Former top official says Fed should ‘Maybe’ create ‘FedCoin’ to rival Bitcoin
What is a &quot;blockchain&quot;?<p>To me, a blockchain is a way of solving double-spend problems in a Merkle tree maintained by open distributed consensus, by using some scheme to resist Sybil attacks. The scheme is not necessarily proof-of-work, but the fact that there&#x27;s a double-spend problem and you&#x27;re solving it is key to the idea.<p>If you don&#x27;t have a double-spend problem because all your transactions commute (e.g., Certificate Transparency), you don&#x27;t have a blockchain, just a Merkle tree. Which is great, you don&#x27;t have to incur the costs of mining at all, nor do you need to think about mining incentives and structures.<p>If you&#x27;re not using distributed consensus because you have a central coordinator, you don&#x27;t have a blockchain either, and again, you get to not think about mining. Whichever transaction reaches the coordinator first wins, so double-apend becomes irrelevant.<p>If the Fed wants to build FedCoin, I don&#x27;t see any reason why they should refuse to be the central coordinaor and instead outsource consensus to the internet. I don&#x27;t see any reason why they <i>would</i>, if they want to influence monetary policy at all—70% of Bitcoin mining last year was in China, which meant that it would have been straightforward for China to (globally!) freeze a Bitcoin address, and a little more complicated but still possible to prioritize or throttle certain transactions.<p>Maybe being protocol-compatible with Bitcoin or ERC20 or something would help, but fundamentally this would be an API to transfer USD, not a decentralized system.<p>See also patio11&#x27;s Tweet <a href="https:&#x2F;&#x2F;twitter.com&#x2F;patio11&#x2F;status&#x2F;583698553614143488" rel="nofollow">https:&#x2F;&#x2F;twitter.com&#x2F;patio11&#x2F;status&#x2F;583698553614143488</a> &quot;Most advantages of Bitcoin which matter are captured by, and improved upon by, a LAMP app which simply holds account balances.&quot; If the Fed wants to build that app, great!