[cslarson]

This really misses the picture of what's going on. Fedcoin could be coordinated by the federal but live on or be connected to a public smart contract platform where that, now digitised asset, could be used programmatically and interdependently with many other systems in a much more efficient and easy to assemble way than can now be done. This may not sound like a good idea to most on hn but it's at least new.

[geofft]

Smart contracts are cool, but I don't think smart contracts and blockchain are the same technology. (Indeed, Bitcoin does not meaningfully support smart contracts, so we should use different words because they're different concepts.)

It's certainly possible to implement centralized, non-proof-of-work smart contracts: publicly send the Fed's API a Lua script. Whenever the Fed changes their ledger, they run your Lua script in a sandbox with limited CPU, see if it outputs any transactions, and processes them. Anyone can run the Lua script themselves and see if the Fed was trustworthy - but if the Fed chooses not to run your script, well, that's just a centralized bank doing its centralized thing, tough luck.

If you want to not put your reliance on a centralized bank to run your script, then you've got to use a distributed consensus platform. Even if you had something Ethereum-like that the Fed simply oversaw, they could just refuse blocks they don't like (and in fact they'd essentially have to to have any meaningful control of the currency at all), so all the complexity of gas and proof-of-work isn't buying you anything.

Relatedly, and along the lines of what 'patio11 was saying: you can implement smart contracts for a centralized currency today. A startup that had its own API for opening accounts, sending it USD, and running publicly-visible Lua scripts would be a straightforward thing to build, and if that startup ran for enough time, you'd gain (centralized) trust in it doing its thing.

[dnomad]

Again, there are perfectly fine and very useful blockchains that do not provide any kind of trustlessness. See corda.net. This insistence that a blockchain cannot be permissioned is not accepted by most people. It's silly to keep insisting a word means some restrictive value of X when a great many people do not use it as such. A FedCoin could be highly centralized and still provide enormous value as a trustworthy, distributed database.

[comboy]

The Fed can create unlimited money out of nowhere and doesn't have to answer questions about it from anybody. I don't think they dream is a transparent blockchain and money supply limited by an algorithm.

[zerostar07]

They don't want to be seen as "not having to answer to anyone" , so they would be going the blockchain rule, i.e. semi-accountability , i.e. stealing some of bitcoin's "decentralized" fame.

[lukeschlather]

The whole point of having a national currency is that the money administrators answer to Congress, not the businesses who borrow and lend money. "Decentralization" means taking power away from Congress and giving it to Goldman Sachs and the other big banks.

[_red]

The Fed is a private entity which is owned by its "Member Banks" (ie. big banks).

https://en.wikipedia.org/wiki/Federal_Reserve_System#Member_...

Moreover, the currency that the Fed issues is not technically a "national currency", its "Federal Reserve Notes", that is a debt instrument which is theoretically backed by "US Dollars". Where are these US Dollars?..and more importantly how do we get some?

[geofft]

It is not "owned" except in a weird metaphorical sense, and moreover, big banks are obligated to own an exact amount of shares - no more and no less, and they may not sell them - by act of Congress. If you scroll a little bit up from your link: "the 'ownership" of the Reserve Banks by the commercial banks is symbolic; they do not exercise the proprietary control associated with the concept of ownership nor share, beyond the statutory dividend, in Reserve Bank 'profits.'"

A "US Dollar" is a unit of measurement; a "Federal Reserve Note" is a physical object. You can no more own a US dollar than you can own an acre or a joule, but you can certainly own land or a battery. Casting doubt on the US dollar because you can't touch it makes as much sense as casting doubt on meters or Bitcoins or Goldman Sachs because you can't touch them either. They're all social constructs, but social constructs are quite real for anyone participating in the society that constructed them.

[Yizahi]

> create unlimited money out of nowhere and doesn't have to answer questions about it from anybody

So, Tether?

[loceng]

Would it have an incentivized structure?