro/

A Digital Euro

A digital euro project is imminent, while the US has yet to officially launch their digital dollar project. Senior Fellow Marc-Olivier Strauss-Kahn asks and answers three important questions: What, why and how?

Marc-Olivier Strauss-Kahn
Nonresident Senior Fellow

A digital euro project will likely be launched in mid-2021, while the United States has not yet officially projected a digital dollar. Three main questions arise when looking at such a project: First, what is it? It is like “digital cash”, an electronic claim on the central bank, accessible to all. Second, why is it needed? Mainly to preserve the sovereign’s role in creating money and to enhance payment efficiency and financial inclusion in a digitized world. Third, how would it be designed? Some issues, including the extent of public-private partnerships or the reconciliation of privacy versus compliance, and the legal framework, remain to be solved.

In mid-2021, the president of the European Central Bank (ECB), Christine Lagarde, is expected to announce whether the ECB will launch a project to digitize the euro. I bet she will …cautiously, but presumably sooner than the United States Secretary of the Treasury, Janet Yellen, might for a digital dollar. Yet, in contrast to the relatively little interest her predecessor gave to such a project, Secretary Yellen has not rejected a recent call by the Atlantic Council to digitize the dollar. Meanwhile the US Federal Reserve is conducting preliminary research about it.

The ECB decision is likely to generate buzz around the possibility of central bank digital currency (CBDC), or “digital cash.” This type of attention tends to come with a lot of “fake news”. One can already imagine the headlines: “Cash is dead!” … False! “Better Bitcoin or Diem.” … No! “The electronic euro already exists; debit cards are the same!” … Wrong!

Thus, this educational summary on “what, why, and how a digital euro” focuses on use in retail (i.e. for the public), leaving aside a wholesale CBDC (reserved to interbank use,). The same is done in the ECB Report issued in October 2020, on which this summary builds.

1. What is a CBDC?

A CBDC is like “digital cash,” a claim on the central bank (CB) that is as safe as banknotes, but electronic like scriptural payments via banks. It will add a new and safe means of payment as legal tender.

more at link


Includes graphics...
Image
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
User avatar
Elvis
 
Posts: 7413
Joined: Fri Apr 11, 2008 7:24 pm
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby Grizzly » Sat Apr 17, 2021 4:25 am

“The more we do to you, the less you seem to believe we are doing it.”

― Joseph mengele
User avatar
Grizzly
 
Posts: 4722
Joined: Wed Oct 26, 2011 4:15 pm
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby PufPuf93 » Fri Apr 23, 2021 4:13 pm

https://www.msn.com/en-us/money/markets ... r-BB1fYMY2

Business Insider

'Black Swan' author Nassim Taleb says bitcoin is an open Ponzi scheme and a failed currency

ilee@insider.com (Isabelle Lee) 2 hrs ago


Nassim Taleb doubled down on his view that bitcoin is a Ponzi scheme and a failed currency.

Some analysts view the cryptocurrency as a hedge against inflation.

A currency not backed by a government is "just speculation" and a "game," the author said.

The "Black Swan" author Nassim Taleb doubled down on his view that bitcoin is an open Ponzi scheme and a failed currency in a CNBC interview on Friday.

"There's no connection between inflation and bitcoin," Taleb told CNBC, adding that everyone knows bitcoin is "a Ponzi."

Some analysts view the cryptocurrency, often referred to as digital gold, as a hedge against inflation, highlighting its similarities with the precious metal.

"If you want to hedge against inflation, buy a piece of land," Taleb said. "The best strategy for investors is to own things that produce yields in the future. In other words, you can fall back on real dollars coming out of the company."

He also said bitcoin had failed in its supposed role as a replacement for government-backed money, mainly because of its volatility. The author said he'd been "fooled" into thinking it could be a viable alternative to fiat currency but realized that a currency not backed by a government is "just speculation" and a "game."

"I was told it was going to be a currency," he said, but "you don't replace the currency with something that's so volatile that you can't really commit to a transaction in it."

Bitcoin's price has swung wildly recently. The world's largest cryptocurrency by market capitalization inched near $65,000 ahead of Coinbase's listing on April 14. Less than 10 days later, bitcoin slid below the critical $50,000 level, extending losses for the seventh day in a row.

The decline below $50,000 has bitcoin testing a new technical support level that could signal continued weakness, especially after its 50-day moving average failed to hold as support.

The broader crypto market has come under pressure after reports said this week that US President Joe Biden would look to double the capital-gains tax rate for wealthy investors.
User avatar
PufPuf93
 
Posts: 1884
Joined: Sun Sep 05, 2010 12:29 am
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby DrEvil » Sat Apr 24, 2021 5:24 pm

US dollar: fiat currency backed by the US army
Bitcoin: fiat currency backed by wishful thinking

Fight!
"I only read American. I want my fantasy pure." - Dave
User avatar
DrEvil
 
Posts: 3972
Joined: Mon Mar 22, 2010 1:37 pm
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby Agent Orange Cooper » Sat Apr 24, 2021 9:57 pm

Taleb is a fraud who doesn't understand Bitcoin at all.
User avatar
Agent Orange Cooper
 
Posts: 610
Joined: Tue Oct 06, 2015 2:44 am
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby BenDhyan » Sat Apr 24, 2021 11:15 pm

I am skeptical of the claim of Bitcoin mining energy consumption. Let's have a look.

The claim is that Bitcoin mining uses 129 terrawatt hours (TWh) of electrical energy.
https://www.visualcapitalist.com/visualizing-the-power-consumption-of-bitcoin-mining/
Name ................Annual Electricity Consumption (TWh)
Bitcoin network ............129


!29 TWh is the equivalent of 129,000,000,000,000 watts/h

Let's look at the power used by the NSA Utah Data Center. it is 65 megawatts/h.
https://www.nfinit.com/how-much-can-an-nsa-data-center-store/
The Utah data center is reportedly slated to use up to 65 megawatts of power, or as much as the entire city of Salt Lake itself.


65 MWh is the equivalent of 65,000,000 watts/h

So Bitcoin mining uses 2,millions times as much electrical energy as the NSA data center. Here is a pic of the place, note the size of the car for comparison with the size of the buildings.

Image
NSA Data Centre in Utah

So Bitcoin mining uses the same amount of electrical energy as would 2,000,000 of these NSA data centers, I don't think so!
Ben D
User avatar
BenDhyan
 
Posts: 867
Joined: Wed Apr 12, 2017 8:11 pm
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby DrEvil » Sun Apr 25, 2021 5:37 am

Agent Orange Cooper » Sun Apr 25, 2021 3:57 am wrote:Taleb is a fraud who doesn't understand Bitcoin at all.


But he's not wrong on the volatility issue. No one in their right mind would use it as a currency the way it keeps bouncing up and down (yes, I know Tesla accepts bitcoin, but only as a proxy for US dollars).
"I only read American. I want my fantasy pure." - Dave
User avatar
DrEvil
 
Posts: 3972
Joined: Mon Mar 22, 2010 1:37 pm
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby Elvis » Sun Apr 25, 2021 7:36 pm

DrEvil wrote:Bitcoin: fiat currency backed by wishful thinking


Bitcoin is not a fiat currency, it's a commodity-based financial asset that must be "mined."

The whole idea of Bitcoin was to bypass fiat currencies. A great step backwards, imo.

I'd add that the US fiat currency isn't really backed by military force, it's backed by taxation; the government agrees to accept it back in tax payments.


WRT to electricity required for bitcoin mining, I read that the last bit of bitcoin to be mined tales exponentially more electricity to mine; apparently that's one reason the remaining bitcoin potential goes un-mined. Anyone with details please chime in.
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
User avatar
Elvis
 
Posts: 7413
Joined: Fri Apr 11, 2008 7:24 pm
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby BenDhyan » Sun Apr 25, 2021 7:58 pm

Elvis » Mon Apr 26, 2021 9:36 am wrote:
WRT to electricity required for bitcoin mining, I read that the last bit of bitcoin to be mined tales exponentially more electricity to mine; apparently that's one reason the remaining bitcoin potential goes un-mined. Anyone with details please chime in.

My point is that if Bitcoin mining is actually using anywhere near 129 TWh electrical energy, given what the size of a 65 MWh data processing site looks like, the physical existence of Bitcoin mining data processing centers equivalent of 2 million Utah NSA data processing centers must make its presence felt in the form of publicly available evidence, eg. a list, locations, pictures, specs, electrical power consumption of each, etc.. Without that, it is merely a baseless and incredible claim which does not pass the smell test.
Ben D
User avatar
BenDhyan
 
Posts: 867
Joined: Wed Apr 12, 2017 8:11 pm
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby Joe Hillshoist » Mon Apr 26, 2021 1:27 am

BenDhyan » 26 Apr 2021 09:58 wrote:
Elvis » Mon Apr 26, 2021 9:36 am wrote:
WRT to electricity required for bitcoin mining, I read that the last bit of bitcoin to be mined tales exponentially more electricity to mine; apparently that's one reason the remaining bitcoin potential goes un-mined. Anyone with details please chime in.

My point is that if Bitcoin mining is actually using anywhere near 129 TWh electrical energy, given what the size of a 65 MWh data processing site looks like, the physical existence of Bitcoin mining data processing centers equivalent of 2 million Utah NSA data processing centers must make its presence felt in the form of publicly available evidence, eg. a list, locations, pictures, specs, electrical power consumption of each, etc.. Without that, it is merely a baseless and incredible claim which does not pass the smell test.


If you distribute 129TWh of electrical energy across the planet, ie everywhere its being mined then what does that look like?

BTW - that figure is something like half the daily use of networks and the internet (250TWh) so it sure seems high.
Joe Hillshoist
 
Posts: 10594
Joined: Mon Jun 12, 2006 10:45 pm
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby BenDhyan » Mon Apr 26, 2021 2:24 am

Yes good one Joe, given the obvious evidence of the ubiquitous presence of global networks and internet systems and the massive number of users involved, if that uses 250TWh where on earth is the evidence of the massive number of bitcoin data processing centers that would need to exist to use half of that electrical energy?
Ben D
User avatar
BenDhyan
 
Posts: 867
Joined: Wed Apr 12, 2017 8:11 pm
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby BenDhyan » Mon Apr 26, 2021 6:17 am

Another good example, it is said that Bitcoin mining uses more electrical energy than Argentina. Now I consider that there is plenty of evidence around to show that Argentina generates and uses a lot of electricity, with a population of 47 million people, it has numerous cities and towns, lots of industries, etc.. So if I am told Argentina uses a 115TWh a year, I am inclined to accept it as a fair claim. But if someone tells me Bitcoin uses more electricity than Argentina, I naturally want to see as credible evidence for all the electricity using bitcoin mining tangible assets as I see for all the electricity using tangible assets Argentina. Where is it?
Ben D
User avatar
BenDhyan
 
Posts: 867
Joined: Wed Apr 12, 2017 8:11 pm
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby DrEvil » Mon Apr 26, 2021 6:26 am

Elvis » Mon Apr 26, 2021 1:36 am wrote:
DrEvil wrote:Bitcoin: fiat currency backed by wishful thinking


Bitcoin is not a fiat currency, it's a commodity-based financial asset that must be "mined."

The whole idea of Bitcoin was to bypass fiat currencies. A great step backwards, imo.

I'd add that the US fiat currency isn't really backed by military force, it's backed by taxation; the government agrees to accept it back in tax payments.


WRT to electricity required for bitcoin mining, I read that the last bit of bitcoin to be mined tales exponentially more electricity to mine; apparently that's one reason the remaining bitcoin potential goes un-mined. Anyone with details please chime in.


My understanding is that a fiat currency is a currency with no intrinsic value, either backed by a government (dollar) or by a mutual agreement that it has value (bitcoin), but you're right that it's really an asset, as it's pretty much useless as a currency. It has too many downsides, like volatility, transaction volume, and the *minor* problem of being unable to reverse transactions.

As for the military thing, it was more a jab at the US tendency to bomb the shit out of anyone who threatens the US dollar's position as a global currency.

Here's a nice overview of the electricity consumption:
https://cbeci.org/

Their estimates range from 38.99 TWh to 428.58 TWh, with their best estimate at 124.60 TWh.
"I only read American. I want my fantasy pure." - Dave
User avatar
DrEvil
 
Posts: 3972
Joined: Mon Mar 22, 2010 1:37 pm
Blog: View Blog (0)

Re: Blockchain/Digital Currency as part of 'The Great Reset'

Postby BenDhyan » Mon Apr 26, 2021 7:08 am

DrEvil » Mon Apr 26, 2021 8:26 pm wrote:Here's a nice overview of the electricity consumption:
https://cbeci.org/

Their estimates range from 38.99 TWh to 428.58 TWh, with their best estimate at 124.60 TWh.


What's nice about it, I see no hard evidence of where this bitcoin hardware is that is using all this power? Now someone could do a study based on some approved scientific methodology that shows the global electricity usage due to housewives cooking the family meal, cakes, etc., in a year exceeds Argentina's power usage. Now that may be credible but for the study to be scientific, it would need to show the actual numbers of housewives and where they live and the type of stove, etc., etc..But the Cambridge study does not tell us who these bitcoin miners are, what equipment they are using, etc. I don't mean some computer estimate, I mean real names and locations, equipment type, wattage ratings, etc.., something that is verifiable, an actual scientific study. The Cambridge article is not scientific imho, and I can not imagine any scientific journal touching it as it stands.
Ben D
User avatar
BenDhyan
 
Posts: 867
Joined: Wed Apr 12, 2017 8:11 pm
Blog: View Blog (0)

PreviousNext

Return to General Discussion

Who is online

Users browsing this forum: No registered users and 40 guests