Topic: Blockchain and Economists - page 2. (Read 293 times)

I was talking about the country Dominica. The hurricane in 2017 destroyed that island. Over 200% of GDP in damages. To get the farms going again, they applied for a $10 million loan. Those small countries don't have insurance. In relation to banking services I agree. I remember back 20 years ago where a branch manager of a bank could decide things. These days it is all controlled through central offices. Branches just fill out forms. All those procedures can be replaced by smart contracts. And finally credit loans: yes, although I am hopefull. Banks are for-profit and therefore have different objectives than governments.

The cost itself might not deter the government, if the savings are immediate and certain.
Proponents of implementing such a move could easily make the argument - Size of shadow economy is X, you will eliminate Y% of it, leading to increased tax revenues. When weighed against the cost of implementing such a project, it would seem like the savings are enormous.

The US government can easily find competent firms to set up the IT systems. It is just that they chose to mess it up.

All the advanteges that you are talking about can be conducted by a government-owned bank.
I don`t think that the government is obligated to help farmers to rebuild their farms after a disaster.That`s why insurance companies exist.
Credit loans realized by the government?This is a pretty old idea and it isn`t working.
The blockchain and smart contracts still can`t replace banking services,but I`m sure that they will,in the not so distant future.

It definitely will. And not necessary in a positive way. Governments all over the world are trying to eliminate cash and shift residents to e-money (whether blockchain or bank-based). The motives behind these are simple
- Increased surveillance over what you do
- No leakage of tax revenues
- Implementation of policies like negative interest rate or demonetization

This is actually the diametric opposite of what decentralized cryptocurrencies like Bitcoin set out to achieve.

I don't think government issued crypto will necessarily become a reality anytime soon.

The last time the united states rolled out an IT product, it was the US healthcare website, I think after the Affordable Care Act (see: "Obamacare") was passed. The website alone cost $1 billion dollars in taxpayer funding and did not work properly. I don't know if governments are well suited towards producing IT products in an efficient and cost effective manner to the public.

Also with 100% of the budget accounted for and additional borrowing often being necessary to fund the federal government's current programs, it is possible that projects like government issued crypto could not become a reality without tax hikes funding them. At the moment there is a lot of competition for programs funded by tax hikes. There is universal healthcare which some would gladly accept tax hikes for. That are future defense plans for things like robotic submarines and assorted weaponry which are unfunded. The F-35 program is still uncompleted and future cost overruns are likely. Fitting yet another unfunded project in somewhere, may not be so easy.


Bolded: 100%.

It does seem as if many of the economists and experts who comment on bitcoin and crypto currencies do not know much about them or understand what they bring to the table. At least that's the impression I get.

Recently I was interviewed by a well-known economics journalist…. and I was surprised.

The background: I am the CEO of a company that is going to implement blockchain technologies in small countries. The process will start by upgrading the local fiat currency to a blockchain based cryptocurrency, accompanied by tools like transfer, exchange, taxes, KYC, AML, reporting…

A currency as a cryptocurrency has many advantages and will — from my point of view — change economics fundamentally.

· Simple example: such a currency allows a government to help bypass restrictions like the lack of correspondent banks.

· More complex example: such a currency allows a government to directly work together with the population. For example, it is possible for the government to submit debit cards to farmers, so they can rebuild their farms after a disaster; without any banks involved (and within days).

These are just examples. Many other possibilities exist.

Government issued wallets on a government blockchain will be here rather sooner than later. Smart contracts will enable a much closer relationship between government and their population. In my above-mentioned example, a government does not even need to issue debit cards. They can select vendors that carry specific products/services and then tell the farmers what products/services they have been allocated to and where they can get them. The process can be fully automated and is transparent. The money transfer is done in the background.

Or what about credit loans for housing projects, or business startup loans to boost sectors of the economy. Operations that are traditionally embedded in banks / credit unions, but in future can be realized directly by governments?

The local currency as a new reserve currency asset that is equity based and a 100% reserve (like in your hands) will bring more stability to the fiat currency and to fractional reserve banking. If implemented correctly.

Here is the problem: traditional economists like the one that interviewed me, don’t take crypto serious “Sir, I covered the IMF and World Bank. I am an economist. Your idea will not work”. I rate him as a highly professional journalist and I was honored he contacted me. But these old-school economists must realize the earth is not any longer flat.