Hacker News new | past | comments | ask | show | jobs | submit login
The potential Orwellian horror of central bank digital currencies (adamseconomics.com)
317 points by DocFeind 20 days ago | hide | past | favorite | 212 comments

There was an IMF video clip with BIS director Carstens commenting on CBDCs last year, https://meetings.imf.org/en/2020/Annual/Schedule/2020/10/19/...

> With cash, we don't know who is using the 100 dollar bill today ... a key difference with CBDC is that the central bank will have absolute control on the rules and regulations that determine the expression of that central bank liability .. also we will have the technology to enforce that ... if an advanced economy issues a CBDC, and someone in a 3rd country wants to use it, it will require the consent of the central bank of the residence of that person, therefore the degree of control will be far bigger.

Video on the IMF site is not working, here's a YT copy (thanks @toomuchtodo): https://www.youtube.com/watch?v=mVmKN4DSu3g&t=1451s

In a March 2021 speech, Carstens made a similar point, https://www.bis.org/speeches/sp210331.pdf

> It is crucial to trace transactions, particularly large ones, to an individual or entity. For account-based CBDCs, issuing central banks would retain control over cross-border usage. Restricting non-residents’ access reduces the risk of volatile flows, and of currency substitution in recipient economies.

Well-intentioned initiatives like Linux Foundation https://www.goodhealthpass.org/ or EU digital health certificate or Apple iOS 15 digital driver's license (https://www.androidpolice.com/2021/06/07/apples-ios-15-walle...) can all be drafted into the service of CBDC initiatives which require digital identity for digital currency wallets.

I think people have to recognize that both digital technology and the process of "modernity" and state-formation of the 20th century make it a lot harder for unsurveiled spaces to exist because suddenly everyone is operating in the same "space", a single market.

There used to be a rough equilibrium that it was difficult to move large amounts of money around, especially internationally, but small amounts of cash were totally invisible to the state. This ensured a certain amount of stability; the state control could be exercised at the border, where anything of significant value had to be declared to customs, but inside the state you could go about your business. It was pretty difficult for a state to spin up a subversive organisation or competing industry inside another state's borders. Conversely, to commit a large crime required serious planning to move the money, and it was infeasible to move it overseas.

Technology is forcing the dichotomy towards either ubiquitous surveillance of absolutely every transaction, versus increasingly large "perfect" crimes carried out by people who are untouchably overseas.

> There used to be a rough equilibrium that it was difficult to move large amounts of money around, especially internationally

Apparently not that difficult with the active support of banks (the B in CBDC), https://www.buzzfeednews.com/article/jasonleopold/fincen-fil...

> A huge trove of secret government documents reveals for the first time how the giants of Western banking move trillions of dollars in suspicious transactions, enriching themselves and their shareholders while facilitating the work of terrorists, kleptocrats, and drug kingpins. And the US government, despite its vast powers, fails to stop it.

Even criminal convictions have little effect beyond fines, https://wallstreetonparade.com/2020/09/3-count-felon-jpmorga...

> Every American should be horrified by this latest report from the ICIJ; every American should be outraged that the U.S. is now second only to the Cayman Islands for hiding dirty money for criminals.

It's unclear how surveillance of mom & pop CBDC payments could help when trillions of dollars of suspicious Bank activity can continue unabated.

That article is dated 2020, while I'm referring more to changes throughout the 20th century, the Bretton Woods era etc. The UK had formal capital controls until 1979, for example.

> the US government, despite its vast powers, fails to stop it.

Yes, and so long as it fails to stop it there will be pressure to "do something".

And establishing a threshold below which there is no surveillance is unstable, because immediately you have to face "structuring", and the digital space makes this worse. If there were to be truly free no-surveillance payments of $1, say, people would move a stolen billion as one billion payments of $1. This is already happening with gift cards: https://www.napier.ai/post/prepaid-cards

The truly big money laundering is incredibly difficult to stop, because it can fund its own bribery zone that can extend to entire countries.

> can all be drafted into the service of CBDC initiatives which require digital identity for digital currency wallets

This is why initiatives like Decentralised Identifiers are so important. There's simply no government or organisation on the planet responsible enough to wield that power. At least it provides an alternative to centralised behemoths.


This would integrate cleanly with a reputation economy, where folks who get "bad reviews" cannot do business.

Or folks who do business with "bad people" or spend their money on "bad things" find their transactions taxed more heavily.

I think we can all picture what the moralizing pro-social left and religious right incarnations of that look like.

This is supposed to be a commentary of the current state of affairs, yes? I mean we already have sin taxes.

You don’t really need absolute control of a currency to moralize above-board business.

It's currently in broad strokes, what's being enabled is micromanagement. You don't have enough calorie credits for that uber, better get hiking.[1] The global food council will also be prohibiting purchases of meat until your next birthday.

[1] https://www.youtube.com/watch?v=WSvb_ZTYS6A

But now in extra strength and without loopholes.

> sin taxes

Do we have taxes on gluttony? sloth? lust? anger? I never noticed.

What we have are taxes and other limitations on health-harming substances, like cigarettes, strong alcohol, and even on excessive sugar in certain places. This is not because the nicotine high, or inebriation, or feeling the sweetness are morally objectionable. This is because inhaled smoke, large quantities of alcohol, and large quantities of sugar lead to health problems, and treating these problems is expensive. It's more like a road tax, higher on heavy vehicles that damage roads faster.

>>This is because inhaled smoke, large quantities of alcohol, and large quantities of sugar lead to health problems, and treating these problems is expensive. It's more like a road tax, higher on heavy vehicles that damage roads faster.

This all assumes that the cost of medical expenses should be socialized.

The cost of medical expenses is socialized anyway

Exactly. The entire society had to shoulder the weight of the consequences of bad habits of some.

Were the costs not socialized, there'd be a bit less of a point to tax cigarettes so much: you want to get lung cancer and you are ready to pay for it, go ahead and smoke three packs a day! But this is not how it works today.

Not my point.

A phenomenon which affects a large fraction of a population has effects on the entirety of the population, ergo, it is socialized.

Every major category of goods/services has an effect on a large fraction of society. It doesn't follow that we should socialize the expense of every good/service that fits this criteria. It's absolutely not established that doing so, as a rule, does more good than harm, and we have plenty of empirical evidence that more free-market-based societies are more effective at developing themselves than more socialized ones.

the adult sector and the firearm sectors are already under pressure

Sin taxes are opposed by the argument that they disproportionately affect poor people. If they could target them based on your income bracket or something, they might get a lot more popular.

I think you're right but for the wrong reasons.

IME few people genuinely care about the poor beyond micromanaging them for their own good or getting them to be out of sight out of mind.

Sin taxes, generally speaking, are how the HN class incentivizes the landscaper class to behave more like them (to varying degrees and with various pretexts as needed per issue).

Currently they are mostly limited by the middle class's ability to exempt itself. Finer targeting will enable them to go hog wild.

bad people income tax +5%. raise slowly every year.

all normal sin taxes still apply.

China has already implemented this system. Why not head over and try it out?

Except you are too big to be hold accountable.

Yeah, good luck voting out your nation’s central bank. Even the politicians can’t.

Entire IMF video from that event is available at https://www.youtube.com/watch?v=mVmKN4DSu3g

Excellent, thanks for tracking that down.

Happy to help.

Not only that - a central digital currency could enact embedded transaction taxation automatically.

It's potentially a LOT of power centralized.

Central taxation at the transaction level could enable byzantine trade policy, e.g. new parties within supply chains claiming a right to tax.

> With cash, we don't know who is using the 100 dollar bill today

Some CBDCs like GNU Taler also have that property. Tokens are signed with blind signatures so the exchange doesn't know the identifier of the tokens you got, just how much of it gave you.

From https://en.wikipedia.org/wiki/GNU_Taler

> Stallman has described the program as "designed to be anonymous for the payer, but payees are always identified.

Taler is a pretty great system. It is anonymous for the payer, but doesn't facilitate money laundering because the receiver of the money can be identified. It's also fairly cheap to run. I hope it gets adopted as a digital currency.

Depends on the implementation details. If private keys are distributed only by central bank, then yes. But if they are created anonymously at the edges, with multiple private keys allowed per person, then they don’t necessarily know who controls what wallet.

Unsurprisingly, anonymity is not high on the list of CBDC policy objectives.

Transactional identity is valuable for social credit systems and kill-switch mechanisms.

One LF initiative: https://trustoverip.org/

In practice, we still require ID verification to participate in markets.

Some markets. All kinds of financial transactions are happening as we speak in various DeFi ecosystems on a permissionless basis - you don't need an account, just a wallet.

Before say "your wallet is your account", only sort of. You can have any number of wallets through any number of applications that support it, including rolling your own if you so chose. Certainly nothing like the KYC/AML required of, say, Robinhood.


Loans, derivatives, providing liquidity to AMMs, lots of other things going on.

Here's a list of the big ones on Ethereum:


We’re talking about the government here, it’s entirely reasonable to assume they’re going to start regulating this kind of thing by imposing rules on citizens.

How are they going to regulate defi?

The most likely thing is to add onerous reporting rules on US citizens since they can’t directly change any of these protocols. Or, declare that participating in DeFi without a license is illegal. Again, they can’t ban DeFi because it’s decentralized but they can certainly regulate you and I’s interaction with said systems.

Not really. And for those cases that do, we only require it with the merchant, not the central bank.

That's not true for most markets in the world.

Makes me wonder the total volume of anonymous trades compared to ID-verified trades.

A lot of art trades probably happen anonymously or atleast behind brokers who keep their client identities hidden.

I bet that the vast majority of leaf node food purchases on Earth are in cash.

There’s another name for a central bank digital currency. It’s called “a bank account at the central bank”. Hardly Orwellian, but hardly innovative either.

Traditional paper money is actually a zero interest bearer bond. Essentially a simple receipt for liabilities at the central bank that can be passed around like an endorsed cheque.

Since regulators have steadily been eliminating the abilities of cheques to act as promissory notes rather than bills of exchange for decades, it’s hardly surprising to see their next assault on the “bearer transfer process” of traditional paper money.

The whole point is to change it from a promissory note to a bill of exchange at the very least.

What would be Orwellian is the need for every citizen to have an account at the central bank to use the monetary system at all. Paper money leave much, much fainter trail of transactions than a centrally mandated and controlled digital currency. It's the pervasive tracking aspect the people find Orwellian.

A currency is a simple public monopoly. Therefore standard rules around monopolies apply.

If you don't like that, then don't use it - and stand the inconvenience.

> If you don't like that, then don't use it

In many places, not accepting legal tender is illegal

Not really. Legal tender doesn't generally work like that as a concept. It's largely to do with settling of debts - in that you cannot insist on being paid in cows from somebody who doesn't have any cows. The law will permit the debt to be settled in a defined fungible numeraire and will consider that to end the matter.

But where it does operate like that, that's another example of a public monopoly at work.

You can always contract under the laws of another jurisdiction if it bothers you that much.

As ever it is free as in freedom, not free as in beer. True freedom can be very inconvenient.

>You can always contract under the laws of another jurisdiction if it bothers you that much.

"don't like a given law in your jurisdiction (county/state/country)? Just move to another one!"

Contracting under different laws is just like contracting in a different currency. No moving required.

As Argentina found to its cost with dollar bonds issued under English law.

Meanwhile, with regards to feedback on a digital Euro:

> In the light of the views expressed by the citizens during the public consultation, the EDPB stresses that a very high standard of privacy and data protection is crucial to reinforce the trust of end users and shall be considered as a distinctive element in the offering of digital euro, representing a key factor of success of the project.

Footnote 9:

> A thresholded approach could be based on the monetary value of the transaction. For example, low value transaction of less than €1000 could enjoy full privacy as they are unlikely to entail AML high risks. Another possible limitation could cover use outside the Euro area.

* https://edpb.europa.eu/system/files/2021-07/edpb_letter_out_...

* https://news.ycombinator.com/item?id=27791789

There also was an earlier HN thread about a research group involved with defining specs for a digital Euro:


€1000 is an awfully low threshold.

That’s normal monthly wage in lots of places in Europe. And maybe half of average salary in Germany. So the limit is absolutely reasonable.

Yes, and if they choose not to update the value in 30 years then it would be the same as ~€330 due to inflation. Doesn't sound reasonable to me.

I think the idea is to set it high enough that not too many people will look, but low enough that after a few decades of inflation (or a few weeks of hyperinflation), it will cover most reasonable transactions, beyond buying a burger.

There's a lot of stuff we buy every now and then between €1,000 and €2,000 (TV, computers, whatever). Not every month but still not something for which we should be scrutinised. Something around €10,000 would be better.

It's a reasonable one I think. Importantly, I make very few (0.1%?) transactions above that limit, so if only all my transactions above that are recorded, it doesn't let anyone paint a picture of my movement, habits and so on.

Most of my transactions above that limit in the past years were recorded in (publicly available!) ledgers anyway: e.g. buying a car or house.

Whether the limit should be €1k or €5k could be debated and you could reach different conclusions in different countries depending on whether that's the cost of an average bicycle or an average home.

The problem with these limits that they are not changed.

When my father worked only a very tiny minority payed the maximum income tax rate (talking for Germany). Nowadays everybody in the upper middle income bracket does.

You could set the amount to a standardized inflation adjusted amount that just happens to be €1K today but would be automatically adjusted unless there is a political not to. Most every number that isn’t a percentage should be defined that way.

If a government wanted, they can use Zero knowledge proofs to provide every citizen with the ability to do say $100k/year in completely anonymous transactions with Monero-like technology.

There's not actually a lot of argumentation on that page concerning the disadvantages of central bank currencies other than fairly generic criticisms like

>"the compelling of economic agents (businesses and individuals) to consume particular goods and services preferred by policy makers;"

which as far as I can tell is already the case anyway through countless of policy tools, same goes for arguments about "cyber hacking" or regulation. It's also not actually a risk from an objective standpoint because that is very much an explicit goal of such a currency.

Also I'm not exactly sure how seriously I'm supposed to take someone who advertises himself as a 'professional economist', but as far as I can tell does not actually work as an economist, has a bachelors degree and no publication history and tries to sell me gold and silver from his dealership on the same page he writes this piece about central bank currency.

>Also I'm not exactly sure how seriously I'm supposed to take someone who advertises himself as a 'professional economist', but as far as I can tell does not actually work as an economist, has a bachelors degree and no publication history and tries to sell me gold and silver from his dealership on the same page he writes this piece about central bank currency.

Presumably an economist who runs a profitable business has demonstrated more economic understanding than the average academic economist, as academic economists don't face any feedback loop that penalises them for bad predictions. As Karl Popper said, a science is only a science when it makes falsifiable predictions that are proven correct.

>Presumably an economist who runs a profitable business has demonstrated more economic understanding than the average academic economist

No, he hasn't demonstrated any understanding of economics the same way a bird doesn't demonstrate understanding of physics just because it can fly. I think you've misunderstood Karl Popper if you took away from his work that selling gold on the internet makes you an economist or a scientist.

Someone could make ten million dollars running an MLM scheme but last time I checked that does not turn you into an authority on macroeconomics.

When I have studied economics, our professor went into long lengths in explanation what makes one an economist.

And the main thing is. To be economist, you have to act in discourse of economics. And discourse of economics is defined by economs.

You don't need any particular profession or education to be economist, just participation in the discourse makes you one. When you are paid to participate, you are professional.

A question is, whether you must participate in research. If yes, you could say that for example economics teacher is not an economist even when they have studied it, they understand it and they teach it. And you could ask the same for 'company economists', CFOs, accountants. They have studied it, they understand it and their main discourse's within of what economists study.

One more thing is. I have met lots of economics grads who had almost no understanding of economics. They learned for tests, then they forgot. A few years after graduation, they remember maybe 5-10%. And I have met lots of amateurs who study, read, think and discuss actively. They might not have a degree and their understanding of economics is superior to a huge percentage of econ grads.

There is a snag, one that Popper didn't understand either, but which makes this all the clearer: predictions are never proven correct in science. They are shown to be "not false within the bounds of statistical and measurement error". So one guy doing well at least shows he is "not wrong", but within arbitrarily large error margins, because he is just one guy and it might all be just a coincidence. Only if you repeat the experiment a sufficient number of times you will arrive at error margins that are not laughably huge.

So the feedback loop doesn't mean anything really, beyond weeding out huge mistakes (huge as in: same magnitude as the error bars). Because it is always just one guy, no numbers, no statistics.

To get back to Popper: Newton's gravity wasn't really proven wrong, it just had its error bars known and explained. Einstein's general relativity is more precise, therefore less wrong and can explain Newtons error bars. But Newton's gravity is still right enough for almost all purposes. So it isn't falsified in Popper's sense, it is refined.

To me, the biggest risk of CBDCs and other "smart" money ideas, is potentially mucking with the fungibility of our money. In the book Sapiens, one of the topics is that money is the greatest force unifying humanity, above empires and ideologies. Even the "enemy" North Korean Won has _some_ exchange rate against the US Dollar and other currencies of the world.

If CBDC transactions can be turned off at will or forbidden by region or whatnot, then it might just have no exchange rate, and break the unifying bond of money. I know that there are ways to freeze bank assets or swift transactions, but CBDCs seem much more powerful at this early stage.

I’m not disagreeing with you, but I’m wondering if there have been cases in the past where central banks have broken fungibility based on region or bank assets. The thing that immediately comes to mind are those “HAWAII” federal reserve notes in WWII which were meant to become worthless should Japan have invaded successfully. That never came to pass, but I’m wondering if that historical event is similar to the kind of thing you are talking about?

Exactly, I didn't know about that case but it seems like the rules were presented up front. I think it would only take a few alterations of the deal to panic a smart currency.... And maybe that's why governments won't actually mess with it.

You raise an interesting point. What is the real effect of black market transactions? Is there any positive economic effect? Is fungibility actually necessary, or is it just a quick fix to the problem of value discovery?

Quelle horreur - has Mr Adams not noticed that that vast majority of financial transactions are completely digital, with all the risks that he details? Not blockchain (thank god) but every card debit/credit/charge transaction is performed entirely without notes,coin, or gold and is recorded and tracked with similar detail to blockchain ledgers.

Sure, most transactions are digital already. This is about the removal of physical cash as an alternative, and the downsides that presents. Especially interesting is the sudden feasibility of negative interest rates enforced across the board, and the inability to just "keep cash" as an alternative.

> This is about the removal of physical cash as an alternative

No it's not.

Nowhere in the article does it suggest that, nor is it being contemplated in any serious current policy proposals.

It's about having digital cash transactions handled directly via government ledgers rather than via private intermediaries like MasterCard and Visa and PayPal. Which has all sorts of benefits. After all, money is a public good -- why should digital money be handled exclusively by private corporations making a profit off of it?

If government is in charge of printing the physical money people use directly, it's pretty logically consistent for it also to be in charge of digital ledgers in some form as well. We don't let MasterCard and Visa print up their own hundred dollar bills, after all.

Partly basing it on other discussions around it: https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-nega...

And yes, the article absolutely does mention it:

"CBDC Public Policy Rationale

Advocates of CBDCs suggest that they are necessary, certainly useful, in addressing multiple issues emerging across the global financial system of late. These issues include: ...

Zero-lower bound interest rates (i.e., negative interest rates) – the existence of physical cash results in the severe curtailment of the ability of central banks to lower official interest rates below the zero bound (i.e., implement negative nominal interest rates) given the risk that citizens are likely to withdraw from the financial system by hoarding physical cash if negative nominal interest rates are implemented[12]. "

If that's part of the rationale, what do you think is implied about the continuing existence of physical cash?

The article you're linking to explicitly talks about cash being preserved:

> The proposal is for a central bank to divide the monetary base into two separate local currencies—cash and electronic money (e-money). E-money would be issued only electronically and would pay the policy rate of interest, and cash would have an exchange rate—the conversion rate—against e-money. This conversion rate is key to the proposal.

So considering they're going to all the trouble of defining an exchange rate, what I think is implied about the continuing existence of physical cash is... that it will continue to exist.

The goal here is very explicitly about making negative interest rates workable, not eliminating cash.

You’re right, the article I linked to is more about how to eliminate a pesky attribute of physical cash, not the physical manifestation itself (which I’m frankly less concerned with). My initial comment was mostly meant to be about the removal of physical cash as an alternative to something with a negative nominal yield, which a dual currency does accomplish, it would no longer be an alternative. But separately, I do think the eventual intention is to also get rid of the physical manifestation entirely, with a dual currency as a way to ease toward that.

In case you hadn't seen it, Australia tried to ban the use of cash payments for higher value transactions. It didn't end up passing but it is expected to be revived in future.


Silly Australians, you just have to make cash socially unacceptable.

Make cashless attractive for key businesses (rent, utilities, groceries, the popular things), make cards attractive for consumers and soon enough those paying in cash are automatically assumed to be drug dealers or worse.

Then reduce the number of available banknotes, reduce the maximum denomination and implement whatever tracking you want.

Just don't do it too soon like Germany or people will cling on to their cash. Not that it helps them much.

The long game is similar. Canada withdrew the 10k, then late 1k and 500 dollar notes.

Now the $100, is worth what a $20 was, 35 years ago.

Eventually it will be worth $5.

With inflation, and time (the long game), all you have to do is wait.

You'll need a duffel bag of hard currency, just to buy groceries.

>We don't let MasterCard and Visa print up their own hundred dollar bills, after all.

Some financial institutions may engage in fractional reserve lending, and if an entity can "securitize" or otherwise creatively determine the value of any assets or liabilities, then effectively they are allowed to create their own money.

In terms of privacy, it IS possible. Look at Monero; but there it would be very very hard to get the government to accept a plan that included that level of privacy. I suppose that one may still have anonymous wallets, which could ensure a certain amount of anonymity absent requirements to the contrary. This whole phenomenon has the eerie likeness of Revelations, buying selling without a number, etc. Let's not intentionally make it come true guys.

This is a pretty good summary, but I do question what the Fed has to gain from a US digital currency. All of the “rationale” provided here boil down to “so the central banking system doesn’t ‘lose relevance.’” This argument doesn’t make sense to me at all. The Fed controls the supply and policy of money, so perhaps an instant digital currency would help them to implement their policies but is that really a concern of the Fed? This makes it seem like the Fed is worried about Venmo affecting the economy which I doubt it is. Given that the consequences of a shoddy or imperfect implementation would be catastrophic, it seems like something that would take decades of gradual movement.

>This makes it seem like the Fed is worried about Venmo affecting the economy which I doubt it is.

Your doubts are correct. They are not. They are worried about cryptocurrencies.

>They are worried about cryptocurrencies.

More fundamentally, they are worried about maintaining their status-quo power.

Agreed. Seems like it's a big reason why Gensler was appointed Chairman of SEC.

Looking at the positive benefits, it certainly allows mass distribution of relief funds to citizens much quickly than possible, essentially two-way transactions between government and citizens. In the future, can subsidies (e.g. medical, homeowner) be directly credited to CBDC accounts? Maybe.

In a pandemic like situation, it facilitates mass distribution of relief funds to approved citizens.

On the flip side, in a pandemic like situation, cash allows better off citizens to support their non-citizen friends fnancially from starving, while CBDC prevents citizens from doing that if the government chooses to control how the currency is used using technical mechanisms unique to CBDC.

Judging by the various voter disenfranchisement programs being pushed for, I would expect that dividing line between the eligible and the prevented to be somewhere between one group of citizens and another in some states, too.

I am not convinced governments should ever be trusted with deep and detailed control over what people do with personal levels of money, because we are a still a long way from the ideal of treating all people as created equal.

Negative rates become more practical with CBDC.

There upside for the powers at be is:

1. that all transactions are no longer left to the honesty of the tax filer to be taxable. There will be a paper trail for the authorities.


If vaults are holding wads of paper are gathering dust while everyone is using some others currency else's currency (like the eCNY) over the internet as the global reserve currency, that's a pretty convincing case about the potential for a loss of relevance.

Thing is, nobody outside China wants ecny. It’s a toxic asset, I think Xi greatly over estimates the value of his shitcoin.

If you don't have the right to determine how you will use your money, as you see fit, it's not your money anymore.

Governments can just piggyback on your work as much as they want. The productive portion of the people can be enslaved for the benefit of the political and the managerial class, with some alms to the poor so they will vote for the right candidates.

Yep. It's rent-a-dollar. Even today's physical dollars are only rented. If the FED doubles the money supply overnight, they've essentially taken some of your wealth. But the difference is, with a digital currency, they can be selective and targeted.

It's difficult for me to see this as anything other than a net negative.

These visions for the future are putting a serious strain on my mental health. The average person doesn't care. Not even the more educated. Perhaps I'm the coward, afraid of change. But I really don't see how this much control by those in power can benefit anyone other than themselves.

I think any kind of CBDC is dead on arrival in the US, for one simple reason: Turbo Tax.

The federal government has all of the information to do everyone's taxes every year, mail you a postcard with the result, and offer you the chance to file an amendment if you disagree. This would make everything much simpler for everyone, and would solve a number of enforcement problems, too. It's a no-brainer.

But Turbo Tax has paid enough money to enough politicians to prevent it from happening, because Turbo Tax makes billions of dollars from the old and broken system.

If the Fed started moving toward a CBDC, and encroaching on the territory now occupied by banks, credit cards, and other entities, the skies would turn black from all of the jets flying lobbyists into Washington to kill that proposal dead.

The Federal Reserve is more powerful than congress. Heck, just saying that makes me sound like a conspiracy nut. But the Fed is supposed to act independently and not be beholden to Congress’ whims.

> The Federal Reserve is more powerful than congress.

Congress can eliminate the Fed or any and all of its powers at a whim, the reverse is not true. Ipso facto, Congress is more powerful.

The Fed and the myth of its power are a convenient responsibility dodge for Congress, though.

Congress could have ended the Iraq War, the Afghan War, reined in domestic spying, broken up the banks, passed serious financial and bankruptcy reforms after the '08 crisis or even repealed the ACA. They did exactly none of these things. Why is that, since they have so much power?

Congress has power theoretically, on paper. So does the Monarch in the UK or the National People's Congress or, historically, the Supreme Soviet. But Congress these days rarely exercises real power. Congress is mostly a rubber stamp with some third-rate acting and drama.

The Fed has real power. They started paying interest on reserves in the wake of the financial crisis, and seemed to have no explicit authority to do so. They also started buying much riskier assets than they had before, and also seemed to just so it. They did the various iterations of QE with no real guidance or oversight.

And the Fed controls the money, the lifeblood of any organization. Without the money, Congress does nothing, the president does nothing. That's a lot of power that is frankly unmatched in the US government.

> Congress could have ended the Iraq War, the Afghan War, reined in domestic spying, broken up the banks, passed serious financial and bankruptcy reforms after the '08 crisis or even repealed the ACA. They did exactly none of these things. Why is that, since they have so much power?

Because a majority of Congress (or the supermajority necessary to override a Presidential veto, in the cases where the President was opposed) didn't want to.

On the other hand, they authorized the Afghan War, and the Iraq War, and prevented the President from abandoning the detention facilities at Guatanamo Bay, etc., etc., etc.

Them choosing to exercise powers in ways you don't like, and not choosing to exercise it in ways you do like, doesn't mean they don't have power, it means they have different priorities than you do.

> And the Fed controls the money

No, Congress controls the money. They choose to allow the Fed to exercise some part of that power on their behalf, because their is perceived to be political value in doing so, but the power is entirely Congress’s.

The US CBDC digital currency proposal is expected later this month from MIT and Boston Fed, including open-source reference code, https://dci.mit.edu/building-a-hypothetical-cbdc


The whole speech is worth the read, the synopsis is:

"To conclude, I emphasize three points. First, the U.S. dollar payment system is very good, and it is getting better. Second, the potential benefits of a Federal Reserve CBDC are unclear. Third, developing a CBDC could, I believe, pose considerable risks.

So, our work is cut out for us as we proceed to rigorously evaluate the case for developing a Federal Reserve CBDC. Even if other central banks issue successful CBDCs, we cannot assume that the Federal Reserve should issue a CBDC. The process that Chair Powell recently announced is a genuinely open process without a foregone conclusion, although obviously I think the bar to establishing a U.S. CBDC is a high one. The upcoming discussion paper that constitutes the first step in this process will importantly ask for input from the public. I look forward to reviewing public input on the discussion paper, which will inform the Federal Reserve's ultimate evaluation of a potential CBDC."

Parachute Pants and Central Bank Money, Vice Chair for Supervision Randal K. Quarles at the 113th Annual Utah Bankers Association Convention, Sun Valley, Idaho

This isn't a proposal for a US CBDC. It's research on technical tradeoffs that might need to be addressed in a hypothetical CBDC.

Thanks for the response and clarification. What's the best way to discover papers on hypothetical US CBDCs? I've seen one international paper and one on US FedAccounts.

08 June 2021, "Central bank digital currency: the quest for minimally invasive technology", https://www.bis.org/publ/work948.htm

> Almost 50 central banks have already launched designs for central bank digital currencies (CBDCs) or prototypes ... The paper discusses ... what they imply for the financial system and the central bank of the future. It sets out the requirements for a “minimally invasive” CBDC design ... digital banknotes that run on “intermediated” or “hybrid” CBDC architectures show promise. Supported with technology to facilitate record-keeping by private sector entities of direct claims on the central bank, their economic design should emphasise the use of the CBDC as medium of exchange.

28 Jan 2021, "FedAccounts: Digital Dollars", https://www.gwlr.org/fedaccounts-digital-dollars/

> Congress should authorize the Federal Reserve to give everyone—individuals, businesses, and institutions—the option to maintain accounts at the central bank. We call these accounts FedAccounts. Unlike the CBDC approaches currently under discussion, which would use complicated and inefficient distributed ledger technology and be walled off from the existing system of money and payments, FedAccounts would be seamlessly interoperable with the mainstream payment system, relying on technologies that the Federal Reserve has used for decades.

It is critical to pay for everything with cash, otherwise we will find ourselves without the freedom to pay anonymously.

Hopefully Monero will change that one day.

If Monero gets completely cut off from any means of fiat conversion, then what? How do you do price discovery?

How do people do price discovery in USD? Why do things cost what they do? Because people price things in it. At some point people will need to start accepting it for goods and services in order to make it real. Ideally there'd be no need to use fiat at all.

Most fundamentally, the USD is backed by the price of oil. The price of everything else is somehow derived from this. The USA's military will probably destroy any country that attempts to sell oil for any other currency. Can you imagine what would happen if someone sells barrels for XMR? The USD would be obsolete in no time.

Part of the dominance of fiat is the effect of lending and investment markets on business cash flows. Reported earnings are a tax liability for an individual, but they are an asset to a business, which increases the value of their equity and increase their debt ceiling. In an inflationary monetary system, the most important thing is asset leverage, so privacy is a bad thing. It's a funny thing actually. The SEC deals mainly with corporate over-reporting and IRS with individual under-reporting.

There is a "Gresham's Law" kind of question here, whether 'better' is actually better.

You can always conduct private payments anoynmously via physical exchange of goods.

Whether gold, Tide bottles (not joking), packs of cigarettes, Amazon gift cards, whatever it is you want to effectively launder.

There are tons of alternatives to cash.

Often it ends up being food, sex, and sometimes housing.

Just saying: it's not a good situation.


That is a... bizarre take on things.

We don't live in a Mad Max dystopia or at the edge of nation-wide starvation. The things I mentioned are normal commodities. No idea why you feel the need to bring prostitution or odd choices like food (which spoils) into it?

You're being downvoted but this is already happening at a large scale in rural America in places like Kentucky, where food stamps are used to buy cases of Pepsi to use in an informal barter economy.

People will inevitably circumvent the system if it becomes overregulated. It is still one step closer to Orwellian control for the majority of the population.

I remember one time on sixth street. It's midnight. Frazzled lady asking if I'll trade food stamps for a couple of slices of pizza.

You forgot alcohol. There's a constant demand and therefore it's quite acceptable as means of payment.

How do you pay bills in cash though?

Money orders.

Or to the guy you're subletting from.

The big reason the crypto industry is so big is because:

1) They are inventing crypto for a NO-MONEY-PRINTING currency. This article "forgot" to call out how this is the massive few making the crypto industry huge.

2) "bail ins", negative interest rates are the system STEALING from citizens. Governments could never pull this off from the wealthy or corporations. But they feel entitled to be able to do this to the masses. They don't understand how this won't be tolerated by citizens.

3) Crypto paying ~3% interest will be able to be made sustainable. This is DeFi interest when the deposits can be lent out, with risk nearly fully counterbalanced.

Central banks have no clue how the above three are all that is needed to drive citizens to crypto and minimize their USD/CBDC holdings. The amount of crypto supporters shows that #1, #2 and #3 are getting market adoption today.

To your point about negative interest rates - these have been a real thing for years depending on where you are, but this can be overlooked because banks have generally avoided passing them to everyday users - however if you are a corporate or high net worth client in Europe these are absolutely a thing, eg Credit Suisse charges up to 0.75% on high CHF balances, but pays interest on smaller deposits.

All of this is intuitive at first sight. The only question that matters is what powers do central banks have to fight cryptocurrencies? Because they are extremely powerful institutions, and they will fight to the death using every tool they have.

At th core I believe this is a new variation of the same problem we have always had -- we need a system for cooperation that is powerful in some ways and yet not restrictive.

I don't think humans have ever had a good solution to that problem. I think technologies like cryptocurrency provide advantages in achieving that. But factions operating in different paradigms (private vs public) are not able to see the benefits or necessities of the other one. And so it's fundamentally a lack of ideological information integration and missing technical solutions.

Humans may not be smart enough to create a good solution to this problem.

The thrust of the article is that right now private banks effectively manage most of currency circulation and that a digital US dollar would make the Fed a giant 'MegaBank' that managed most of the currency directly in a way, giving them immense control.

Side note: the 'transaction problem' that we have in payment settlements today has nothing to do with the type of currency, it's really just about legacy banks, standards and monopolies. If we wanted a complete transaction to be 50ms it could be that.

Same thing for the 'unbanked' - there's nothing stopping us from having everyone 'banked' right now using the current system. SwissPost I believe is a bank, the USPS could provide basic digital banking as well if you really wanted.

Also understand that most of the financial system is credit, not cash, so there's that.

I think the Orwellian issue is real, as well as the issue with a central government entity getting into such granular problems. I just don't believe they should or can do it.

The banks, which literally own the Fed(s) (they each have set share ownership) ... will also have something to say about it.

It's such a gargantuan change I wonder if it could even ever really happen? How would it roll out? Rhode Island first?

By the time it hits main street I wonder if we'll notice a difference.

What happened to the comment about banks being the most powerful entities on the planet?

"Give me control of a nation's money and I care not who makes it's laws." — attributed to Mayer Rothschild

"Who needs dollars when you can have Libra?" — Mark Zuckerberg

>"Give me control of a nation's money and I care not who makes it's laws."


Distribute control of a nation's money, and distribute power more fairly & competitively.

How so? What do you mean by 'control'?

Distribute control ~= distribute decision making around money, primarily via competition & choice of implementations.

Militaries are the most powerful entities on the planet. A man holding a bag of cash vs. a man holding a gun. The man holding the gun always wins.

Reminds me of Varys' Riddle:

> In a room sit three great men, a king, a priest, and a rich man with his gold. Between them stands a sellsword, a little man of common birth and no great mind. Each of the great ones bids him slay the other two. ‘Do it,’ says the king, ‘for I am your lawful ruler.’ ‘Do it,’ says the priest, ‘for I command you in the names of the gods.’ ‘Do it,’ says the rich man, ‘and all this gold shall be yours.’ So tell me—who lives and who dies?

> "The king, the priest, the rich man — who lives and who dies? Who will the swordsman obey? It's a riddle without an answer, or rather, too many answers. All depends on the man with the sword.

> "And yet he is no one," Varys said. "He has neither crown nor gold nor favor of the gods, only a piece of pointed steel."

> "That piece of steel is the power of life and death."

> "Just so … yet if it is the swordsmen who rule us in truth, why do we pretend our kings hold the power? Why should a strong man with a sword ever obey a child king like Joffrey, or a wine-sodden oaf like his father?"

> "Because these child kings and drunken oafs can call other strong men, with other swords."

> "Then these other swordsmen have the true power. Or do they? Whence came their swords? Why do they obey?" Varys smiled.

- A Clash of Kings - Tyrion II

History is full of examples like this. Rich man is killed first, without consequence. Then probably the king. The guards have no loyalty once the King is dead, but the swordsman will never escape the religion.

Game of Thrones is a fiction. And a fairly ahistorical one. This military historian's blog has several texts regarding its flaws. I can recommend reading them, they are well written.


There is a reason why we distinguish between force and power. People generally perform better in societies where they aren't constantly threatened into obedience.

GRRM's world is a lot more cynical and obsessed with raw force than our own historical record.

> People generally perform better in societies where they aren't constantly threatened into obedience.

These should be the first words out of any teacher's mouth in any course in history or civics. It would clear up a lot of confusion built into the vague notions of 'progress'.

In fact, the military (and the police) is what actually enforces national currency in the utmost top level.

Look what happens if you don’t pay your taxes (which is a way to enforce usage of a currency), you’ll be arrested and will go to jail.

And if you think about how the US dollar remained a global reserve currency through the petrodollar (explicitly backed by the US military protecting Saudi Arabia’s oil fields in return to its oil be exclusively sold with dollars), then it’s apparent that guns are what makes the money go round.

Most people will drop their guns if paid enough.

Why would they drop their guns, when they can simply tell whoever is paying them to hand over their money?

Because the person with the money can buy even bigger guns, and pay someone to show Mr. Smallguns they mean business.

This is excessively simplistic. An accurate model will be able to predict why most governments aren’t military juntas.

All governments are reliant on their military/police to maintain power. Juntas are just particularly overt about it.

The military needs to pay the troops somehow.

Yeah, reminds me of this: https://www.youtube.com/watch?v=noQsHiTJAXo

Money is the substrate of virtually all of society beyond a handful of your peers. If you utterly destroyed it, society would collapse.

Just shoot the guy holding the bag of cash, (or just threaten to) and now you have cash to pay the troops.

I mean you eventually run out of people to shoot to take bags from if you can't reasonably create more of the currency through economic activity and war is prohibitively expensive. It's also not likely the persons holding the bags that can already pay for their own troops wouldn't do so.

In fact, Roman gold currency was invented primarily to pay the troops. As a result gold as a currency only circulated around regions where the military was fighting, and in peaceful areas far from warfare the usual methods of debts and IOUs were used to pay for things.

If you’re still curious, read Graeber’s “Debt: The First 5000 years” which delves into the Roman monetary system in detail.

The winner is the man who paid for the gun.

Who were Napoleon's financiers? Hitler's? UK during WW2?

It's generally the case that the politicians control the Armies during peacetime, but historically, money is the big limiting factor so banks have incredible power.

Founder of a CBDC startup here. We do fully offline smartcard-based CBDC wallets and offline payment protocols, similar to what Mondex was doing in the 90s. This article is very well written, the potential risks stated are mostly true. Our product effectively mitigates most of the downsides and risks since it works completely offline. Its essentially like a credit card that doesn't need external networks such as internet or GSM to operate, its fully peer-to-peer (in this case card to card). If you want to cash out the funds on the card you can just go to the Central Bank (CB) or some Authorized Financial Institution (AFI) and tell them you want to get your money out. The cash control policies are literally the same as cash, there are some upper limits on what amounts you can pay without reporting, and how much you can hold per card. Also the cards are issued with KYC/AML procedures.

CBDCs are a double-edged sword, they can be used by tyrannical governments to enforce surveillance and bigger control, or they can be used by Central Banks to enter the retail digital currency space (which can make digital transactions cheaper, more accessible, and can also make the difference between Retail Bank and Central Bank interest rates lower. To some extent Central Banks also feel threatened by Bitcoin and other decentralized digital currencies). I have no doubt countries will abuse this if implemented, but I also have no doubt that countries with protected liberties will make sure it doesn't cross into surveillance thats outside of the current standard...

Also, its actually much worse with credit card payments. Even Bitcoin is traced significantly (there are multi-billion dollar companies that solely work with governments and financial institutions to trace cryptocurrencies). Also cash is not as anonymous as one might think. Bigger sums are always traced and recorded with the serial numbers on the banknotes, and theres always upper limits of 2K-10K eur of how much you can pay with cash without reporting.

> Also cash is not as anonymous as one might think. Bigger sums are always traced and recorded with the serial numbers on the banknotes, and theres always upper limits of 2K-10K eur of how much you can pay with cash without reporting.

When cash is dispensed from an ATM, even at small sums, are the serial numbers associated with the account it was deducted from? Seems possible from a technical perspective.

I dont know, it seems possible though and I see no reason why they wouldnt do it

A thought experiment. Think back to what life was like 100 years ago, 1000 years ago, back through 10,000 years, then mentally draw a graph with two axis.

On one axis put (potential) individual liberty and anonymity. On the other put health and safety and access to material comfort. I suspect there is an inverse correlation to some degree. 10,000 years ago you could do whatever you wanted, up to and including murder and as long as you were fast enough to escape those seeking revenge you were good. Even 100 years ago you could change your name, move to a different country and start your snake oil business (or whatever) fresh and it would take a long time for justice to catch up. Life was not highly controlled like it is now. There was always a place to flee, always the opportunity to escape. Most people farmed and eked out a living and their hours and activities were dictated by little but the seasons. Not now. You will be at your desk and 9:00 and go home at 5:00 and eat lunch for 1 hour at noon. There are million little rules for everything. We spend all our time following them (or not, but the consequences are more consistent and there is no place left to run).

We accept this trade-off because it enables us to live longer healthier lives with more material comforts. I'd venture a primitive person from 10,000 years ago would scratch their head and wonder why any rational person would do this. Smart phones are a more recent example. Who in their right mind would carry a tracking, listening spying device? Well, anyone who wants instant access to information and a guide to the other side of town, obviously.

Point is this. We give up what we consider liberty for efficiency and this has been going on for thousands of years. These currencies yes will track, yes maybe can only be used for certain things, yes allow a high degree of control. But what if they make the flow of goods and services more efficient? What if they help eliminate ruinous market cycles and depressions and poverty? What if they completely neuter corruption and large scale organized crime? Do we accept them then? Probably we do.

Just to be clear I don't like the idea either. But probably efficiency wins irrespective of my personal biases and life is on the whole "better" for some definition of the word.

I am not sure that is true. As far as I understand, the communities in most places were small, everyone knew everyone, and people were vary of strangers. You couldn't come to a random village and start farming... and as far as I can tell from family stories, in villages there is basically zero privacy. You need a city with enough people to get some anonymity and liberty of the kind you describe.

I don't think there's causation even when there's correlation. But your comment has led me to a thought.

Yes, it's true animal in cages live longer than animal in the wild.

Would I prefer to live in the ZOO or in the wild?

Great depiction here.

Economic ideologies undergo natural selection too. If one population is operating under principles that lead to more efficiency and thus greater production then it will dominate groups operating under less productive ideologies (e.g. the Cold War).

A zoomed out perspective like this is quite helpful.

One issue that seems to be missing from the article is discussion of the ability to monitor transactions in other countries using a CBDC. If like dollars the cryptocurrency is used outside a countries borders, then an in-built traceability in the cryptocurrency compromises everyone who uses it, regardless of borders. This would be a good reason to fear a cryptocurrency from China and a good reason for the USA to have their own. It could also become a strong barrier to adoption if countries outlaw other countries CBDC's to protect their citizens privacy making trade payments via CBDC's impossible.

> and does not possess any underlying intrinsic value

And I'm out. Gold has no intrinsic value. Nothing in the world has intrinsic value. The closest you get is maybe food. Gold gets its value from the same place paper money gets its value, belief. People believe that when they take it in exchange for something, they will be able to exchange it for something later. Period. End of story. Fin.

No matter how much you hate cryptocurrencies, I don't know how you can't think about CBDC and realise there is a need for Monero. Cash can be even more restricted and phased out, so people will need anonymous digital transactions. It is incredible that so few people see this

Monero can't be used effectively because you have to trade out of it as soon as you receive it, due to volatility. If the monero guys kicked out the idiot gamblers in their community and switched it to a stable-coin it would be the killer crypto . The question is how you peg something to the USD without a centralized party that can lock your funds.

>The question is how you peg something to the USD without a centralized party that can lock your funds.

It is impossible, it has nothing to do with "gamblers". Speculators are actually what keeps the price more stable by providing liquidity

Many special interests fund shills to write articles on their behalf. Oil companies do this to undermine climate change research and to halt nuclear reactors.

Could this article be written by a commercial bank PR guy or a private digital coin fanatic?

I wonder how government spending would go with a public/viewable chain.

Oh it would use the other, non public chain.

Isn't government spending with few exceptions public?

Complaining irrelevantly about "mandatory vaccinations" in your opening paragraph is a good way to get readers to assume you're an idiot.

Honestly, I really couldn’t take him seriously after that paragraph.

Central limitless money printing is putting almost everyone into debt.

Combine it with a "Social Credit System" [1] and some Black Mirror episodes don't seem that far fetched all of a sudden.

1: https://en.wikipedia.org/wiki/Social_Credit_System

At least one significantly more far-fetched Black Mirror episode has come to life, so I think that adjustment of expectations has already occurred.

Well to be fair what was happening to Britney in large part preceded the writing of the episode (and IRL there was way less tech involved), so it's uncertain if the black mirror episode took inspiration from real life.

I was talking about the pig episode.

Come again? I haven't heard of a leader blackmailed into doing something by dark net agents... Did I miss something?

Guessing he is referring to this: https://news.yahoo.com/british-prime-minister-reveals-put-00...

There was a “no comment” denial evidently, for whatever that is worth. Also, hi Isaac.

Wait what?

A couple of years ago there were allegations that David Cameron had performed sexual acts on a pig as part of a hazing ritual in his school days. There was no compelling evidence, but on account of it being extremely funny (and relatively inconsequential) everyone more or less accepted it as fact.

So 1) no tech involved 2) no blackmail involved, 3) no prime minister (at the time of the event in question) involved.

They expressed the desire to put everything behind a digital id lock, from social media, travel to food:

- https://assets.weforum.org/editor/responsive_large_webp_Fh3F...

- https://www.weforum.org/agenda/2021/01/davos-agenda-digital-...

“Vaccine passports” would be used to open the door for this system.

The current administration in the U.S. was / is considering a tax per mile driven --


The same administration (and media) is suggesting making life as hard as possible to not inject yourself with an experimental drug (which never even completed animal testing).

> CNN medical contributor Leana Wen says that life needs to be "hard" for unvaccinated Americans, with "twice weekly testings."


> “Now we need to go to community-by-community, neighborhood-by-neighborhood, and oftentimes, door-to-door — literally knocking on doors — to get help to the remaining people" who need to be vaccinated, Biden said Tuesday.


Now, imagine -- they can turn off our finances if you don't comply with exactly what's being suggested. You cannot travel, you must inject yourself with w.e. they want, etc. etc. You must NOT have an abortion if you have X characteristics and you Must have an abortion if you aren't married, etc. Crazy stuff can happen.

In LA they were already shutting off people's water which didn't comply with state orders on the number of people in a home:


I cannot imagine what would happen to all those people if they attended the party that wasn't state sanctioned. This is super dangerous territory. It's why everyone should be opposed to cryptocurrencies that are centrally controlled and not anonymous.

Even Bitcoin has much of the same issues, imagine if the U.S. gov blacklisted your wallet and anyone doing business with a given address would be arrested... the end results would be the same.

You actually do not need go far to answer most of the questions you are thinking through.

Australia (and to lesser degree Sweden ) are considered to be forerunners, the test-environments for the policies advocated by EU, Left politicians, and global tycoons.

>"... Within days of the COVID-19 outbreak in Australia, most shops began eschewing cash, with a preference for cards. And here’s the thing – most of us quickly complied. Recently, banking experts have said that over the 12 weeks or so that the pandemic was at a crisis point across the nation, the digital banking revolution sped up rapidly, by about five years. ..." [1]

Anonymity brings a way to evade authorities. If authorities are 'bad', anonymity is 'good'.

If authorities are 'good', anonymity is 'bad'.

So for the part of the population that believes in individual rights and ability of an individual to decide what to put into their bodies, how to defense themselves/etc -- the authority is bad.

For the part of the population that trusts pundits, government intelligence agencies, government's health organizations -- the authority is good, therefore anonymity is bad.

Perhaps these two opposite mindsets can not live peacefully in one country forever.

So periodically, they get into a fight, and decides who will claim the victory. The victorious then, will try to erase part of the history that makes them look bad.

And then, the whole cycle will start again. It takes about 5-8 generations. So around 200-300 years years.

It is panful to watch, unnecessary and really bad for humanity -- but it seems like we are not destined to get out of that cycle

There are solution to it, I believe. But neither in western countries, nor globally -- we are going, in the directions of those solutions...

[1] https://www.thebigsmoke.com.au/2020/07/13/the-dark-side-of-a...

> If authorities are 'good', anonymity is 'bad'.

> So for the part of the population that believes in individual rights and ability of an individual to decide what to put into their bodies, how to defense themselves/etc -- the authority is bad.

> For the part of the population that trusts pundits, government intelligence agencies, government's health organizations -- the authority is good, therefore anonymity is bad.

Most things are pretty grey - not black & white. So there's not a clear good/bad side. Which is the reason people want personal freedoms and you could want anonymity regardless of how "good" you think your government is.

>"... Most things are pretty grey - not black & white. So there's not a clear good/bad side. Which is the reason people want personal freedoms and you could want anonymity regardless of how "good" you think your government is. .."

I agree with you.

1) complexity of science grows every year. It takes a life-time to become infection disease specialist, immunologist, financial guru, constitutional lawyer, environmental scientist.

2) sophistication of deceit also grows with time, if nothing is done (because the reward for the successful deceit grows with time).

3) myself, there is no way I can make my own decisions about complex things. I need pundits, that I can *trust*.

4) but with the growing sophistication of deceit -- how can figure out who to trust?

That's where the division between the two mind sets shows up. Because what's relatively stable throughout the time -- are human character traits...

That division, in turn, later on creates the conflicts every so often -- as I mentioned.

> 3) myself, there is no way I can make my own decisions about complex things. I need pundits, that I can trust.

> 4) but with the growing sophistication of deceit -- how can figure out

I agree with you, but it seems like you're again thinking that everything can be known / black and white. The experts disagree on some very important things quite often. So it's not only who to trust - but is that trustable person even correct in their analysis?

This is where personal choice and freedoms and democracy shine.

I think I am driving towards 2 keys:

a) people that do live in a structured society, have to trust somebody. Because one cannot be an expert in everything.

In the sea of deceit, figuring out the 'right pundits, rights representatives' to trust is very very difficult.

Certainly, once a person figures out the 'members-to-trust', then dealing with discrepancies, mistakes, and differences of opinion within that circle -- is somewhat a different matter.

Those differences, in my view, will not result in ideological separation that I am mentioning in my original comment. The error delta is always built in in how we deal with 'honest mistakes'.

b) With regards to: >"... but it seems like you're again thinking that everything can be known / black and white .."

As I mentioned above, I do not particularly think that I was creating a false dichotomy. If I did, I am sorry, I hope my explanation above made sense.

But I do want to reveal something:

following through to a yes/no state, a binary end -- is something that I tend to think as a 'feature' of my thinking process :-).

I tend to see that my thought 'resolves' into a 'black/white' (binary) end state. While many steps to that might be very much 'gray' (non-binary).

As a personal guide, when I engage in this type of thinking -- I make it an 'axiom', that 'gray areas', eventually have to collapse into binary choices.

This 'eventual-binarity', in my view, is caused by simply the fact that we either alive or we are not alive.


We either have a partner to create a family with or we do not.


We either have biological progeny, or we do not.. and so on.

So that binary eventuality is built into basics of our existence.

Therefore when thinking about future state, I want it to represent those results.

To reiterate, certainly, there are many 'gray areas' in the steps to that finality of a cycle.

Wars (civil wars) might have many many reason, and they start as 'grey' reasons -- but at the end the brutality of those events revolve around very binary actions.

In my initial comment I suggested that there is a cycle that ends and starts with some sort of serious struggle and tragedy -- between representatives/followers of the 2 mind sets.

The binary choice there -- is that our society gets into that cycle or not.

I have not mentioned what may be ways for us to get out of the cycle, so I hope I did not leave the impression that those can be easily assumed from my comments.

> Perhaps these two opposite mindsets can not live peacefully in one country forever.

Um, those two mindsets are not a genetic or ethnic heritage; they are personal preferences and temperamental differences that might well distinguish me from other members of my own family. Are you suggesting that if I have a different mindset from my son, one of us would have to emigrate?

Perhaps not.

WRT, > ".. Um, those two mindsets are not a genetic or ethnic heritage; ..."

Yes, agreed. I do not know if these behaviors are completely 'learned via indoctrination', 'learned via experience', 'enabled by particular character traits' -- or a combination of all those.

Also, even genetic traits can skip generations...

WRT, >"... Are you suggesting that if I have a different mindset from my son, one of us would have to emigrate?..."

Certainly not, I am not suggesting that. I did not even mention a potential solution. One you are suggesting, has not been on my mind at all..

WRT your particular question (parent/son) differences and how dramatic they might be in regards to the 2 mindsets I mentioned above... History tells us -- they can be very very dramatic.

Exhibit [1]:

>"... In the official narrative Pavlik openly challenged his father and grandfather who hid their wheat from the state at a time when control over the wheat supply was crucial for Soviet Russia. The boy testified in court and filed a complaint against his father. The latter was found guilty on corruption charges and sent to prison. In an act of vengeance, the kulaks from his own family and their sympathizers decided to


Exhibit [2]: >"... Son tips off FBI about father attending Capitol riot ..."

[1] https://www.rbth.com/history/329601-demon-or-hero-morozov

[2] https://edition.cnn.com/videos/us/2021/01/23/teen-jackson-re...

And for some people, both authority and anonymity are tools. Neither is an unqualified good in itself, both have places where they should be affirmed and places where they should be limited.

I definitely agree with this. IMO that's how the democrats and republicans are also realigning themselves in the US.

Although, I'd argue this cycles every 4 generations (see WWII, civil war, revolution, etc -- they're all fights against a autocracy vs populace), https://en.wikipedia.org/wiki/Strauss%E2%80%93Howe_generatio...

> The current administration in the U.S. was / is considering a tax per mile driven

That's one solution to the problem of carbon/petrol taxes not being viable when cars run on batteries, but still use roads. You either maintain roads usning other tax revenue (meaning non-drivers are subsidizing drivers and there is no incentive to limit road use) or you find another way to fund road maintenance. This isn't exactly an authoritarian surprise nightmare, it's expected and natural.

> [Antivax rambling]

I'll just ignore that part

>Even Bitcoin has much of the same issues, imagine if the U.S. gov blacklisted your wallet and anyone doing business with a given address would be arrested... the end results would be the same.

This is a widely held view, yet deeply misguided. A bitcoin is a bitcoin. A single account to account transfer means a disconnect & plausible deniability for the recipient.

This claim does not hold up legally.

Just as you earn & are free to use USD that was illegally used at one point.

You can't freely use money that is, on the preponderance of evidence, proceeds of crime. If you ask me that's true of all bitcoin (or rather, all USD that's the proceeds of selling bitcoin), since while there are plenty of speculators moving money around, most of the money coming into the system (i.e. the part that makes the bitcoin price higher than 1/50000 pizzas) is from scams, drug deals, or scam drug deals.

You don't fear their control because you have nothing to hide. Then one day you want to speak up against them, but you don't because they control your money. So you never cross them. But one day, they seek you out and order you to do something. You have to comply because they own you.

If you control your money, it's your money. If they control the money, it's their money -- you only have it as long as they let you.

if you assume that the world order is controlled by the 1000 most powerful / wealthiest individuals in the world, they have more to gain from self custody enabled by bitcoin than everyone else. they also probably benefit more from financial privacy more than anyone else . Their incentives are aligned with bitcoin. Now they may not want to hold all their wealth in bitcoin, but surely some integer percentage, as big as 20%.

Completely disagree. They have even more to gain by being in absolute control, and bitcoin cannot be completely controlled, unlike a financial instrument which can be adjusted at the whim of the court systems and by decree from a central institution

There is no central court or institution. Trillionaires don’t trust those things. The only absolute control is in themselves. The principal agent problem is not solvable at that level.

Trillionaires still work in teams; they don't operate in a vacuum. Their influence extends throughout government, which is how they enforce their will, using the police, military, and court systems.

Wouldn't the incentives be the exact opposite? The "top" 1000 people on the planet currently benefit from the existing system's hegemony.

There is no hegemony at that level. It’s anarchy.

Either you are controlled by the government, or you are controlled by the captilist oligarchs. In a system where capital speaks louder than the people, only a true leftist could see another way out.

Cryptocurrencies exist that preserve privacy somewhat - bitcoin if you are knowledgeable, pay fees, and are very careful; monero pretty much perfectly; and tornado.cash for obfuscating ETH if you are familiar with that ecosystem.

However, there is an analog version of financial privacy that totally 100% breaks the chain of digital tracking - cash and gold coins.

IMO, if you oppose financial privacy in digital assets, then it is hypocritical to not advocate for the total ban of cash and gold. I don’t see any way to square this circle. If you still support cash, then you should advocate for some dollar limit under which privacy is OK for crypto.

Cash is anonymous for now, but all the notes are serial numbered, and recorded at some stops along the banking chain. Traffic analysis is possible with the system as it is.

The very limited number of licit places to translate gold and silver coins into other forms of money are a huge barrier to avoiding tracking.

Huh. Since Sacagawea dollars never took off (and therefore aren't always accepted as currency everywhere, and their presence would therefore be more traceable), that means that coins like quarters are the most untraceable US currency. That's something like $10-20 billion worth of quarters in circulation (who knows?).

...I wonder if that explains why there was a coin shortage in the depths of 2020 during the peak of the pandemic, when people were panic-buying lots of stuff? Maybe someone (or lots of people with the same idea) took out a lot of quarters and dimes (which have the same denomination-value-per-unit-weight) from banks with the idea they are untraceable, unlike paper cash.

And nickels and pennies, although heavier for a given total value, actually have a metal melt value about the same as their denomination.

I can totally see why people would panic-buy lots and lots of coins. The whole "people aren't going out to eat as much" argument didn't make sense to me. People panic-hoarding untraceable assets (some with actual metal value that has the added benefit of being inflation-proof, although illegal to actually melt down) does make sense.

I have a simpler explanation.

How much would it cost to clean a coin so that it won't spread Covid? How much sanitizer, already in short supply, would it consume?

It just wasn't worth it.

I suppose that explains why people wouldn't want to accept payment in cash, but that doesn't necessarily explain why there'd be a coin shortage.

I think this explains it fairly well


"In normal circumstances, retail transactions and coin recyclers return a significant amount of coins to circulation on a daily basis. However, precautions taken to slow the spread of the virus have resulted in reduced retail sales activity and significantly decreased deposits from third-party coin processors, resulting in increased orders for newly minted coins produced by the United States Mint (Mint). Third-party coin processors and retail activity account for the majority of coins put into circulation each year. For example, in 2019, the Mint contributed 17% of newly-minted circulating coins paid into the supply chain, with the remainder coming from third-party coin processors and retail activity.

Simply put, there is an adequate amount of coins in the economy, but the slowed pace of circulation has meant that sufficient quantities of coins are sometimes not readily available where needed. You may be experiencing this in your local communities. We are asking for your help in improving this coin supply issue."

Real question: how is bitcoin not preserving privacy (heard that a lot), how can you link an address to a person?

You link it to their exchange account when they cash in or cash out.


You need more and more Know your customer processes for crypto services because its getting regulated. So wallet addresses are linked to person Id.

What if I use a bitcoin node and not an exchange?

Then maybe you are anonymous. But maybe you also can't spend your money.

Applications are open for YC Winter 2022

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact