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Boston Fed releases report, source code of digital currency prototype study
- lvl100 5y agoI wasn’t aware they would make this open. It’s a great way to play around with toy digital currency implementation. There goes my plans for rest of weekend.
- _-david-_ 5y agoWill this basically mean the federal government would have a record of all our transactions?
- rvense 5y agoThis is a legal problem, not a technical one.
- tantalor 5y agoIt depends on how Congress writes the law that would enable CDBC. They could simply copy & paste the existing laws regarding banking privacy, e.g., RFPA. https://en.wikipedia.org/wiki/Right_to_Financial_Privacy_Act https://en.wikipedia.org/wiki/Right_to_Financial_Privacy_Act
- uncletammy 5y agoAs if the FISA courts wouldn't be employed to circumvent any constraints placed on the system by congress.
- tantalor 5y agoThat's already the case with existing banks so not much of a useful distinction to make here.
- hnaccount141 5y agoThey already do, they just have to ask Visa/AmEx/Mastercard nicely.
- _-david-_ 5y agoNot if you pay in cash. The problem with many of these proposals are that the backers also want to start limiting the use of cash.
- _xnmw 5y ago- Maximum demonstrated throughput ~1.2M transactions per second. - Geo-replicated latency <1 second. Amazing technical feat. [1] https://github.com/mit-dci/opencbdc-tx https://github.com/mit-dci/opencbdc-tx
- jonathan-adly 5y agoIt’s ironic that they named it project Hamilton. He is probably rolling in his grave now thinking that Jefferson would be finally proven right with CBDC and the insane ever increasing Public debt. "banking institutions are more dangerous to our liberties than standing armies," Thomas Jefferson
- skybrian 5y agoHistory hasn't been kind to either of Jefferson's opinions in that sentence. The US did abolish the central bank for a while and nothing good happened as a result. Also, military coups are a problem in many countries, but not the US.
- culturestate 5y ago> History hasn't been kind to either of Jefferson's opinions in that sentence...military coups are a problem in many countries, but not the US. In fairness, if Jefferson had his way, there wouldn't be much of a military around to plot a coup in the first place. He'd also be considered a staunch non-interventionist were he alive today - "peace, commerce, and honest friendship with all nations and entangling alliances with none." Not much use for a standing army when that’s how you see your role in global affairs.
- sp332 5y agoI think that argument had more power before a bunch of Canadians set the White House on fire.
- soperj 5y agothe US started that war.
- skybrian 5y agoThis despite being mostly unprepared: https://en.wikipedia.org/wiki/War_of_1812#Unpreparedness https://en.wikipedia.org/wiki/War_of_1812#Unpreparedness Apparently having a very small army didn't help when Jefferson's party wanted a war. I guess they over-rated state militias? A lot of the founders' ideas didn't work out they way they hoped. (For example, they tried to prevent political parties and failed utterly.) When people quote American founders out of context, it's as if it settles things, but they were just making it up at the time, often based just on what sounds good. Jefferson in particular was often a rather impractical man, but a popular politician who promoted a lot of bad ideas (and a few good ones) that made for good politics at the time. He's hardly the only one.
- mjevans 5y agoThe mention of blockchain in the summary worries me. We have real world data that shows us this only leads to wasted electricity and fabricated silicon shortages/outrageously expensive computer hardware. The idea of a public ledger and distributed witness signatures is sound though, and that should be the basis of a government approved system of inter-reserve asset tracking.
- RandomLensman 5y agoThey opted against the use of DLT, so ok for now, I suppose. After all, it is something explicitly under central control.
- jlarocco 5y agoI think you may be confusing "blockchain" with "bitcoin". A blockchain is just blocks of data linked together using hash functions to guarantee the authenticity of previous blocks. There's no mining, and only a tiny amount of electricity used.
- jonathan-adly 5y agoThe anti-crypto bros don’t need that kind of nuance. Blockchains = bad, we don’t need to complicate their simple world with big words.
- whimsicalism 5y agoWhy not just be charitable and not malign entire classes of people with certain opinions?
- skybrian 5y agoIsn't that a Merkle tree? "Blockchain" is not commonly used for what git does.
- macksd 5y ago"Block chaining" is absolutely used to refer to that concept in cryptography, and pre-dates cryptocurrency.
- throwthere 5y agoShould name it PowellCoin— This is what happens when the Fed governors won’t let him print USD any more. I jest, it actually is kind of interesting and could allow an even closer look at the day to day operations of banks if the ledger was in fact published.
- newaccount2021 5y ago
- cryptica 5y agoCDBCs are going to be a goldmine for hackers. If implemented as centralized systems, some hackers and insiders are going to have access to unlimited free money. The fact is that nobody, no group of people on this planet is trustworthy enough to implement such an important system. Such people don't exist. Such centralized system is guaranteed to be corrupted. This is why such important financial systems MUST be decentralized, at least to the extent that anyone should be able to verify the correctness of the system's state independently.
- annoyingnoob 5y agoIts clear that current implementations of decentralized finance are also deregulated. There is a reason that we have some regulation, every single financial scam that is regulated in centralized systems is currently active in decentralized systems. Your concept of decentralization has been corrupted from the start.
- dragonelite 5y agoI have been cashless for pretty much a decade, I'm more interested in what smart money that can be programmed can do. Like can i get paid instantly for every KWH i deliver back to the grid via solar panels. Can my salary or hourly contract be streamed to my bank account. These sort of things are all possible in crypto.
- wayoutthere 5y agoSo is irrevocably draining your net worth in half a second if your vendor makes a mistake.
- SkipperCat 5y agoCan you not get paid for every KWH you deliver to the grid right now? My friend has a solar power setup at his house and he gets credits to his bill when he produces more than he consumes. That would be pretty simple to make into an ACH to his bank account. It just seems to me that everything you can do with crypto you can do with the existing financial system. Maybe not 100% of crypto's features, but easily what a huge majority of people and institutions rely on and use today.
- nabla9 5y agoCentral bank digital currency efforts seem interesting. 1. They make it possible to deliver helicopter money directly to the consumers. Now central banks can only work trough banks or financial markets. Digital currency where everyone has access to central bank money can correct the errors in current systems. 2. Currency would be anchored in real economy with sound monetary policy. Nobody in their right mind takes Bitcoin denominated 10 year mortgage.
- anm89 5y agoI don't understand what you are saying here if point 1 is that it enables helicopter money, how is the conclusion in point 2 that it enables sound monetary policy?
- nabla9 5y agoSound monetary policy according to Fed mandate and goals is low unemployment rate and average inflation rate 2 percent over medium length period. Many argue that helicopter money is better alternative to quantitative easing (buying bonds). Just give money to the people. Buying bonds is ineffective because bond holders don't consume. The velocity of money just drops and asset prices increase. (you may picture helicopter money as trowing more money than is needed, but that's now what the idiom means. It means that the money lands on people, not banks).
- anm89 5y agoI dont think the term sound is used by many to imply that the fed is simply following its mandate. if so then the fed has been doing "unsound" monetary policy for most of the last 10 years. Sound is generally used specifically in a connotation of not debasing the currency. Also gotta strongly disagree that the concept of helicopter money has no connotation of amount. to each their own I guess.
- nabla9 5y ago> if so then the fed has been doing "unsound" monetary policy for most of the last 10 years. Fed has to work within the tools it has. Especially when government is stuck and fiscal policy is almost never sound or enough. With the tools it has, it has done it right. The problem is that there is zero lower bound.
- ur-whale 5y agoMany people on HN claim that the rise of crypto-currencies is a social catastrophe. Maybe so (I disagree), but wait until central-bank issued digital currencies become a reality, you'll very quickly learn the real meaning of social catastrophe. Spending 10 seconds thinking about it, I can come up with the following scenarios: - complete and utter "financial deplatforming" if you don't behave as a citizen. This is basically China's CCP dream come true. - total loss of privacy: the absolute entirety of your financial interactions are an open book to the government. You won't be able to buy a pack of gums without big brother knowing about it, much less paying for your sex toys. - security nightmare : how do you guarantee the soundness of such a system when it is centralized. Just ask Sony how long they manage to keep their private keys secret on average. - security nightmare : preventing the leakage of citizen's private financial information. If the chain is public, there is none. If it is kept under lock and key by the govt: 1) no way to check what the actual supply is 2) subject to hackage and publishing the data publicly. Knowing the track records of governmental institutions when it comes to IT security, this is basically a guaranteed fuck-up within the first 5 years of such a system existing. - economic nightmare: running the printing press full steam is now instantaneous and gives the government even more unchecked power to spend money on brain-dead programs, without leaving any decision-making power to the citizens. I don't think we will avoid the implementation of such an abomination, but I do believe that - like in everything political - if there's healthy competition from decentralized chains such as Bitcoin, the craziness will be kept in check because there will be an escape hatch to the govt. economic jail.
- mrkentutbabi 5y agoThis is precisely why I am still a crypto believer despite all its flaws.
- RandomLensman 5y agoMost points could already apply in current payments and banking systems with only a few big players (basically security, privacy). The economic nightmare is maybe a degree up, but not really more. Generally speaking, it also tends not to be just "the government" doing stuff that no-one wants - there will be people liking whatever the policy is. The only real new point is that CDBCs with any kind of programming would effectively be vouchers, not money (ie your first point).
- deleted 5y ago[deleted]
- beefman 5y ago"In our design users interact with a central transaction processor using digital wallets storing cryptographic keys. ... Despite using ideas from blockchain technology, we found that a distributed ledger operating under the jurisdiction of different actors was not needed to achieve our goals. Specifically, a distributed ledger does not match the trust assumptions in Project Hamilton's approach, which assumes that the platform would be administered by a central actor."
- lvl100 5y agoThis is right to some extent. They can have distributed ledger in virtual sense.
- slickrick216 5y agoIsn’t this somewhat like hyperledger where it’s a permissioned federated blockchain?
- tylersmith 5y agoThat's basically a requirement for a CBDC. They're certainly not going to promote a coin they don't control the consensus rules for.
- DennisP 5y agoThis doesn't sound all that different from the banking system we have now.
- tadfisher 5y agoThe key words here are "central transaction processor". Being able to interact with the financial system without going through intermediaries would eliminate an incredible amount of waste in the form of most of the payments industry.
- WaxedChewbacca 5y ago
- ur-whale 5y agoFWIW: https://github.com/mit-dci/opencbdc-tx https://github.com/mit-dci/opencbdc-tx Detailed architecture: https://github.com/mit-dci/opencbdc-tx/blob/trunk/docs/architecture.md https://github.com/mit-dci/opencbdc-tx/blob/trunk/docs/archi... Some remarks: - Seems to be implemented in C++ - Looks like they reused bits and pieces from the Bitcoin code base (bech32, secp256k1, sha256) - Claim of being able to handle 1.7M TPS - Experimented with UTXO-style (Bitcoin-like) but seem to have bet on something called "unspent hashes" instead. - I found very little on things that matter (policy-related): - How is the "central authority" implemented - How is the coin supply managed
- kangaroozach 5y agoFIAT
- warabe 5y agoi was wondering ... what if we circulate coin infinitely to harass central system? like keep exchanging coin between A and B. Can we halt entire system down?
- bhawks 5y agoThere are probably scores of abuse vectors waiting to be exposed. Getting caught exposing or exercising them might land you in a place where you can never have money again or worse.
- wolverine876 5y agoAny system is vulnerable to exploits. One advantage to having the government run the system is they have the power of law, law enforcement, and enormous resources to stop attackers. The financial system isn't dependent on someone's technical defenses.
- ur-whale 5y agoWell, if this monstrosity ever come about, just run an experiment: try to do it and see how long they let you do it before deplatforming you from the entire economy.