Bitcoin Forum

Please discuss.  I mentioned it in another thread and felt compelled to raise a new topic.

Just a little heads up, folks.  They are not subject to FOIA like a government agency.  But they have all government agencies at their disposal.  So, why hasn't anyone pointed out the obvious.  The medium they choose can be theirs, BTC, alt, or Doge (for the love of dogs everywhere).  This is brewing as we speak.

people not wanting it, because it's controlled on the federal level?

They are a private corporation that influences money policy in US.  No government reach whatsoever.

they are a private corporation but also tethered to government. they are subject to oversight by U.S. congress.

They did such a great job with the dollar, I'm sure the world will welcome it with open wallets... not.

Nothing. It all boils down to trust in the end. Let's see what rules they apply to the crypto and then we'll have an idea of the worth. The more free, the more fungible, the more valuable. However, coming from a 3rd party known to have issues, it may lessen its value. Just depends on how initial distributions work.

Just FYI, my source is weak, but the jest is they are doing this very thing.  1BTC = 1USD.  Ask your local congressional reps and state reps to inquire.  

And thank you all for your input.

Excellent.  I for one hope they do it. 

Are we suggesting that the fed is all ready behind a particular crypto currency or planning to take one over?

Good. They can implement blacklists, and asset forfeiture, and demurrage, and identity tracking, and then people can stop suggesting that Bitcoin add those things because we can tell them to just use Fedcoin if that's what they want.

Wouldn't things like colored coins facilitate something like a federal reserve in bitcoin?

Or am I misunderstanding the application of colored coins in this case?

An entity could issue colored coins that are backed by debt, could they not?

Indeed they can.

Just imagine if the Federal Reserve started their own cryptocurrency, created a FedChain, blessed the banks to use it, ect. I can't imagine the limitations on it, but I am sure they would be bad. Probably would be a way for the feds to create their own coins in the protocol.

Soon there would online exchanges like Cryptsy.com that would allow you to quickly switch your FedCoins to BitCoins.
 I think ultimately, this would actually accelerate the fall of the dollar.

What has drawn a lot of people to cryptos is its decentralized nature. The Fed would just be in essence creating a digital USD. Don't think it would spark too much support.

If I were the Fed I would be working on creating cryptocurrency. It might mean dollars are used less but the average person would be much more open to using "Fedcoin" rather than bitcoin I would think. I don't think Joe Sixpack cares too much about decentralisation.

What features would this Fed coin have that would have people rushing to use it? If it is going to be centralized why even have a crypto coin?

It doesn't make any sense whatsoever for them to have a satoshi-style system. Being a centralized third-party issuer that controls access, they experience none of the inherent problems that a cryptocurrency was conceived to solve in the first place. A "Fedcoin" wouldn't be a cryptocurrency, it would be a database.

This is why the Federal Reserve will never create a Fedcoin.  It would make the escape from fiat much easier.

They could create a coin to 'hedge their bets' so to speak with the dollar. The advantages that 'Fedcoin' would have is being backed by the government, meaning the core developers would be paid by the government, instead of what we have with the bitcoin foundation. They could have hundreds of paid developers constantly iterating a superior software product. With the type of programmers they could attract they could take every advantage of altcoins like faster confirms and cpu mining. As well as have decentralised exchanges with the free flow of fiat to fedcoin(I don't know exactly how they would do this, but obviously the government controls fiat, so if they wanted to open this up they could).

There's lots of options for them if they chose to do something like this. I think if they wanted to establish a coin with clear advantages over bitcoin, they could. They have the resources.

Of course for a lot of people it would all be meaningless since their primary motivation for using bitcoin is to detach themselves from government control, but the majority of people aren't necessarily interested in that.

I don't think the Fed or the government would actually do a project like this. But they probably should. Even just as a reference type of thing to help propel the technology forward.

Why would they do that? They already have an electronic system in place. Are you suggesting they replace FedACH and FedGlobal with something else? It would have to be something that worked a hell of a lot better than Bitcoin. The Bitcoin network would be crushed by the massive amount of transactions that FedACH and FedGlobal process in a day. That's 60 million transactions a day with a total value of 2 trillion dollars.

Aren't we all.... subjects, in this neo-feudal capitalist caste system?

Nothing is to stop the Feds from making their own coin, but this would set precedence that crypto would be ok to use in all aspects. Except the nature of crypto, especially the semi-anonymity of it, would directly conflict with other government branch securities, so I don't see this happening.

If it were to happen, no one will support it anyways, seeing how they are to only serve the interest of the government.

To answer the question What stops a Federal Reserve crypto scheme of their own the problem is that they would have to ensure a consistent rate of supply and back it up to their own currency.

In essence there can never be 21 million US dollars in circulation as the press could not and is not able to base it off a consistent supply basically it is incredibly difficult to print money in that system or do fractional reserve banking.

What would be the point of a centralised decentralised coin?

Implied legitimacy, trust, less volatility, accountability, essentially all the things that Joe and Susie citizen are skeptical about with current crypto-currency models.  

Edit: and it might be the only way to revive the USD against the renminbi.

And like I was saying in another post up there imagine what kind of development could be put in to a coin like that. Imagine a team of 200 top tier programmers working full time on the software. It would be amazing. And since it would be open source the benefit to the community(for study and forking purposes) would be amazing.

Question is what's stopping them to print enough USD to buy them all, or constantly buying them so centralizing it and ruining it that way...

No one would want it.. no one.

Holding your coins for starters. They don't need to buy them up when they can just seize them from places like silk road etc.

Because a centralized decentralized monetary system makes no sense. And if they don't centralize it than it becomes difficult - other than by whatever initial coins they deem as theirs - to make a profit of it. And if they aren't doing that then they are just undercutting their other profit making mechanisms.

If they do try to profitize it than other alt coins make more sense and as the Fed's indirect regulatory power extends only to the US the other cheaper coins would flourish overseas and underground in the US.

Bingo!   The reason Bitcoin exists is that it is a payment system that is from from censorship (i.e., restrictions on who can receive payments or what the payments are for) and from corruption (i.e., impose taxes on transactions or the money supply, confiscate the wallet of a lawbreaker, etc.)

The Fed already has electronic monetary systems.  A coin that competes against their own systems would not be welcomed.

bitcoin is p2p decentralized, all other fiat currencies are centralized, totally different ways to achieve the same thing, and that is a fiat currency.

IMO centralized currencies should have to be backed by gold/sliver, but it is what it is.

What I would recommend to the OP is just look into the problem that Bitcoin is designed to solve in the first place. Read the Satoshi whitepaper. Then go back and re-evaluate whether the original question makes any sense whatsoever in the first place.

There might be something vaguely similar but unrelated to the idea of the Fed actually launching a coin, but that would be central banks and/or other depository institutions actually holding Bitcoin as assets on their balance sheets, but that's a totally different thing and quite far into the future if at all.

And U.S. congress simply don't understand how money works. They allowed the removal of gold standard, since then reserve bankers are printing money like crazy to buy everything they can

Nor does the fed, the executive branch or the judiciary. We are lead by looters and their financial backers.

Of course they understand how money works. Going off the gold standard made them and their cronies fabulously wealthy.

The monetary system is working perfectly (for them).

They understand how their money works. They will be trying to play catch up with bit coin for quite some time.

The thing is, bitcoin is already letting people know how much freedom they've been missing. It's never going to go their way unless they let go.

The important thing about Bitcoin is that it is decentralized. There is no way the Fed would release an open source decentralized currency that anyone could mine equally. The Fed exists to manipulate the money supply. The whole point of Bitcoin is that no one can manipulate the money supply. No coin controlled by any single entity can ever be Bitcoin.

Nothing stops them from doing so, but it will not catch on.

Few people would be stupid enough to leave fiat for digital fiat. Because a centralized crypto is just that, digital fiat. And it has mostly disadvantages over regular fiat.

The government wishes they could get a crypto of their own and make it popular, but they won't be able to make it popular.

But nothing is stopping them from creating a myriad of viable sleeper cells from creating their own coins for whatever purposes.

They can't even build a healthcare website. How in the world can they build and then market a crypto currency? 

I like the way you're thinking about this.  Very good!  Care to guess which alt(s) are them?

The govt. can't organize anything  efficiently which is why I tend not to believe conspiracy theories

Breaking news!: It'll be easier to name the alts that aren't.

So true, and they finally realized this truism themselves most recently, hence farming out their objectives via Business Wire, et al.

They would probably replace "free mining" with a requirement that a completed block also be submitted to the fed for approval/validation and then digitally signed by the Fed, before being awarded,  and a portion of the block reward has to be going back to the fed as the fed's fee,  so the fed decides which bank (or that the fed itself) is going to successfully mine the next block.

The fed could then be enabled to specify FedCoin reward for mining, difficulty parameters, and "fed's fee" parameters centrally, for each individual block, instead of letting a distributed algorithm decide the mining parameters.

The fed's ability to reduce difficulty, increase reward  ("liquidity infusion"),  or increase fed's fee for the block taken from the reward ("liquidity removal"),   then lets the fed influence money supply.

Also, at any point in time, the fed can decide that the next block and the next 10% of the blocks will be won by the specified bank -- .e.g.  the fed,  regardless of hashing power,  and have a specially magnified award.