What central banks ought to be doing instead of issuing their own fiat cryptocurrency

Former Blockchain.com CSO Andreas Antonopoulos on the idea of government-issued cryptocurrency like the RBI’s proposed ‘Lakshmi’:

“A private ledger is an oxymoron, it has none of the advantages of a digital open currency like bitcoin but it has disadvantages and brings more along with it. It is a database without the advantages of a database and is not secure. If you centralise control over it, it is corruptible, mutable and not secure,” he said.

Such a hybrid, in Andreas' opinion, would achieve the worst of both of worlds -- as it would have all of the disadvantages of traditional currencies and none of the advantages of cryptocurrencies.

Also, it’s hard to create bid-driven, neutral transaction verification like mining on the Bitcoin blockchain:

For a private cryptocurrency, there will be little incentive for miners to provide hashing power for a currency that could potentially be inflationary.

This will leave the mining operation entirely in the hands of the state or trusted third parties. In which case, hypothetically speaking, they could overwrite the existing entries on the ledger, leading to manipulation.

The idea that a central bank can ‘issue’ a cryptocurrency by fiat – potentially outlawing all others – shows how little banks understand such blockchain-based currencies, leave alone being able to understand and optimise for their benefits and mitigating their risks. It’s a mixture of outright fear of loss of control, and fear of Missing Out.

If anything, central banks should be running a reliable exchange for cryptocurrencies and tokens that they estimate will have real value. Such a central bank exchange’s functions ought to be ensuring liquidity and fair spreads, reducing settlement risk, minimising costs of converting fiat to crypto and back – these nodes between the crypto to the fiat world are going to be extremely important.

Further, central banks ought to spend their time and effort reducing FUD and encouraging participation (instead of the opposite!), drafting legislation around crypto-wallets especially around security, encouraging creation of real use cases for such currencies and tokens so they don’t become purely speculative, including encouraging initial coin offerings from private companies where it truly makes sense.

These are hard things to accomplish, but this is where central banks will find relevance in the future landscape. It’s no use and benefits no one to simply issue one’s own currency without addressing any of this. Correspondingly, none of these requires one’s own cryptocurrency.

Finally, if central banks truly want to continue to be influential, they will need to cooperate far more than they do today. National borders are irrelevant to cryptocurrencies; exchanges and legislation need to span countries, especially those with closely integrated real world trade.

Moulding one’s own Reality from blobs of Overinformation

Louis Rossetti, in conversation with Om Malik:


Today, with so many different nodes on the network, the idea of “that’s the way it is” seems ludicrous, although people adhere to it in this atavistic way of thinking that there is a “that’s just the way it is” reality. There is a real reality. I think everyone of us are touching the elephant and trying to imagine what that reality is. Instead, what’s happening is nobody can get the whole elephant, so there’s this consensus reality that is being generated about that elephant.

... we don’t really know that’s the way it is on an individual level. The whole tribe has a sense of it in their subconscious, a super conscience way. It’s time, perhaps, to let go of the feeling that there is a security of one reality, although there is only one reality.

Helping your users grok your app the way you do

Whether you explicitly created it or not, you have a conceptual model of your app, or site. What parts do what. What they are called. And how they fit together.

This is different from the visual model, for your iPad app could look very different from your iPhone app and your web app.

So it’s important that your users grok the app the way you intend them to, and the best way is to quickly and simply walk them through it at first use.

Things 3 does it quite well for a sophisticated app:

Note that doing this is straightforward because Things has also designed its main, home screen to reflect that conceptual model.

It could have been a set of menu options tucked away under s hamburger, or tab bars with a ‘more’ tab for expansion. Or worse the model could have been multi-level, making it truly difficult to communicate. See Swarm’s splash screens attempting to do the same thing:

It’s a great app that I like using, but the screenshots here don’t do nearly as good a job setting expectations with a new user about what the app’s about (Swarm recently radically redesigned their app, so even an existing user was, for this purpose, a new one).

Things designed their app so that the model is (mostly) single-level, and reflected on a single screen.