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Comment by hahaxdxd123 | Hacker News Reader

Money is definitely digital already, but I think the important aspects of this are the various implications of the central banks adopting modern tech.

Take China's e-yuan:

1) You directly have an account at the central bank and spend from it through an app

2) Central bankers can trivially apply stimulus instantly (no fuss about the $1200 like we had)

3) You can do crazy shit in times of recession like money that expires unless you spend it on goods in order to increase the velocity of money

4) Money laundering would be pretty hard.

5) Being able to easily build fintech products on top of it, instead of depending on dumb solutions like Plaid.

This sort of thing would be gamechanging IMO.

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>You can do crazy shit in times of recession like money that expires unless you spend it on goods in order to increase the velocity of money

This in particular sounds like a fantastic idea.

One of the more out-there leftist ideas I've heard proposed is a monetary system where everyone gets a basic income but all personal bank accounts have a negative interest rate, to disincentivize accumulating wealth for wealth's sake. This seems like a simpler and more reasonable version of that.

Expiring money sounds hard to enforce. It clearly wouldn't expire after it was spent or transferred. So how do you guarantee that it is spent/transferred to something that isn't a savings vehicle?

Wouldn’t a ledger be a path to solving this?

Hyperinflation basically achieves this.

> Hyperinflation basically achieves this.

I don't think so. I think the idea they want the money to lose its value only if someone hoards it. If it's spent quickly enough, it retains its full value now and in the future. That's not how hyperinflation works.

Hyperinflation is an economy wide collapse in production though.

If every human in the nation lost trust in the currency but there was enough production capacity to feed everyone then exports would rise until the currency appreciates to normal levels again. However, most nations suffering from hyperinflation don't have enough products to export in the first place.

I suppose you pay it as taxes, or banks pay it as interest to the central bank. It does seem odd though.

Of course the money would flow to safe havens an accumulate there. Besides all the known issues with UBI, a populists' favorite.

This thread demonstrates vividly how little the average person understands about economics and finance, even in a place like HN.

>So how do you guarantee that it is spent/transferred to something that isn't a savings vehicle?

Would you sell your gold for expiring money? The exchange rate would be much worse than the regular one.

We've already got half of that, it is called inflation. Anyone who tries to accumulate wealth by holding money in a bank account will either die young or poor.

Anyone who tried to hold cash through COVID probably isn't going to do too crash hot either, there is a lot more money around now than there used to be.

The problem is that people try to invest their money, it’s worth than saving and end up making markets like real estate an investment asset as opposed to a human right. People always need to get richer.

"problem"? I argue that a healthy economy should allow people to invest and defer consumption until they want to consume.

It's not that investment is bad, but that asset bubbles are bad even for the health of the long term investment landscape.

If only someone could profit off bubbles while at the same time deflating them...

All I’m seeing in your healthy economy is disparity.

The irony is that inflation is too low.

You want to invest in productive activities (companies hiring more workers or buying more machines, paving roads, building libraries) rather than unproductive ones (land and property speculation, stock speculation, buy-to-let rent-seeking, etc)

Paving roads is not an investment unless there's some sort of asset that you have equity in that will appreciate by your doing. But apparently you would condemn this as a form of "speculation".

The desire to tax accumulated wealth is equivalent to the desire to tax saving and deferred consumption. People like to dance around this point but it's difficult to avoid how abhorrent this is when it's properly framed.

What in the actual —

I specifically mentioned paving roads as an example of productive investment, how can you possibly claim I'm "condemning it as speculation"?

Sure, but this is not the job of the monetary system. The purpose of money is to facilitate economic transactions.

Investing, in the sense that there will be a physical company in the real world, with paid employees doing productive work so that consumers can have services, goods or infrastructure is absolutely fantastic. We want more of this.

Investing, in the sense that the company whose stock you are buying does absolutely nothing to justify the stock growth is absolutely horrifying.

However, the good news is that the person selling the stock now has money and that person should better figure out how to do the first type of investing or they end up suffering from inflation.

People will find a way to build a parallel monetary system, for sure.

Why would anyone use a currency that disappears? They will just store their money in some other form, then transfer it to govcoin when they have to pay taxes.

Using and storing are not the same thing. I think the whole point is that the storing of money is considered harmful.

Which is odd to consider, since the whole concept of money is 'storing' something in a fungible way, but still worth thinking about. To what extent does 'money' actually provide an improvement over 'commonly understood capacity to kick your head in', which is another sort of power a person or organization might have? Clearly if there's no money then there's the more immediate physical threat of force, or a more charming interaction like giving someone food or shiny rocks. Money permits an abstraction of this, so what is it incentivizing over the more primitive modes of interaction?

Huh. That IS interesting. It'd suit me right down to the ground, I'm always building stuff.

It also makes it the best possible time for 'pitch a wild idea that's going to be the next great business'. I still think that post-50s wealth created Silicon Valley: relative to how things are now, people were absolutely coddled and had tons of disposable income and spare time, which they used to pursue things like the Altair (a seemingly unproductive activity).

This became the democratization of something important, and it's taken this long for the power to swing back to capital holders.

Why just PERSONAL bank accounts? To disincentivize being a person?

A negative interest rate also leads people to ask the bank for a loan instead of patiently sparing money, and as far as I understand banks love this (more power upon people and free money!).

Negative interest loans for consumers would be very interesting.

Assuming we allow every citizen to borrow $1000 at -1% then the effect is very similar to helicopter money because the value of the debt is being eroded by inflation and you have to pay less back than you borrowed.

I think there are/has been negative interest mortgages in Denmark[1]. And actually, after the first shock, when you have thought it through, there is not that much interesting in negative rates.

Unless you have so spotless opsec that you dare store a mortgage's worth of cash somewhere for decades (and you get that much cash in first place in negative rate environments - I doubt banks are giving you that without really good excuses), you need to invest the money somewhere. Bank accounts? Of course, you get even more negative rates there. Stocks? Well, it is not that different to positive rates, you take quite some risk there. Houses? Well, that's what mortgages are for. But assuming a 100k mortgage, is that really so fundamentally different if you need to gather 99k instead of 101k from somewhere in 10 year's time?

[1] https://www.theguardian.com/money/2019/aug/13/danish-bank-la...

> Plaid.

Sorry, you touched a nerve. They seriously think it’s a good idea to type your bank password into an app that is not your bank. That is the best we can do right now for making payments. Or credit cards with only 3% transaction fee. Coinbase asks you to do this. Coinbase.

I’ve done some work on the Trezor code base. Once you see how much care this completely volunteer BIP process has put into security, consumer bank security becomes enraging.

My bet is that very little will change. The fed is the banks.

Different failure modes. Trezor is close to "mess up and everything's gone". Banks are closer to: share the password and a new transfer destinations will be confirmed over phone, may be checked against fraud databases, may be reverted in flight, may be reverted after sending, may be covered by insurance, ...

I think there was some law in the UK that forced every bank to implement a common API. Not sure what the name was but I think the US could use some of that.

UK CMA directive https://en.wikipedia.org/wiki/Open_banking#United_Kingdom

EU Payment Services Directive 2 (PSD2) https://en.wikipedia.org/wiki/Payment_Services_Directive#Rev...

Open Banking?

Oh boy, if you have never worked for a bank, you would be inclined to believe they have this shit down to a T after being such early adopters of tech and all the risks they undertake given their roles.

Turns out that it's best to ignore how the sausage is made.

> money that expires unless you spend it on goods

Why would anyone want that?

I presume that sort of money would be cheaper than the other kind. It's never a question of whether anyone wants lower-quality money, it's only a question of price.

You wouldn't want it. The Bidenbucks you get in a crisis would be the expiring money. It would force you to go spend it on food to keep your local restaurants alive, or replace your phone to keep the factories running, etc.

Instead we all got $1200 and pumped it into Doge, some EV SPAC, or similar speculative "investments".

Why wouldn't the expiring bidenbucks be spent on Doge?

Presumably, the money expiring would put a downward price pressure on something like Doge as no one could afford the newly inflated price

The seller gets bidenbucks. What is he going to do with them? Buy Doge?

If they remain bidenbucks when spent, why would any merchant accept them for anything?

But this is my money then, isn't it? My property - my rules.

If I have enough money without this check due to personal savings and economy, it would be pretty much unequal and unfair situation if I won't get anything from this helicopter money (making it expire) and some guy who got himself several debts for parties and travelling will get help.

Let's say that people actually spend money given to them, but invest their remaining saving into investments, if that make someone feel better. If I have my own 1200USD and get "expiable" 1200USD for free - it doesn't matter which one I spend, technically.

Why wouldn't people immediately trade this expiring "money" for any other currency, precious metal? Even memecoins are better than holding currency that's guaranteed to disappear.

This is government-enforced consumerism. Nobody wants to be forced to buy random stuff they don't need just to keep some struggling businesses alive. Saving or investing this money is a much better decision.

Because you can't?

Every purchase would be coded like they already are with credit cards. You can spend it only on the right category. Good luck trying to launder it when every transaction is logged and easily queryable.

"Government-enforced consumerism" sounds an awful lot better to me than picking winners and losers like in 2008 or massive stimulus that did nothing but boost asset prices like 2020.

> Because you can't?

You could make informal trades where you pay for something someone else would have already bought and give them a small discount. Or just buy something and resell it immediately.

> Because you can't?

> Good luck trying to launder it when every transaction is logged and easily queryable.

I buy something for someone, they pay me back in normal money or XMR.

Cool! The money was still spent on a good or service like it was intended.

Example, when the economy slows down the government sends you a 1000$ stimulus check that you must use in 30 days

I understand but why would anyone actually want that policy? If I have money, I should be able to do what I want with it, not what the government wants me to do.

It looks like they want to make it impossible to save money in order to increase consumption "for the good of the economy". I wonder how people are supposed to increase their net worth like this.

Stimulus isn’t supposed to increase net worth it was to provide people cash for the essentials and to artificially increase demand in the economy. Sitting in a bank account doesn’t help anyone until they retire decades from when they get the stimulus.

I see. So in this case only the stimulus would expire.

> money that expires unless you spend it on goods in order to increase the velocity of money

So, a gift card, but for everything?

Also like a very steep negative interest rate.

parabolic charts go brrr.

Depends on the area. In some places (Canada, and I think California) gift cards don't expire.

Demurrage

Why is 1, 2, 3, 4 or 5 good?

2) I guess we can debate how useful this is but surely it's strictly better than neutral, hence good?

3) Isn't it perhaps a useful way to provide a stimulus that people who already have enough cannot simply pile onto their hoarded supply?

4) I mean obviously we want to avoid money laundering.

2 and 3 are net negatives, giving too much power to the leader of the country...bread and circuses in their prime example. 4 is debatable, but in general - bad, money laundering is what the BigBrother decides it is.

Very conspiratorial of you. I, for one, would not like to discard the idea of a benevolent democratic government. Suit yourself.

Enjoy the next 20 years then!

I pray I will be alive when this system collapses.

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