Slashdot Mirror
New York State Approves Two Dollar-based Cryptocurrencies (engadget.com)
Today, New York approved the first digital currencies that are tied to the US dollar, called "stablecoins." From a report: These cryptocurrencies avoid the price volatility of their brethren by being pegged to stable assets. The digital currencies in question, from Gemini Trust Company and Paxos Trust Company, are available to trade on their respective exchanges. The Winklevoss twins, who rose to fame with a lawsuit suing Mark Zuckerberg for stealing the idea for Facebook from them, have become major players in the cryptocurrency world. They are behind Gemini Trust Company. The currency is pegged to the US dollar on a one-to-one basis; the company will hold US currency that corresponds with all issued Gemini dollars at a bank eligible for the FDIC's pass through insurance.
Can I get the dollar back later?
Duh.
The only reasonable "value" from this exercise is the digital (read: artificial) production of crypto dollars (with broad traceability) instead of exchanging of real currency. If this path holds, then soon regulations for dollar-backed cryptos will follow that of big banks; namely, a "monetary stress test" so that the amount of real currency can itself be a diluted quantity from the asset class on hold... and then regulations will again cascade to exotic investment vehicles with another layer of dilution from the real currency. IOW, digitally bigger currency valuations will beget even larger economic collapses.
States don't have this right.
The Congress shall have Power To... ...To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;...
Aren't all cryptocurrencies dollar-based? They need to be converted to something of real value before they're used, after all.
So say I want $10,000 in one of these Winklevoss crypto-currencies I give them $10,000 in cash, they deposit the $10,000 in a bank, and I have the ability to spend $10,000 as a crypto currency?
How do the Winklevoses cover operating expenses? Am I paying a fee on top of my $10,000? Are the people I give these crypto coins to accepting less than 100 pennies for each crypto coin I give them?
How is this different from a pre-paid debit card?
Ken
Sorry, that is incompatible with the market's mantra of "infinite exponential growth".
It requires inflation, to squeeze even more money out of the livestock (me and you) without them noticing that their salaries get cut.
A 51% attack against this cryptocurrency would be a direct substitute for counterfeiting US dollars.
Still, the incredible inefficiency of a blockchain makes it far too inefficient to justify its use at any meaningful scale. Visa has a digital currency that is 1:1 with the US dollar, and it's a helluva lot more efficient.
"When information is power, privacy is freedom" - Jah-Wren Ryel
This is actually interesting because it sounds like these cryptocurrencies will be FDIC insured. The fact that it is backed by the US dollar means it is quite a bit more stable than the others out there.
So.. a centrally controlled blockchain based money transfer system? Thinking back to various 'internet gold' projects, I can not imagine this going well
The key to bitcoin is that it solves the DOuble spend problem. Of course it's solution is very electrically expensive. But it's that expense that creates a prohibitive barrier to deter double spending. The consequence of that is that is either fees or inflation (by mining) is absolutely required for bitcoin to work in a distributed system.
You can avoid the extremely high fees that deter doubkle spending if you want to give up the distributed blessing system. In that case you just have a central clearing house that a"promises" no double spends because only it can control the ledger. It can then use it's monopoly instead of a cost barrier to insure each coin is spent once.
by giving up on mining then, the transactions can then become fee based and for a low fee.
But then that's the same a visa or mastercard or for that matter a personal check.
most people associate crytptocurrency with distributed ledgers. not central clearing houses.
It sounds like this is just exactly another clearing house with a ledger that is weakly harder to alter over time than a conventional ledger.
Some drink at the fountain of knowledge. Others just gargle.
If it won't support virtual bobbleheads then it sounds rather useless!
Seriously, WTF is it for?
From article:"digital representation of the U.S. dollar that moves in an open, decentralized manner like cryptocurrencies"
From article/summary:"are available to trade on their respective exchanges."
So, open and decentralized MEANS ON THEIR EXCHANGE ?
Still no clues as to what one one does with it.
Then so are coupon companies like GroupOn and the ones printed in newspapers or given out at stores and casinos with their chips.
I thought most two-dollars were taken out of circulation. Maybe this is what the government is doing with all of them?
Interest free loans to a couple of rich dudes? :O
Sure I'll jump right on that
I see no mention of a USE for it yet........
Hi,
I loved the way you shared everything so well with us – the way you have gone about doing things – it’s surely an eye-opener for me and for many others too.
Thanks,
Let's Go
Pass-through FDIC is questionable at best. Claims can be DENIED on technical grounds that have nothing to do with YOU, and everything to do with Gemini. There are a lot of holes. I suspect people will gloss over the risk until a major incident happens, and THEN all of the issues will come to light.
Now you can tip strippers with crypto!
If the Republic of Rurethenia holds its foreign exchange reserves in US dollars, it could 'peg' the Rurethenian rasbucknik as being one dollar times a given coefficient. A country might do such a thing so it can have national pride in its own rasbucknik, with the King's face on it, and have it circulate internally at a fixed rate in dollars.
This proposal is for the same thing, but digital and crypto. The question is, why? The convenience of digital trade in real dollars is well established. If you want anonymity and privacy, just carry around wads of US cash. What commerce can you do with the digital rasbucknik that you can't do in dollars?
So, it's a loan, in USD, and the ledger is in a blockchain. That doesn't sound terribly innovative.
Just swipe your card through 'the slot'. Reader is in a piercing.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
... "New York State Approves Two-Dollar based Cryptocurrencies"
It must have been something you assimilated. . . .
and stupid fucking druggies that drag our society down. drug addict. loser. you're why we can't have nice things anymore.
Two flaws in your comment.
1. Its not the expense of mining that protects the integrity of the blockchain. It the distribute nature of the miners that protects the blockchain, the consensus of what the correct transactions are. The "work" in proof of work based system is merely how the mining rewards are randomized.
2. The expense of the work required for mining is actually making bitcoins less secure, increasing the risk of a manipulated blockchain. This expense has led to the development of ASIC based mining. By moving away from CPU and GPU based mining we no longer have a distributed system. ASIC based mining is far more centralized in terms of commercial mining operations so cartels are plausible. They are also highly regionalized, mostly in a single country near cheap government supplied hydroelectric power so government intervention is more plausible. Now I am not saying that cartels or government intervention is likely, the point is that the **reality** of bitcoin has deviated from the **theory** of bitcoin. In theory cartels and government could do nothing because the blockchain is maintained by ordinary users and their ordinary CPUs/GPUs and a 51% attack would be implausible. But with mining consolidate both in terms of commercial operations and regionally, cartel and government manipulation is increasingly plausible.
Bitcoin is at risk because it has deviated from its design, a system of distributed blockchain maintenance and consensus, the distributed nature lost.
Fortunately this can be fixed with a software update, one that brings mining back to the realm of CPUs and GPUs, ie regular users and their regular computers. Unfortunately miners would have to agree with that update and why would ASIC miners do that? So if bitcoin is to be "fixed" it will have to fork and be a different type of coin. The blockchain could fork with the code so no holdings are lost.
If a certain 'currency' is 'spent' 'just once' how the heck is it a currency ??
No currency is spent just once. Think of the journey of a dollar. It is spent by customers and received by your employer to pay your paycheck. It is spent when you go to the store to buy a box of toothpaste, where it is spent on employees, inventory, real estate, utilitiies, insurance. And the mop heads and detergent to clean up after someone made a mess in the bathroom. The manufacturer of the toothpaste spends the dollar to buy the cardboard box, have the box printed, have the toothpaste tube made, have the contents made, have the research scientists who made that new Iridescent White formula made, have the PR company come up with the trade name Iridescent White, etc...
How many hands and pockets and car cupholders does a coin go through in its lifetime?
Every time it is voluntarily exchanged and enters the possession a new holder in its lifetime, it has been spent. Same with paper money. Same with electronic funds transfers.
No currency is spent just once.
Remember that money is just a physical representation of services rendered. Work performed, or materials delivered (work performed by the people who supplied the materials - ie making paper, panning for gold, or running an oil rig to make plastic for iPhones). Money is just a modeling language.
Fire and Meat. Yummy.
whos mining a crypto that cant change its value?
if nobody mining, then whos processing transactions outside of these companies own servers?
Is the transactions and currency insured? this was the biggest hurdle of any crypto.
The U.S. is over 100 trillion dollars in debt. A cryptocurrency pegged to the dollar really makes me feel safe!
The biggest benefit of crypto currency is the government can't inflate its price using stealth taxes (or what Paul Krugman refers to as quantitative easing, as if it were a respectable thing governments do). With these dollar backed currencies the US Treasury can really cook people in fixed income and maim everyone else.
The benefit of regular dollars is the hackers aren't going to (directly) snatch them out of your hand and they are fairly easy to pass around.
I think states should have the de jure right to do this, but both parties should come together and put a stop to this.
What documents are required for your verification?
"Gemini - Help Center Using Gemini Getting Started
U.S. Applicants
Proof of identity — your valid government issued ID or driver’s license
International Applicants
Proof of identity — your passport
Proof of address— a full-page scan of either a bank statement, utility, cable, or cell phone bill for service to your home address (e.g., electric, gas or water). The document must display your name, current residential address, and must be dated no later than 90 days prior to the date of submittal."
Big Brother is watching. If you a U.S. citizen and transfer more then $10,000, you better file the proper FBI forms!
The $2 bill has never gotten much respect. It's long overdue that we now have Two Dollar cyrptocurrencies. So much better than all those One Dollar based cryptocurrencies. Hurray!
I mean who wants to use units of two dollars?
Maybe you should re-read the original article again :) You are just repeating my thoughts