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Comment by tom_mellior | Hacker News Reader

I love this part:

> Estonia’s only currency is the euro and this is an essential feature of our EU membership, which we are proud to have. No one here is interested in changing that.

OK, great. Next sentence:

> That’s why we have always referred to estcoin as a proposed ‘crypto token’.

(top highlight!) Wow, clever! It's not a currency! Oppressive EU regulations (that we agree with and are not interested in changing) have been obeyed. Next sentence:

> Governments do need to consider the disruptive impact of how crypto tokens can be used as currency

Hahaha. Sorry, but this "we're launching a currency that we don't call a currency but that everybody, including us, knows is meant to be a currency <wink>" is ridiculous.

All that said, I think issuing some sort of government-backed currency might be one way of experimenting with implementing a universal basic income, in order to combat poverty among your citizens. But I don't see that discussed in the article.

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> All that said, I think issuing some sort of government-backed currency might be one way of experimenting with implementing a universal basic income, in order to combat poverty among your citizens. But I don't see that discussed in the article.

It's funny, because we already have a "government-backed currency" but we prefer to bail-out the banks instead of bailing-out individual in distress... I mean: it's not a problem of technology, it's the lack of political will. Crypto-currencies are not different from any other type of currency in this respect. I don't see why they are better fitted to implement a Universal Basic Income. I perhaps see reasons why they are worse than actual money (technological divide, lack of acceptance in shops, difficult to understand).

Actually one good thing would be if there is a real technological divide unemployed people would be forced to become better with tech to claim their welfare, which in turn increases their chances to find jobs. Disabled or old people should not be left out because of this and should be handled in a way.

> It's funny, because we already have a "government-backed currency" but we prefer to bail-out the banks instead of bailing-out individual in distress...

What, exactly, does “bailing out individuals in distress” comprise?

I would imagine the standard social safety net: food, unemployment insurance, parental leave, and so on.

because catastrophic bank failures effect every one

That would be if you let the bank go bankrupt but instead compensate the individual depositors up to a certain limit. That won't leave anyone in distress although it will decimate the savings for quite a few people who had a lot of them.

The main reason not to do this is because that would usually mean severe distress for many employers whose working capital would be lost and day-to-day business disrupted, possibly (especially during an economic downturn) bankrupting them; causing a ripple throughout the economy as a major bank going down takes down also many unrelated companies, their employees, their suppliers, etc, and possibly toppling the next weaker bank(s) as well.

I agree. The point is, they might not have the funds or the "political will", as you say, to implement a UBI in Euros. They cannot print Euros. But if they can issue "tokens" out of thin air and encourage network effects that lead to some acceptance in shops etc., that might be a different way to go.

good point.

It's a problem of god-knows-what. You can talk to a lot of people that have clear opinions on bank failures, bank runs, inflation and such. I'm not one of them. Bank runs have been happening since the neolithic. The money is always made up, usually it's debt. Even gold inflates, when banks start issuing loans. Sometimes it crashes. I think it's something we just don't quite understand.

Cryptos are good for reasons other than whatever macroeconomic theory is built into bitcoin. They're digital. That's useful. The digital economy needs better ways of moving around money. At present, if you want to run a digital "market" where money goes in and out it must be "thick". Chargebacks, fraud & transaction costs will add up to 5%. That means thin or fast are not options. For thin and/or fast (eg online securities trading or currencies), they need to already have all your money or trust that you'll pay. That's why you need an account with a brokerage. In other words, there is no digital cash.

How do you build a patreon without a "man-in-the-middle?" Can Estcoin do it? How do you trade currencies without some random institution holding your money. How do you do micropayments.

I think we need a separate bitcoin for building stuff on, away from the crazy currency trading. Government backed seems like a good way to go. I'd even recommend a central bank, just call it something less scary.

Edit: I don't get the downvotes. If people like the bitcoin "macroeconomic theory," that's great. You have bitcoin. Why can't we have 2?

> I think it's something we just don't quite understand.

There was a period of relative calm between the instantiation of post-1929-crash banking regulations and the repeal of Glass-Steagall (Gramm-Leach-Bliley) and the deregulation of derivatives (CFMA) in the late 90's/early 2000's. Perhaps finance is better understood than is recognized.

I have a dim view of the repeal of Glass-Steagall, but it had little to do with sub-prime lending, CDO, et. al. The 2008 crash was because of shoddy lending underwriting, mass speculation in real estate, and some fraud like collateralization. The economy didn't fall over because banks were dealing in both retail banking and investment banking. I mean I could be wrong in my assessment, but I think I remember it well enough.

The truth is that crashes are cyclical... for reasons that are poorly understood. There are probably ways to manipulate cycles, but eventually human psychology takes over and people start acting irrationally en masse. What we can do, I think, is focus on how we respond to down turns.

Richard Bookstaber's arguments in 'Demon of Our Own Design' for how to reduce the frequency and severity of systemic financial crashes can be oversimplified to loosening the coupling between systems, and reducing the complexity of systems. The natural incentives of financial firms are toward coupling that they can profit from and complexity that they can charge for. Alan Greenspan eventually figured out that letting the firms police themselves probably isn't actually a good idea [0]. I may have targeted the wrong top two deregulatory initiatives, but I'm pretty confident that removing and failing to enforce existing regulations was a significant contributor to the crisis. It's not that we don't know how to avoid crashes, it's that it is less profitable (for some) to do so.

[0] https://www.theguardian.com/business/2008/oct/24/economics-c...

I don't disagree with the sentiment, just with the assertion about the particular piece of regulation.

GS was a bad example anyway; my main point was that we achieved financial system stability for a long period, correlated with financial system regulation.

I mean, there was a huge slump in the 70s with the oil crisis and other factors leading to stagflation. https://www.investopedia.com/articles/economics/08/1970-stag...

Sensible regulation will buy us a lot, but you can't prevent people from doing big stupid things forever.

> […] my main point was that we achieved financial system stability for a long period […]

What period was that, exactly?

For the US, approximately 1930-2000. Have a look at the 20th century list of financial crises on Wikipedia [0], and filter for US banking.

[0] https://en.wikipedia.org/wiki/List_of_economic_crises

Auroracoin was kind of an attempt at this, though it stopped distributions.

Estonia seems to have an interesting take on change generally, the policies (that I hear of, which is few) seem to generally have a light hearted tone. Estcoin is not a threat to the eurozone, so let's not make a big deal of it.

When 10,000 people get their salaries in it, then we can talk about EU-level issues. Meanwhile, let em play.

I'm generally pro-eurozone and I have no problems with this. If they figure something good out, they can share with the rest of us. Ideas like this are not going to come out of Brussels.

Go Estonia!

Estonia is awesome.

An extremely poor country outside Tallin (according to a single documentary I've watched), they went tech to try to thrive as a country.

Takes some balls, it's either that or tax heaven (which is something I think _my_ country--Italy--should do), they went the hardcore route.

The article goes on

> However, crypto tokens have far more significance than their > use as a currency and don’t necessarily fall into that category. >From Estonia’s perspective, estcoins were proposed as a way to raise money and support for the development of our digital nation from more people around the world. We would also want to structure the tokens so that they help build our e-resident community and incentivise our own key objective, which is to increase the number of companies started in Estonia through e-Residency.

Don't just take the things you want to hear out of context from the original meaning. Founding more Start Ups in Estonia is a valid use case. It's also a way to fight poverty.

as a way to raise money and support for the development of our digital nation from more people around the world

But ultimately denominated in Euros, right? Otherwise this is just "yet another crypto currency".

I'm pretty sure the country wouldn't be allowed otherwise, to set up a parallel economy with its own exchequer besides the ECB?

OP isn't saying that estcoins won't have any valid use cases and therefore are a bad idea - they even say that estcoin could be used in a UBI experiment.

OP argues that Estonia is a member of the EU, and is therefore bound to use the Euro and only the Euro as its national currency. It seems a bit sneaky and underhanded then to launch this cryptoCURRENCY as a "token" rather than a currency.

As someone mentioned further down, estonia probably won't make estcoin a legal tender (can't be forced to accept estcoin to settle all debts in court or pay taxes), avoiding the issue of competing directly with the euro while still allowing the government to play with this new tech.

As long as Estonia is backing Estcoins with Euro reserves there shouldn't be an issue.

>Estonia is a member of the EU, and is therefore bound to use the Euro and only the Euro as its national currency

Just a nitpick, this statement isn't quite true.

>Nine countries (Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania, Sweden, and the United Kingdom) are EU members but do not use the euro. [1]

The term you are looking for is the Eurozone rather than the EU.

[1] https://en.wikipedia.org/wiki/Eurozone#Future_enlargement

> Denmark and the United Kingdom obtained special opt-outs [...] The other seven countries are obliged to adopt the euro in future, although the EU has so far not tried to enforce any time plan. They should join as soon as they fulfil the convergence criteria

I won't provide a separate source for this statement since it's the same as yours, just a few sentences further down.

For sure. And one notable exception to this is Sweden (sort of). While they are in ERMII - and are obligated to join as soon as they meet the criteria - they are intentionally avoiding meeting the criteria as a means of staying out of the eurozone.

Hahaha. Sorry, but this "we're launching a currency that we don't call a currency but that everybody, including us, knows is meant to be a currency <wink>" is ridiculous.

Why is it ridiculous for a small EU nation to pay lip service to EU regulations with regard to this financial experiment? What would be a better way to do what they're doing?

Pay actual service to EU regulations? Follow their treaty obligations, or renegotiate the treaty?

They admit in the article that it’s a solution looking for a problem, which is a good strategy for creating problems for no reason.

How do you think issuing a "crypto token" is legally different from the government issuing you a check which it's going to exchange at face value for Euros, which all governments in the Eurozone can do today?

Governments can issue all the “crypto tokens” they want, whereas they have to borrow Euros.

That being said, if a token has a central issuer, there’s no need to use any form of blockchain technology — digital signatures alone will suffice (add Chaumian blinding to make it more cash-like).

The government doesn't need to immediately borrow 1 EUR or have it on hand write you a check for 1 EUR, so the comparison holds.

They actually do, governments don't have the power to issue euros, only ECB does.

Every EUR the government hands you (in EU not by a check, that's stone age, but on your account) is directly, immediately covered from their reserves (usually within 'their' central bank, who also can't issue new euros) or borrowed from someone, possibly the ECB.

Interesting.

TIL of Chaumian e-cash and blind signatures.

[0] Chaumian e-cash:

https://bitcoin.stackexchange.com/questions/9544/how-does-ch...

[1] Blind signature:

https://en.wikipedia.org/wiki/Blind_signature

Presumably Estonia is not planning to make Estcoins into legal tender for taxes and debts.

That would be good.

My opinion how digital money should be used for debt-free tax-free money to pay e.g. a UBI: http://lustysociety.org/umi.html

This trend of lazily posting a link to your personal blog instead of discussing something on a discussion forum needs to die a swift death. And I don't want to turn this personal because you're the hundredth person I've seen do this, but why should anyone here care what you in particular have to say about crypto, UBI, or anything else? All we see is a username and that you've been downvoted below 0. Short of remembering your username, there is zero notion of credibility to "here's my thoughts on the subject! [link]"

Why this hostility for a link ?

If you had visited the web page you would know that the content was quite long for a comment and the formatting would disappear.

If you were an academic or a regular internet user, you would know about the virtue of references.

You are free to discuss the topic.

At least I know why I was downvoted instead of getting a sensible reply. Thanks for that explanation.

I don't have hostility for links, I've upvoted and enjoyed comments where the poster expands on a subject or provides the basis for their opinion with a link to supporting/additional information. That's a reference. It's the laziness of a comment that is entirely or almost entirely "Here's my thoughts: [link]" that closely approximates some sort of pseudo-blogspam traffic generation technique.

Honestly this argument is no different than the “why is this non tech related article on hacker news when all that should be posted is tech stories” that pops up constantly on Hacker News.

It stems from you wanting everyone to use the website the way you want them to instead of the way they want to. In the example instance the powers that Be have explicitly stated it’s okay but as far as i know have not commented on the behavior in question.

You can check my comment history to see i never post links but I also have no issue with the behavior. The person has put a lot of effort (compared to a forum post) discussing their take on a topic and decided it’d relevant and of interest to the discussion at hand.

If you don’t want to digest information that way it’s easy to ignore it and engage only on site commenters. For those of us who like in depth analysis that can’t be conveyed in a short forum discussion will click through and continue the discussion after.

Where is the discussion on HN if any meaningful percentage of the comments are just folks posting links at each other? I have no question that the linked blog post took effort and contains information difficult or impossible for format for HN. If the powers that be wanted people responding with charts and graphs and well-formatted text, they certainly haven't done a good job at providing those tools.

I enjoy reading through linked blog posts (both in the submissions and comments) but as I commented elsewhere in this thread its the laziness of not engaging at all and simply throwing out a link to your personal blog that bothers me. I may very well be in the minority.

> Oppressive EU regulations

You do realize that Estonia, just like any other EU country, is part of the leglisative body that creates those rules and regulations?

Being a part of it doesn't really mean that you agree with it, especially in a democracy.

Parent chose to use "oppression" - that's one step above disagreeing.

Also in the context of present-day Europe, with a lot of successful extreme right eurosceptic parties, the term "oppression" associated to Europe rules is a lot more politically loaded. A bit like "Democrat" in the US does not simply mean someone that likes democracy.

That part was tounge-in-cheek, as should be clear from the parenthetical remark that follows it. Sorry for confusing your sarcasm detector.

(Also, like a sibling wrote, being part of a decision process doesn't mean that you ultimately agree with all majority decisions, but whatever.)

A regulation can be oppressive even if you had a vote in forming the regulation. The two are only marginally connected to each other.

"Democracy is the idea that the people know what they want and deserve to get it good and hard."

So I guess you didn't read the part of the article where they actually bring out 3 possible token concepts.

One of them is not even tradeable and another would be pegged to Euro. The third one (community estcoin) is more like your typical token but even then, I would be quite surprised if EU would actually put the brakes on the ICO.

What if they make a general effort to keep the value 1:1 with Euro?

For example, instead of mining, what if only Estonia could generate estcoin? What if Estonia only sold them via Euro, and promised to pay Euro on a 1:1 basis to anyone who sold them back to Estonia?

The supply of Euro is managed by the ECB as owner of the monetary policy in Eurozone; with puppyrticipation of the Estonian central bank I assume. Any mechanics of the nature you describe could be employed as alternative means to manage Euro supply in the market.

I think this quote is more telling (about a previous viral article months ago using the non-existent "estcoin" to promote E-Residency), since it's exactly what I thought even before clicking the link:

    Many people [...] wondered if the whole thing was nothing
    more than a marketing stunt for the e-Residency programme.

I don't think I've ever read an opinion of Estonian E-Residency from an independent party (ie, someone who wasn't involved in it, promoting it every chance they get) that didn't write it off as hype. This article looks like just more of the same.

I am giving 2 more years before everybody gets out of EU. European countries are realizing the long-term implications of EU regulations. Britain got out of EU just in time. EU's fixation on austerity will not bode well for long-term economic growth. Germany's interests are in conflict with other EU countries. Positions on Energy, Immigration, Refugees, Foreign policy keep changing depending on who you are listening to.

Can any Europeans here chime in with their perspective?

Britain hasn't actually "gotten out". That won't happen until March 2019 de jure, and probably two years later in real terms, since everything is pointing at an interim period where Britain will remain in the single market with all its features, except their voting rights.

The Brutish government is currently getting raked over the coals in negotiations, which serves as an almost daily reminder of the EU's value for member states. Escaping the terrible oppression that is the European Court of Justice, which I just now failed to find any controversial judgement for, appears to be acceptable after all, if it allows your airlines, banks, and software companies to freely do business in the world's largest economic area. Who woulda thunk?

Brexit has also had a unifying influence on the rest of the EU: Surveys show trust in the EU at a 10-year high. Almost more importantly, trust in the EU has for 20+ years been higher than trust in the respective national governments and parliaments. See http://ec.europa.eu/commfrontoffice/publicopinion/index.cfm/... (page 15).

With the elections in France, the Netherlands, the UK, and Germany, anti-EU populism has arguably shown to have passed its peak–a President Trump actually being rather helpful in this regard, thx.

I don't think it's quite a "have your cake and eat it" scenario. I think there should be sufficient leeway for a cryptographic value-exchange medium that is ultimately backed by the Euro?

It is an interesting play with words but of course the European policy makers would have to have the last say, and of course it would have to abide by European regulations. As long as it does, how could they possibly have a problem with it?

Reminds me of the QZ article where the Chinese bitcoin miners all swear they're only interested in blockchain as a technology, not as store of value. Suuuuuure.

A government backed cryptocurrency based on a decentralised blockchain. There might be a reason this isn’t discussed in the article.

> Hahaha.

The EU is shifting. Not everyone loves todays German-ruled course of things (I'm German). This is especially true for the corridor between Baltic Sea and say Austria. These countries - Estonia as a very small one, in particular - have still to take care in how they express themselves in regard to sensible topics. Don't confuse this with non-dedication.

It's not just ridiculous, but brilliant. The new German empire is most likely too fragile and legalistic to apply currency regulations to this.

Every definition of the term "legalistic" that I find seems to be something like "intent on upholding the law". So... you're contradicting yourself?

What's the new German empire ? Today's Germany territory or the "Germanic" nations ? (or something else)

I bet 1 Estcoin that he was saying Europe is being controlled by Germany.

EU = German empire

Oh you mean along the lines of

World = US empire

Oh you mean along the lines of

Some highly generalized social group = perceived leader of previously mentioned social group.

CAPTCHA passed

"World" is neither a political nor an economic union.

I think the thing you have to remember about Germany, is that it's one of the top 5 exporting nations in the world up there with China, the US, Japan ...

It's only as a matter of course that in any economic union such a force would have significant heft.

Anyone that isn't happy with that can and should improve their export game.

The german export surplus has been criticized in the past for damaging the economy of other countries (esp. in the EU). It is not possible for every country to copy this system because someone has to import all the stuff you are exporting.

I agree with this to a point, as an occupant of a peripheral nation. In particular how the depressed Euro helps them out because it reduces the cost of their exports.

But, you simply can't argue with German productivity! Or the general quality of the goods they produce, and when it comes to getting good value groceries around Europe again it's the German supermarkets that are leading the way.

There is a problem to solve with regards to how German economic activity is balanced with the social needs of the European area. My personal bug bear is how the peripheral nations are expected to foot the bill of maintaining the periphery themselves, while Germany sits cosily in the centre printing Euros for herself.

But at the foot of Germany's success is doubtless her ability to manage her economy better than most, investment in education and to her fostering and nurturing of talent both home grown and from abroad.

'...when it comes to getting good value groceries around Europe again it's the German supermarkets that are leading the way.'

By producing cheap copies of established branded goods?

Not quite. They sell quite a number of branded goods, including a large amount of stuff sourced from the local economy. But anyway, selling unbranded equivalents is pretty much standard across the industry. What knockoffs they do provide are typically of a fairly high standard.

No I just think that it's all down to the fact that they're better at business.

The weakest of these German chains is in my opinion Lidl, but I'd prefer to go there than the Tesco I have around the corner any day!

'No I just think that it's all down to the fact that they're better at business.

The weakest of these German chains is in my opinion Lidl, but I'd prefer to go there than the Tesco I have around the corner any day!'

I agree the German supermarkets seem to have better management, that which is visible at shop floor level anyway, for sure.

I don't like Aldi and Lidl because the checkout process is so rushed and chaotic. Obviously, some people don't mind and see it as a fair trade-off?

As Noel fielding would say “Asda for day to day and Mark’s for the bits”!

> I don't like Aldi and Lidl because the checkout process is so rushed and chaotic. Obviously, some people don't mind and see it as a fair trade-off?

I don't like rushed for the weekend food shopping. Monday - Friday 12 o'clock shopping needs to be rushed though and since you don't have much, I prefer Aldi before REWE. Especially because it's cheaper too.

I think there are some misconceptions about the state of the german economy/society. The development has actually been quite worrying over the past 20 years. More and more people are receiving social welfare despite working full time and poverty rates are rising. There is also a shortage of skilled workers which is not easily compensated with foreign workers due to the lack of a proper immigration system. With the current development in the car market (think VW) which is still one the power horses of the german economy and the lack of german electric cars its hard to say where the german economy really stands.

All that is true, and it's the consequence of internal devaluation through austerity.

It's fascinating to see how that is sold to the population, in the middle of an export boom, and very low inflation.

I wouldn’t say it’s so much sold, as rammed down our throats!

Yes, but many of these issues can speak to the European economy as a whole, maybe even “the west”. I’m speaking comaparatively though. Perhaps unemployment is an issue right now but the quality of the social safety net in Germany should take the sting out of that!

Another post on the front page notes that BMW sold 100,000 “electrified” vehicles (of which ¼ were 100% BEV) in 2017. The s-curve on electric vehicle adoption has barely started to rise and will take 20+ years to complete. German manufacturers’ market timing is far from being proven wrong.

The good news is that in theory both the importer and the exporter profit from that relation. Otherwise said relation wouldn't exist.

The exporter gains the capital the importer "loses". This is fine as long as there is a balance between import and export. Once the balance is off there is a problem for the importer.

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