Australian tax agency seeks public input concerning cryptocurrency taxesbitcoin newsmp3
They are also silent about the transition from the current system with deposits to a new system with interest bearing CBDC in which demand for deposits would drastically fall.
Bordo and Levin favor abolishing cash to render monetary policy most powerful. Monetary policy thus could move from positive inflation targets to a price level target. In a way, this is like selling air miles in a startup airline; investors can either use the miles for flights or hope they can trade them at a profit. For the business, it is also a way of creating demand for the product they are selling.
But in plenty of cases, an ICO is just a way of raising capital without all the hassle of meeting regulatory requirements, or the burden of paying interest to a bank. On bankunderground, Simon Scorer reminds us that a central bank issued digital currency CBDC need not operate on a distributed ledger platform. The two do not have much to do with each other. CBDC is far from just a simple question of technology; any central bank contemplating CBDC will need to answer a host of fundamental economic questions, as well as considering how feasible it is to achieve all the required features and what type of technology might enable this.
On Bloomberg view , Matt Levine discusses the recent bitcoin fork. The handling of long and short positions on Bitfinex, a bitcoin exchange, created an arbitrage opportunity, until Bitfinex changed its mind.
Bitfinex announced a policy to deal with the fork, people took advantage of the policy, and Bitfinex changed its mind after the fact. Each of its decisions was rational, and quite plausibly the fairest option available to it. None of those decisions were required by, like, the nature of bitcoin, or of short selling: There is no single obviously correct solution to these issues. Instead, each decision was sort of weird and contingent and reversible: And so it has become encrusted with other human institutions.
And those institutions turn out to be unsurprisingly human. In the Trustlines Network. This allows to issue people powered money between friends and facilitate secure payments between strangers, by sending payments along a chain of trusting friends. This is not necessarily good news for the blockchain community.
All of this raises an important point about actual shareholder rights within these structures. Say a legally-incorporated institution with actual shareholders dishes out an uncapped amount of tokens promising a share of revenues or dividends via the ICO process. And if so, how does that square with the way risk is distributed through these systems?
The Economist reports about government initiatives aimed at using blockchain technology in the public sector.
Since contracts are unmodifiable and thus unstoppable there is no central authority to terminate the execution of the scheme or force the initiator to refund victims. Decentralisation is, in almost all cases, not an efficiency. At the end of the day, there are only two groups of people prepared to go to costly lengths to decentralise a service which is already available in what is often a much higher quality form in a centralised or conventional hierarchal state.
One group is criminals and fraudsters. The other is ideologues and cultists. On Bloomberg , Yuji Nakamura and Lulu Yilun Chen report about conflicting views in the Bitcoin community on how to address capacity limits in the blockchain. Bitcoin Unlimited is essentially a software upgrade to the blockchain. While that slowed down the network, it was seen as a necessary safety measure against potential attackers who could overload the system.
While most agree the blockchain is stronger, critics … say that removing the data cap is a risky move which will leave bitcoin vulnerable to governments and global banks. Without a limit, large organizations would use their resources to out-muscle smaller miners and effectively take control of the blockchain and bitcoin itself.
See the VoxEU article. Presentation at the Liechtenstein Institute about the Vollgeld initiative, the blockchain revolution, and their possible effects on banks and the monetary system. Report in Liechtensteiner Vaterland, February 1, Interview in Wirtschaft Regional, February 4, On Wired , Andy Greenberger discusses Monero, Dash, and Zcash, krypto currencies that provide more privacy than bitcoin and its derivatives.
Unlike commercial services like PayPal, Bitcoin allows anyone to spend money online without providing identifying details. More recently, Zcash debuted with the strongest anonymity promises yet—it uses cryptographic tricks designed to make tracing a transaction not only unlikely, but mathematically impossible. Zcash has yet to be integrated into dark web markets, though, and still requires wielding the command line to use.
NZZ, November 29, Central banks are increasingly interested in employing blockchain technologies, and they should be. VoxEU, October 19, SRF, October 8, The blockchain technology opens up new possibilities for financial market participants.
It allows to get rid of middle men and thus , to save cost, speed up clearing and settlement possibly lowering capital requirements , protect privacy, avoid operational risks and improve the bargaining position of customers. Internet based technologies have rendered it cheap to collect information and to network.
But both fintech and sharing-economy companies continue to manage information centrally. The blockchain technology undermines the middle-men business model.
Program , links to slides. Bordo and Levin favor an account-based CBDC system managed or supervised by the central bank rather than central bank issued tokens in the blockchain. They emphasize the Friedman rule and the fact that interest paying CBDC affords the possibility to satisfy the rule:.
These … goals — … a stable unit of account and an efficient medium of exchange — seemed to be irreconcilable due to the impracticalities of paying interest on paper currency, and hence Friedman advocated a steady deflation rather than price stability.
But the achievement of both goals has now become feasible using a well-designed CBDC. Interest paying CBDC would imply—payments to account holders. Bordo and Levin do not discuss the political economy implications.
They are also silent about the transition from the current system with deposits to a new system with interest bearing CBDC in which demand for deposits would drastically fall.
Bordo and Levin favor abolishing cash to render monetary policy most powerful. Monetary policy thus could move from positive inflation targets to a price level target. In a way, this is like selling air miles in a startup airline; investors can either use the miles for flights or hope they can trade them at a profit.
For the business, it is also a way of creating demand for the product they are selling. But in plenty of cases, an ICO is just a way of raising capital without all the hassle of meeting regulatory requirements, or the burden of paying interest to a bank.
On bankunderground, Simon Scorer reminds us that a central bank issued digital currency CBDC need not operate on a distributed ledger platform. The two do not have much to do with each other. CBDC is far from just a simple question of technology; any central bank contemplating CBDC will need to answer a host of fundamental economic questions, as well as considering how feasible it is to achieve all the required features and what type of technology might enable this.
On Bloomberg view , Matt Levine discusses the recent bitcoin fork. The handling of long and short positions on Bitfinex, a bitcoin exchange, created an arbitrage opportunity, until Bitfinex changed its mind. Bitfinex announced a policy to deal with the fork, people took advantage of the policy, and Bitfinex changed its mind after the fact. Each of its decisions was rational, and quite plausibly the fairest option available to it.
None of those decisions were required by, like, the nature of bitcoin, or of short selling: There is no single obviously correct solution to these issues. Instead, each decision was sort of weird and contingent and reversible: And so it has become encrusted with other human institutions.
And those institutions turn out to be unsurprisingly human. In the Trustlines Network. This allows to issue people powered money between friends and facilitate secure payments between strangers, by sending payments along a chain of trusting friends.
This is not necessarily good news for the blockchain community. All of this raises an important point about actual shareholder rights within these structures. Say a legally-incorporated institution with actual shareholders dishes out an uncapped amount of tokens promising a share of revenues or dividends via the ICO process. And if so, how does that square with the way risk is distributed through these systems? The Economist reports about government initiatives aimed at using blockchain technology in the public sector.
Since contracts are unmodifiable and thus unstoppable there is no central authority to terminate the execution of the scheme or force the initiator to refund victims.
Decentralisation is, in almost all cases, not an efficiency. At the end of the day, there are only two groups of people prepared to go to costly lengths to decentralise a service which is already available in what is often a much higher quality form in a centralised or conventional hierarchal state.
One group is criminals and fraudsters. The other is ideologues and cultists. On Bloomberg , Yuji Nakamura and Lulu Yilun Chen report about conflicting views in the Bitcoin community on how to address capacity limits in the blockchain.
Bitcoin Unlimited is essentially a software upgrade to the blockchain. While that slowed down the network, it was seen as a necessary safety measure against potential attackers who could overload the system. While most agree the blockchain is stronger, critics … say that removing the data cap is a risky move which will leave bitcoin vulnerable to governments and global banks.
Without a limit, large organizations would use their resources to out-muscle smaller miners and effectively take control of the blockchain and bitcoin itself. See the VoxEU article. Presentation at the Liechtenstein Institute about the Vollgeld initiative, the blockchain revolution, and their possible effects on banks and the monetary system.
Report in Liechtensteiner Vaterland, February 1, Interview in Wirtschaft Regional, February 4, On Wired , Andy Greenberger discusses Monero, Dash, and Zcash, krypto currencies that provide more privacy than bitcoin and its derivatives. Unlike commercial services like PayPal, Bitcoin allows anyone to spend money online without providing identifying details. More recently, Zcash debuted with the strongest anonymity promises yet—it uses cryptographic tricks designed to make tracing a transaction not only unlikely, but mathematically impossible.
Zcash has yet to be integrated into dark web markets, though, and still requires wielding the command line to use. NZZ, November 29, Central banks are increasingly interested in employing blockchain technologies, and they should be.