"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."
The 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.
There's a reason why the saying goes as "follow the money" and not "follow the mail". Think about why and you'll understand why CBDC is Orwellian worst nightmare.
one secret there is, they can photo record every source addr<->dest addr from the post item face, for some or all of the delivery, for years and years without fail, keep those records, and then do investigative work from that.
They never open the package, and technically, they are quasi-public.
Public enough that they can't play fast and loose like everyone else, but private where it matters in terms of not having literal Federally administered databases all just eafer for the reaping.
The USPS isn't quasi-public, it's fully public, an “independent” (meaning it has an Presidentially-appointed, Senate confirmed board with limits on degree of single-party domination) federal executive-branch agency.
The fed is quasi public too? It’s actually less public than the postal service, the postal service is a fully public agency, the fed is partially governed by private banks.
Nonetheless, given that the individual regional banks are have directors that are elected by the member banks, control over certain levels of fed policy are in a sense private, whereas that is nowhere true for the postal service. At least not to my knowledge.
It is better for the government to run financial infrastructure. The restrictions imposed by PayPal and the banks on certain types of businesses can then be challenged in court.
Reading Matt Levine's latest column on this CBDC was sort of mind blowing. With a truly centralized digital currency the Fed would basically monopolize all bank deposits (why store money in the bank at all when your digital wallet is perfectly safe) and destroy the entire banking sector.
So they are forced to decentralize the currency to some extent, so that banks are the ones to actually issue the currency (after borrowing it from the fed).
Or couldn’t it force banks to offer better rates on accounts? If the Fed will store your money for free, then the banks would have to offer a few percent return to get you to lend to them.
Exactly. CBDC is not a response to cryptocurrencies. It is a (belated) response to the fact that the way cashless economies have evolved has basically privatized money-as-infrastructure.
The privacy implications of CDBC are a real problem, but the rapidly approaching end game of the current slippery slope is one in which, among other things, all participation in the economy is gated entirely by private banks. No sovereign country should accept that. And yes, any real implementation of a blockchain as a day-to-day cash replacement will have the same problem. These are legal problems requiring a legal solution, not a technical one.
I think you’re talking about his column from Tuesday [1], which talks about different research at the Fed [2] that suggested that there is a trade off between “credit provision” (i.e. private lenders taking a risk and extending credit to their customers who they have relationships with) and “stability”. In a credit crunch, investors could flee to a CBDC and make the crisis worse.
> why store money in the bank at all when your digital wallet is perfectly safe
Because banks lend the money out, earn revenue from that, and thereby pay you interest. Banks aren't vaults; they are money circulation machines. Their business is finding the best investments, which creates efficiency in allocation of capital in the economy.
Banks in the UK pay out a maximum of 1% interest on even the best savings accounts (i. e. the return doesn't even keep pace with average person's PoV inflation). I am skeptical of this explanation for why we should let the banks hold our money. Or indeed remain alive as anything but a source of borrowing.
> Banks in the UK pay out a maximum of 1% interest on even the best savings accounts (i. e. the return doesn't even keep pace with average person's PoV inflation).
Interest paid on deposits is a free market (generally speaking); if that rate isn't worthwhile to people, they will start leaving and the bank will raise its rates.
> I am skeptical of this explanation for why we should let the banks hold our money.
You aren't 'letting' them and it's not a collective decision. You personally choose to give them your money. Put it elsewhere if you like.
> Or indeed remain alive as anything but a source of borrowing.
They can't lend money without deposits. The deposits are the money they lend.
> if that rate isn't worthwhile to people, they will start leaving and the bank will raise its rates.
No, that is evidently not happening. When I said "banks", I meant "literally all banks" (minus tiny regional credit unions or the occasional fluke that might give you up to 1.2% - wow, that is so much money, I could retire on it). People generally don't move banks either. They tend to stay with whomever they started banking first.
> You aren't 'letting' them and it's not a collective decision. You personally choose to give them your money. Put it elsewhere if you like.
My main alternative to holding cash in a bank is cryptocurrencies (which are accepted ~nowhere), or holding my money as cash. Handling cash has been in decline even before the pandemic, and nowadays I very rarely see people pay cash. Assuming that cash remains on the current trajectory, banks will become the only mainstream option.
> They can't lend money without deposits. The deposits are the money they lend.
They have enough money saved up in their coffers for that. I also can't imagine that most loans for a higher value than a credit card account would be entirely unsecured. This is especially true for house purchases - it's generally impossible to buy the house you want without a mortgage, and the house is what you lose I'd you don't pay them back.
It’s somewhat true in the sense that banks need to keep some fraction of their deposits in cash as reserves (the “reserve ratio”). So if they lend money it needs to be backed to that extent by their deposits.
A FOIA request to the fed about their stimulus spending from 2008-2010 was just released, and in this period the fed spend nearly 30 trillion to bail out banks so there being a separation between it and the banks is questionable
Banks don't make any money from your accounts. In fact your money in cash accounts is a liability to the banks. Banks also do not hold mortgages, they sell them as soon as the ink is dry. There's a lot of misunderstandings about the current banking system in this subthread with knowledge of what banking was decades ago. No banks would go out of business from this.
To see how tyranny can be instituted by combining a non anonymous transaction system with vaccine passport look at the promo video for Bill Gates funded wallet Thales
- 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
Central 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.
Helicopter money has always been theoretically possible to deliver direct to [most] consumers, with a bit of help from authorities responsible for tax/benefits/pensions, albeit somewhat inefficiently. But half the problem of monetary policy (the more relevant half in the immediate future) is reducing the money in the system when inflationary pressure is high. That's where channelling monetary policy through changes in the interest rate starts to make sense (the reduction is a natural one as people and corporations borrow less, which is a lot less politically painful than withdrawing a direct subsidy or even debiting people's accounts)
Sound 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).
I 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.
> 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.
If you are explicitly defining "sound" policy as following the mandate then their intent or reasoning is irrelevant. According to this logic, they failed to reach 2% inflation for most of the last 10 years and therefore the policy was unsound.
As you'd be right to point out, almost nobody defines monetary policy in these terms, but it's your definition. The fed balance sheet is 1/4 the size of the total economy, the over night rate is so low that OMO only works in one direction, it takes more than 1.5 Trillion dollars of reverse repo a night to keep banks in operation, and the Fed is so backed into a corner that they purchased bonds and didn't raise rates (expansionary) in January while inflation was at 7%.
Meanwhile former Fed board members, former treasury secretaries, and basically every macro bank analyst in existence is commenting that the Fed has made it's biggest policy error of all time.
So sure, keep arguing that they are doing "sound policy" whatever that means. Most people aren't going to buy it.
I 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.
Many 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.
We already have all of this. The government can tell your bank to do something, and your bank will do it. What a government digital currency would do is end the subsidy of banks as the only "safe" place to park money. If I have a government account with my money, banks don't get to gamble with it for their own benefit. If I want to do that, I could withdraw the cash from where it is safe and consciously put it at risk, rather than the government backstopping the finance industry.
If government bits are just the beginning of a banning of cash, that's the real problem; but there's no reason they can't ban cash now.
The benefit to some sort of government semi-distributed ledger would be that independent people could set up ATMs. Otherwise, I'd just be happy with postal checking/savings. We already have a bunch of post offices.
That's assuming that your bank cares about keeping your transactions private enough not to voluntarily submit to anything asked of it.
If you hate the idea, you'd still be free to park your cash with some rando that promises to keep it safe, just without subsidy. Hell, the existence of a gov digital currency might ironically stabilize bitcoin or a bitcoin-like.
You can park your money safely anyway, just buy a vault. There are even specialized bank accounts where they just store you money and don't lend it out.
However, you won't earn any interest, and thus will lose opportunity cost and also lose value as cash inflates.
Additionally, the money that banks lend is critical to the economy - which includes your job and the general welfare - like water to a person. If banks stop lending - if all that money gets put in a vault - businesses and citizes lose access to money to develop things and we get talented people and valuable resources sitting dormant, a depression.
Recently, and for the foreseeable future, interest rates are/will be so far below inflation that they truly do not matter. A mattress might be just as good as a bank for the next decade or so.
It's been true for a very long time, and unless we see enormous amounts of growth, it will have to stay true. If you look at Fed plans to raise interest rates, you'll see that even in the highest estimates they're looking at fractions of a percent. Meanwhile, we're having months with 8% annualized inflation.
Until this year, we've hardly had any inflation since before 2008, at least. Deflation was a bigger concern. The margin between inflation and interest rates was very small.
I see what you are asserting, but again, what is all this based on?
"Locking you up" would cost a hell of a lot more money than simply updating your `isBlacklisted` field in a database entry. The latter could be done for every citizen at negligible cost.
Most 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).
- Efficiency: much of the legacy financial institutions are no longer needed in current form (going as far as the Fed and IRS). Opportunity to reform finance as a whole and remove legacy waste.
- Fraud detection: money laundering and financial crime becomes very difficult to hide
- Observability: much better data & insight into economic trends
- Security: Infra being controlled by a public org that can be held more accountable than a decentralized mess of private corporations (see endless Equifax leaks, etc)
- Responsiveness: can rapidly implement policy changes in response to crises
Efficiency: judging by the state of healthcare I sincerely doubt the legacy financial system will go away quietly.
Fraud detection: I'd be very concerned about false positives here.
Observability: forcing everyone to opt into a financial panopticon will have unintended consequences.
Security: we really struggle to hold any organization accountable. Public organizations are not magic, was anyone held accountable for solarwinds? The office of personnel management? If anything holding public entities accountable is even more difficult then private entities because of politics.
Responsiveness: The ability will be there, will it be used effectively or responsibly?
Agree on the privacy points, disagree completely on the security aspect. A centralized, government issued digital currency is FAR more secure than a decentralized one. The best security is deterrence: there is no better deterrence than having your security guaranteed by the FBI and the US Army (in the case of international hackers, messing with government systems is an act of war). Also, mistakes and hacks can be reversed -- it's just a central database, so it can be reset.
Good list, and I'd add something crazy sounding to the long list of potential nightmare problems with some kind of future centralized digital currency: forced spending through expiring money.
Keynesian economists that dominate a lot of official politics have a hard-on for viewing consumption as the root of all goodness and prosperity. In the midst of a future economic crisis with a central digital currency, it would be trivial for the politicians to start blaming a lack of spending for the problems and to force people to spend received money within X amount of time or it disappears from your digital wallet and thereby incentivize desired behavior. No real saving for the future possible: citizens would be turned into a cattle-like consumption class.
inflation is literally expiring money. I guess the difference is you could expire some but not all money, but what's to keep me from spending my expiring money on equity or something?
With a central digital currency, they could presumably dictate what kinds of items could be bought and sold.
If their goal was to spur consumption, they could block some types of investment from some or all people at any random time.
We already have different legal classes of investors based on wealth: you effectively need at least 25K in a broker to be able to day-trade, and the requirements to get a designation of accredited investor are even more substantial.
It would make it trivial to assign different rights based on wealth in a digital system and use it to enforce policy.
Your comment ignores the fact that we already have centralized digital transactions and they're all run by private, for-profit entities. I'm just some random dude with no other qualifications than I read the article, but here are my thoughts on your worries.
> complete and utter "financial deplatforming" if you don't behave as a citizen. This is basically China's CCP dream come true.
This problem has nothing to do with having a digital currency, if the government wanted to punish people "if you don't behave as a citizen", it has plenty of tools to do that already. Something like this would be huge government overreach and frankly a violation of the first amendment, I doubt if any law suggested this it would even make it to the supreme court.
Also the current centralized currencies such as PayPal and Banks already do this, if anything this gives deplatformed people more freedom as they have a viable digital alternative to purchase.
> 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
Banks already know this information and the government could audit the banks if it wants to. What's stopping a banker from publishing your purchase history? Many Decentralized currencies would also publicly show this. That said I think it's a totally valid point.
> security nightmare : preventing the leakage of citizen's private financial information.
This is true, hence why JP thinks "It's more important to do this right than to do it fast". As I said before though, banks and private companies already leak this kind of information.
> 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
I don't see how this changes anything. The Fed can already run the money printer to whatever throughput it needs. This doesn't change that. Only thing this changes is that it would be easier to give direct aid to citizens, especially the lowest 5% who don't own bank accounts.
>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
Yeah that's why I kind of think this is a good idea. We already have private versions of this and we could always... Just use those if we don't want to use whatever Powell coin turns out to be. It only gives us more options. Also it would be great to have digital transactions without the $.35 fees
i 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?
Any 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.
There 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.
Well, 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.
CDBCs 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.
I 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.
Can 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.
They are also possible with the instantaneous bank transfer system that exists in Europe. If an employer wanted to pay you once an hour, they could. I’m not sure what the point is, though.
SEPA is often heralded as being that convenient but this isn't complete information.
Basically there is a parallel instant SEPA that is only partially implemented in between certain banks in some countries. Cross border SEPA between two SEPA system countries is much more likely to be just as slow as the US ACH system.
So the only way people could possibly believe this works is if they and their friends use the same banks. Which is basically the case, most Europeans don’t even use the SEPA system to another European country compared to using a few big banks in their single tiny country with their friends and local businesses. But if an outsider wanted to do business in the European banking system, wanting to believe the experience Europeans come on forums to talk about, they likely wont be able to experience it.
Expect 3 - 7 business days and some questions for your banking partners who might not know where the transaction currently is.
SEPA payments are cleared five times a day on every business day. Payment Services Directive establishes that money must be credited to a recipient's account at the latest by the end of the next business day.
On top of that, about a quarter of all banks already support Instant SEPA, which clears immediately 24/7/365.
Its 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.
A national currency would be even more centralized, and centralized banking systems have not been free of problems either. They acted irresponsibly for years and then many got bailed out because they were "too big to fail". And people that society doesn't approve of can get screwed over if the payment processors choose not to do business with them. Moving in the direction of eliminating cash for these people scares me.
Has anyone ever hacked normal central bank vs bank pipes and injected new balances, for example? Or wholesale siphoned off stuff from payment systems? Why would a decentralized system be stronger? Would really more people care to actively monitor it?
Should 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.
It’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
History 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.
Nothing good has happened after central banking was established either. It's been one financial crisis after another.
Also fun fact - back when the US had private currencies, people WILLINGLY preferred to use them despite a gov currency existing. It is only after the government passed high taxes on these currencies(ie having to pay tax for each transaction to exchange them) that they went out of favor. If they were really so terrible, why did the gov feel the need to kill them?
Central banking is nothing but a power grab. The "it stabilizes the baking system" is nothing but a lie.
Fwiw in hindsight it appears that structural regulation like Glass-Steagal is what stabilizes the banking system.
Separating banking, investment banking, and insurance into separate legal entities and preventing the banks from consolidating into mega-banks prevented another a Great Depression for ~70years. Then roughly 8yrs after we repealed all that, we unsurprisingly had another Great Depression level financial crisis.
The Fed’s lending support, along with govt stimulus, prevented the actual depression from happening, so you could argue that the Central Bank does have some impact on banking system stability. But it was only necessary because we removed the structural regulation that had maintained a stable banking system for over half a century.
> Fwiw in hindsight it appears that structural regulation like Glass-Steagal is what stabilizes the banking system.
This is not at all clear.
> Separating banking, investment banking, and insurance into separate legal entities and preventing the banks from consolidating into mega-banks prevented another a Great Depression for ~70years. Then roughly 8yrs after we repealed all that, we unsurprisingly had another Great Depression level financial crisis.
Are we forgetting the inflationary period in the 70s? How the gold standard was lost during this time? All the emerging market crises? How the USD has lost 98% of its value since the 70s? How inequality is sky high due to interest rate suppression causing asset price inflation? How we have a massive trade defect leading to an extremely large negative net-foreign-investment balance? Does it makes sense to you that countries that are much "poorer" than us are lending us money?
> The Fed’s lending support, along with govt stimulus, prevented the actual depression from happening, so you could argue that the Central Bank does have some impact on banking system stability. But it was only necessary because we removed the structural regulation that had maintained a stable banking system for over half a century.
We trade depression for inflation then. Is this good? Bad? Not sure. We are living in that experiment though. One day this excessive debt and money printing will catch up with us. It has happened to every single fiat currency in history.
> Are we forgetting the inflationary period in the 70s? How the gold standard was lost during this time? All the emerging market crises? How the USD has lost 98% of its value since the 70s? How inequality is sky high due to interest rate suppression causing asset price inflation? How we have a massive trade defect leading to an extremely large negative net-foreign-investment balance? Does it makes sense to you that countries that are much "poorer" than us are lending us money
You’re conflating a bunch of unrelated things. The single most economically devastating type of event in a banking system is a credit crisis or credit collapse [1]. That’s what both the Great Depression and the Global Financial Crisis were.
All these other things you reference pale by comparison in the level of harm they can inflict on society. Are they bad? Sure. Are they remotely in the same league of harm as the GD or GFC? No.
The point of structural banking system regulation is to prevent this worst case scenario, not to solve every single problem with the banking system. If you can prevent credit collapses from occurring then you’ve significantly improved the stability of the banking system.
> How we have a massive trade defect leading to an extremely large negative net-foreign-investment balance? Does it makes sense to you that countries that are much "poorer" than us are lending us money?
If you're against this, what you want is more inflation, not less. This is the entirely intentional result of the strong dollar policy.
It's hyperbole referring to how much US dollars stored in a mattress 50 years ago would be worth now. If, instead, you earned money from wages and/or invested in stocks/bonds/real estate/comic books, nothing of the sort happened.
That Wikipedia article seems to talk about company stores a lot, actually.
> […] even in [locations] that were not [poor], workers paid in scrip had little choice but to purchase goods at a company store, as exchange into currency, if even available, would exhaust some of the value via the exchange fee. With this economic monopoly, the employer could place large markups on goods, making workers dependent on the company, thus enforcing employee "loyalty".
The federal government is the worst 'wildcat' bank as it's a wildcat bank who has refused to redeem dollars for the gold they said it was backed by (eventually in '71 totally reneging their obligation), at one point even outlawing private ownership of gold (the item the currency was backed by) and actually intentionally destroy the currency by target of at least 2% each year. A wildcat bank whos notes you are compelled to purchase, at pain of being in violation of tax law.
At least in the old wildcat banks, you had a shot of redeeming for specie if you went out to the sticks where the main branch was.
>Nothing good has happened after central banking was established either. It's been one financial crisis after another.
The US financial crises--terrible as they are--are not even remotely comparable to the damage inflicted by a military coup. Putting these two things in the same category is a nonstarter.
> 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.
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.
> if Jefferson had his way, there wouldn't be much of a military around to plot a coup in the first place
That was the general approach of the United States until ~ the early 20th century. Before that, the 'standing' military was generally tiny, the employer of last resort (criminals, drunks, etc.), and was greatly expanded by volunteers in times of warfare.
> Also, military coups are a problem in many countries, but not the US
Standing armies’ threat to liberty isn't exclusively, or even mostly, via military coup, it's through acting without effective oversight against citizens when employed in a domestic security role, heightened by the separate culture and us-vs- them attitude standing forces create.
And, since the mid-19th century, it's mostly been realized in the US through standing paramilitary police forces rather than an normal standing military, as the former were established as permanent entities before regular standing armies in the US, and displaced regular standing armies from the dangerous domestic role that is the main underpinning of them being in Jefferson’s statement.
> Such a military force would be facing a very well armed citizen-led guerilla response.
As well-armed as the citizenry may be, the military is infinitely more so - they have, you know, tanks and planes and smart bombs - and in this fantasy civil war-esque scenario I don’t think the junta would be shy about exploiting that advantage.
...All of which require extensive logistics to employ that have hitherto been predicated in the Armed Forces not being on the wrong side of the American public's ire. I.e. you can handle hostile logistics in Afghanistan because it isn't that hard to get the raw materials stateside, and move them through Allied supply chains.
Remove the part where it's easy to get things Stateside, and I assure you, a U.S. military coup/junta will be fighting a two sided war as well. Both internal from the populace, and external from former Allies who in no way, shape, or form are going to sit idly by and be threatened by a militaristic U.S. Armed Forces that's even remotely controversial enough to even be considered a coup by the populace.
People forget:
The Army Sabotage Manual is public domain.
The military knows exactly the hell it will be entrenched in if it ever goes against the public's wishes. They literally wrote the book.
In America, it certainly isn't about who you can kill or how fast. Any individual can kill multiple individuals on a micro scale and multiply that every time a weapon kills a soldier or a soldier trades weaponry.
The US military problem would be that it has to subdue a population that has been socialized to resist (to the point that it already birthed paramilitary during the previous democracy) and constitutes the replacements for that military (and the industries necessary for supply) for coming generations. Hell, once it had a democracy the first time, it still went to civil war. Thinking about the short term doesn't get you much.
Predator drones, nukes, etc won't solve the problems that couldnt be solved in a foreign land. Domestically it would be harder and longer fought.
You're missing a giant factor here which is the possibility that the military might ally itself with an existing civilian faction in such a way that only half the country saw the coup as a power grab.
For example, let's say that the military made a deal with <insert the most extreme sub-faction of your least favorite party here>. Then they'd have people to install into the newly vacated positions of civilian economic administration, and in that, they'd have a way to motivate that faction to join them and support their legitimacy.
> The military knows exactly the hell it will be entrenched in if it ever goes against the public's wishes. They literally wrote the book.
The entire public’s wishes, yes. Now consider what would have happened if the military leadership hadn’t resisted the call to join the January 6th insurrection — it’s much easier to imagine something like 90s Serbia where a substantial fraction of the population hopped up on propaganda supports the military efforts and will keep their neighbors from forming an effective resistance.
Yeah, that's a complete fantasy. Since in US society the riot police doesn't come around with tanks and machine guns mowing down protesters, people have created this delusionthat that if they grabbed a couple of hundred M4s they could take on a government with a full blown army, and that when the shit hit the fan that army would still choose to fight with just shields and batons. There is a clip from the January invasion where a woman is fleeing the scene crying, because of the a 'violent' response from the police. I even think she just got pepper-sprayed (can't remember exactly). When asked what was she doing there, she said she went there to start a revolution.
There's a passage in a book (can't remember now either) about the Mexican revolution, where a man hopped on a donkey and left his tiny village to join the armed struggle. About 5 miles from a conflict site, he heard the boom of a cannon going off. He stopped, turned the donkey 180 degrees and went back to his village.
That's a weird argument. Yes, obviously the US government can win any engagement against anyone, including its own civilians, by nuking them at any time. Clearly there is additional nuance to this argument since the US didn't just nuke the Vietnamese, Iraqis, or Jan 6 protesters from the get-go.
I haven't seen any real-world evidence that high levels of individual firearm ownership correlate with the preservation of liberty and democracy. Most examples people like to bring out are resistance to a foreign occupation, typically with external assistance from a real military and/or shipments of military arms. And, perhaps tellingly, the result after the occupiers leave is rarely democracy.
Meanwhile improvised bombs seem to be far more important to and effective for a modern insurgency than firearms.
Add in that it sure seems to be more common to read about private militias aiding an authoritarian coup than successfully resisting it and I think the pro-widespread-individual-firearm-ownership faction has an uphill battle just to demonstrate that the practice is a wash, let alone beneficial to the preservation of liberty and democracy.
There are a few cases of private arms being used in anti-corruption "wars" or stand-offs in the US, but at least as many in which they're used for essentially the opposite purpose (supporting anti-liberty, and especially racist, policies and actions). In any case, the national guard stepping in tends to end these in a hurry.
The notion that the 2nd amendment is vital to the preservation of liberty and democracy in 2022 seems to be dubious at best. I'm not in favor of a blanket gun ban but I think that particular argument in favor of gun rights—which seems to be what anti-gun-regulation folks fall back on very quickly, when challenged, which makes sense as it's the reason given in founders' writings and, arguably, in the constitution—is, at best, pretty weak.
And that totally discounts the self defense the Kurdish people engaged in? You're grasping at straws here.
>US military is occupying
US military has presence and has engaged in (importantly) air support, but to call it "occupying" all the Kurdish territory is an intentional I think misrepresentation. It's hilarious that anyone would call it "occupying" when the boots on the ground were minimal to almost non-existent. I really don't need to go off these ignorant statements when I bore witness to what was happening with my own eyes, but I'm sure you know more from whatever you read on the internet.
You implied that Syrian Kurds exemplify how effective armed civilians can be, I pointed out how that is nonsense because they are being backed operationally by the most powerful military on the planet.
>You implied that Syrian Kurds exemplify how effective armed civilians can be
Yes, [ although I suppose technically they are maybe not civilians once they pick up arms in a war. ]
> I pointed out how that is nonsense because they are being backed operationally by the most powerful military on the planet.
You have no fucking idea what you're talking about, and I have the memory burned in of many now dead faces in my mind of those who died with almost no "backed operationally" presence by the US. Imagine literally being told by some dude on the internet that my personal experience defending Kurds from ISIS is wrong because he thinks based on what he read on the internet that we were 'occupied' by the US. You can say whatever you like, I'm sure it will stroke your own ego to believe that.
I can recall sitting in a border town with literal children one building over sleeping with guns, hoping they would survive. A month later I found out several of them were dead. I personally viewed this town and there was not a single US soldier there, barely enough provisions to survive, and those defending themselves had essentially no US weapons.
The effort of the Kurds fighting Syrian government and ISIS is critical to their defense; the US contribution standing on its own is completely incapable of maintaining Kurdish Syria. The boots on the ground is by far Kurds (not part of Syrian gov) themselves, with arms largely either coming from those privately stashed or brought in via militia. In a number of attacks on Kurdish territory such as in Kobani, essentially anyone with arms engaged in defense with whatever they had.
>Such a military force would be facing a very well armed citizen-led guerilla response.
Unless enough citizens were on the side of the coup. I don't know why no one ever seems to acknowledge that as a possibility, especially after Jan. 6. Gun owners are just as driven by politics and ideology as anyone else.
Plus just because you have a gun in a safe and maybe sometimes shoot watermelons in the backyard with it doesn't mean you'll be effective in guerilla warfare against an actual military. I know Americans like to bring up Afghanistan and Vietnam as examples of guerilla warfare succeeding against the US, but fighters in both cases still went through training that would break the average American gun owner.
The flip side is that many people in the military would absolutely sabotage the coup. Keep in mind that everyone in the military is bound by an oath to defend the Constitution from enemies foreign and domestic.
Purely anecdotal, but from discussion with my military friends there is widespread belief more than half of enlisted soldiers would've supported the Jan 6th coup attempt militarily. That percentage is far smaller along officers. With two exceptions though the people telling me this are officers and that will slant their view.
I actually think both will be stacking sats. Hamilton was a practical libertarian, Jefferson was “we must have a revolution every now and then to show the government who is boss” libertarian.
The 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.
There are different classes of blockchains. For example, the data structure managed by `git` is a blockchain. So, in and of themselves, blockchains are not problematic. When you raise those criticisms you probably meant to address the security function of the consensus mechanism for distributed decentralized ledgers. The security function there is crazy not because the people are evil scammers and con artists, but because Byzantine Fault Tolerance [1] is a hard CS problem, like AI.
Tiered systems for central bank digital currencies that allow complete tracking of all transactions are an active area of interest by central banks. For instance, the PBoC has filed over 80 patents on the subject. You can be sure that these systems don't attempt to solve BFT, don't use as much electricity, and don't protect the peasants from the abuses of the rulers.
That's exactly what a blockchain is. Blockchain being the "secret sauce" has always been a misconception; as noted git is exactly a blockchain. What we call refs in git are blocks in Bitcoin.
Nakamoto consensus was the innovation, the major energy consumer, and not necessary for cryptographic data integrity like a CBDC or git repo needs.
I 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.
There’s a fair amount of confusion around that term, however: for example, Bitcoin proponents spent most of a decade saying that only proof-of-waste systems were true blockchains because they knew that anyone picking a different mechanism would have much better performance and cost numbers.
> We have real world data that shows us this only leads to wasted electricity
You are either ill-informed and should educate yourself on the subject (blockchain != proof of work-based consensus) or willingly creating confusion by mixing up concepts.
You're correct that I'm not an expert in the terminology used in this field. Surely I'm not the only one who hears "blockchain" and thinks it must be like Bitcoin and other proof of work crypto currencies?
Maybe the summary is saying something completely different, in which case the use of 'blockchain' within it can still concern me and any other readers who are similarly wrongly informed.
I'm not sure if you are saying this to agree or disagree with me but it's worth noting that you are making the same mistake as the parent. in the article you posted, the thing being created is not a block chain, it's a single proof of work solution.
