Central Bank Digital Currency ??

[MountainGirl]

A few days ago I decided it was time to really learn about crypto currency.
Found some good beginner vids - so I have a base knowledge on it now.

(Inor - did you go with a non-custodial wallet?)

Anyway, near the end of my 'studies' - I learned about CBDC (Central Bank Digital Currency) and all the warnings against it - and now I'm like holy shitski. This is not good.

If you're not familiar with what's coming - here's a short (10min) vid that explains it in simple terms and lays out the pre-steps for the implementation for the roll out scheduled for mid-2023.



I'm still learning about this... but what I want to ask you guys is this:

When (not if) the .gov is in full control of all financial transactions - do you think cash will still be in play at all?

Will our only options be either the new "FedNow" or barter?

To really prep for the next 5yrs (if we all live that long)... to stay off the .gov network - would it be better to stock up now on cash? barter goods? crypto ?

Edit/add: I'm thinking Crypto wont work - because - even now, banks are the on-ramp/off-ramp to exchange dollars for crypto (or to convert crypto back to dollars to buy something when the vendor doesn't accept bitcoin etc)... and after the Fed's CBDC is in play, maintaining privacy will be the least of our concerns; conversion (of non-Fed bitcoins) wont even be an option.

2nd Add: It just occurred to me that when CBDC is up an running - our SocSec payments will be deposited into our very own "FedNow" accounts - for use and tracking. Is there no end to this insanity??


All help appreciated -
Thanks in advance -

[BucketBack]

You'll be lucky to get Soc Secure in a few years

[MountainGirl]

You'll be lucky to get Soc Secure in a few years

Could be.
Even if it still comes, whatever the money is spent on will funnel through the FedNow system - as long as it's something we're allowed to buy.

[Inor]

A few days ago I decided it was time to really learn about crypto currency.
Found some good beginner vids - so I have a base knowledge on it now.

(Inor - did you go with a non-custodial wallet?)

Anyway, near the end of my 'studies' - I learned about CBDC (Central Bank Digital Currency) and all the warnings against it - and now I'm like holy shitski. This is not good.

If you're not familiar with what's coming - here's a short (10min) vid that explains it in simple terms and lays out the pre-steps for the implementation for the roll out scheduled for mid-2023.



I'm still learning about this... but what I want to ask you guys is this:

When (not if) the .gov is in full control of all financial transactions - do you think cash will still be in play at all?

Will our only options be either the new "FedNow" or barter?

To really prep for the next 5yrs (if we all live that long)... to stay off the .gov network - would it be better to stock up now on cash? barter goods? crypto ?

Edit/add: I'm thinking Crypto wont work - because - even now, banks are the on-ramp/off-ramp to exchange dollars for crypto (or to convert crypto back to dollars to buy something when the vendor doesn't accept bitcoin etc)... and after the Fed's CBDC is in play, maintaining privacy will be the least of our concerns; conversion (of non-Fed bitcoins) wont even be an option.

2nd Add: It just occurred to me that when CBDC is up an running - our SocSec payments will be deposited into our very own "FedNow" accounts - for use and tracking. Is there no end to this insanity??


All help appreciated -
Thanks in advance -

My wallet is non-custodial as in, not online. It is only local on my old cell phone (not connected to any cellular network). I actually have two wallets. One I use for buying stuff - mostly the feed mill. The other is only used as a storage location and I do not pay for anything from it. If I ever need to use it, I will transfer the funds to my other wallet to spend them.

Just a heads up on Bitcoin and ETH... The federal government has proven to be fairly competent at being able to use forensic accounting to be able to associate a wallet id to a real person. For now, I am counting on the fact that I am doing very small transactions through it to maintain my anonymity. I rarely have more than $2000 in my public wallet and the largest spending transaction I have ever done with it was maybe $200 US.

There is a new crypto called Monero https://www.getmonero.org/ that seems, so far, to be untraceable. Unfortunately, nobody around here accepts it yet for payment. I expect that to change quickly as the Fed moves towards the CBDC.

The way I expect the CBDC to play out... The Fed's CBDC is due to roll out next summer some time. Federal Reserve Notes will continue to be "legal tender" for a few years after that. They may choose to keep them in circulation for several years, but if they do, expect to see them also to change the notes significantly, similar to how the British are currently changing their Pound notes. The old paper Pound notes will no longer be valid after this month - only the new plastic Pounds will be accepted. I'm sure the Fed will do something similar if they choose to keep some kind of non-digital currency. Expect it to have some kind of tracking code on it, think something like a QR code or similar that can be scanned (and tracked) at the bank and by merchants.

I doubt the FedNow accounts will immediately replace private banks, but SSA payments and taxes etc. will all go through the FedNow system. It will force everybody to have a FedNow account, but we will be "allowed" to keep our private accounts. Private banks will eventually just go broke due to lack of deposits. It will take 5-10 years, but will prevent the population from open revolt if they go slowly.

This is obviously EXTREMELY BAD! It is also why we need to start NOW doing business in the "gray economy" using non-CBDC digital currencies. That is going to be the only way we will be able to maintain some degree of privacy. The upside is, folks are starting to wake up to that fact. It will take some time at first, but crypto is here to stay and more and more vendors will start using it since it allows them to save significant taxes. That will only grow faster as it becomes more obvious what is going on with the CBDC.

You do not need to buy crypto through a traditional bank or broker although that is the most convenient way to buy it. But, there are also a bunch of off-shore crypto brokers that do not report to the U.S. government and in most cases, are cheaper than U.S. based brokers.

[1skrewsloose]

I have a tough time thinking this digital stuff wiil work out, will they pickup up all paper money, render it useless? Illegal drug sales are all cash, something like half a trillion a year just in the US. They went from checks for welfare to debit cards, but folks just buy food and trade for pennies on the dollar to buy dope. I don't like it at all, but implementation will be a rough road. Just opens the door for a black market.

[MountainGirl]

My wallet is non-custodial as in, not online. It is only local on my old cell phone (not connected to any cellular network). I actually have two wallets. One I use for buying stuff - mostly the feed mill. The other is only used as a storage location and I do not pay for anything from it. If I ever need to use it, I will transfer the funds to my other wallet to spend them.

Just a heads up on Bitcoin and ETH... The federal government has proven to be fairly competent at being able to use forensic accounting to be able to associate a wallet id to a real person. For now, I am counting on the fact that I am doing very small transactions through it to maintain my anonymity. I rarely have more than $2000 in my public wallet and the largest spending transaction I have ever done with it was maybe $200 US.

There is a new crypto called Monero https://www.getmonero.org/ that seems, so far, to be untraceable. Unfortunately, nobody around here accepts it yet for payment. I expect that to change quickly as the Fed moves towards the CBDC.

The way I expect the CBDC to play out... The Fed's CBDC is due to roll out next summer some time. Federal Reserve Notes will continue to be "legal tender" for a few years after that. They may choose to keep them in circulation for several years, but if they do, expect to see them also to change the notes significantly, similar to how the British are currently changing their Pound notes. The old paper Pound notes will no longer be valid after this month - only the new plastic Pounds will be accepted. I'm sure the Fed will do something similar if they choose to keep some kind of non-digital currency. Expect it to have some kind of tracking code on it, think something like a QR code or similar that can be scanned (and tracked) at the bank and by merchants.

I doubt the FedNow accounts will immediately replace private banks, but SSA payments and taxes etc. will all go through the FedNow system. It will force everybody to have a FedNow account, but we will be "allowed" to keep our private accounts. Private banks will eventually just go broke due to lack of deposits. It will take 5-10 years, but will prevent the population from open revolt if they go slowly.

This is obviously EXTREMELY BAD! It is also why we need to start NOW doing business in the "gray economy" using non-CBDC digital currencies. That is going to be the only way we will be able to maintain some degree of privacy. The upside is, folks are starting to wake up to that fact. It will take some time at first, but crypto is here to stay and more and more vendors will start using it since it allows them to save significant taxes. That will only grow faster as it becomes more obvious what is going on with the CBDC.

You do not need to buy crypto through a traditional bank or broker although that is the most convenient way to buy it. But, there are also a bunch of off-shore crypto brokers that do not report to the U.S. government and in most cases, are cheaper than U.S. based brokers.

My understanding of the difference between custodial and non-custodial wallets is not whether one is safely offline (which is also a good idea) or not, but rather that with non-custodials there is no middle man, i.e., the transaction is direct between you and vendor - whereas with a custodial the transaction routes from you to a third party (the custodian) and then to the vendor. Is that correct? If so, there might be a future problem with CBDC control over custodians whether we're using a non-CBDC digital currency or not. Relatedly, there might be a future problem with vendors being able to accept non-CBDC currency - controlled through regulations, permits, licensing, etc.

You are right that crypto is here to stay- even TNM (Texas Nationalist Movement) is doing a fund-raising campaign and 'Texan Tokens' are being given as a donation premium. (Interest-bearing, 5%, scrapeable)

I didn't know anything at all about the changes in the Pound notes. Wow. Thank you for that. Guessing it's only on their $20s and $50s because of quantities in circulation, or perhaps tracking small notes would be too cumbersome, or maybe because it's only large-bill transactions they're interested in, but whatever the reason yes - I can see the Fed phasing that in here as well IF, like you said, a non-digital currency is kept - which I doubt will be - and if it's 'trackable'? Then the point of using Cash is gone.

Hmmm. Stockpiling cash might be a good short-term (1-2yrs) solution but a better one (for us) might be to make sure we purchase every "I'm sorry, purchasing that item is no longer allowed" thing we want now - and then later, when all there is is CBDC and FedNow accounts, our monthly Social Security would be the only financial assets/income we have - and hopefully with our new FedNow card we can still buy food. If not, we've got that covered too, LOL

Thanks Inor. Very much.

[BucketBack]

I have a tough time thinking this digital stuff wiil work out, will they pickup up all paper money, render it useless? Illegal drug sales are all cash, something like half a trillion a year just in the US. They went from checks for welfare to debit cards, but folks just buy food and trade for pennies on the dollar to buy dope. I don't like it at all, but implementation will be a rough road. Just opens the door for a black market.

[MountainGirl]

Ya know BB? Sometimes the stuff you post is plain nutz.
In this case - Yeah. I get it. And I agree.

[Inor]

Disclaimer: Before I comment, I just want to clarify... I have only been accumulating Bitcoin and buying things with it for about 6 months. Before that, I spent about a year studying up on it trying to figure out how it works and satisfying myself about its validity and security. So... I am by no means an expert! The information I give should be taken as nothing more than a somewhat informed (or possibly misinformed) opinion.

My understanding of the difference between custodial and non-custodial wallets is not whether one is safely offline (which is also a good idea) or not, but rather that with non-custodials there is no middle man, i.e., the transaction is direct between you and vendor - whereas with a custodial the transaction routes from you to a third party (the custodian) and then to the vendor. Is that correct? If so, there might be a future problem with CBDC control over custodians whether we're using a non-CBDC digital currency or not. Relatedly, there might be a future problem with vendors being able to accept non-CBDC currency - controlled through regulations, permits, licensing, etc.

Let's take the discussion of crypto (Bitcoin, Ethereum, etc.) separately from the discussion of CBDCs. They are completely different animals.

If you have a cyrpto account using a custodial wallet with a company like Robinhood or Coinbase (what I call "online"), you really do not own ANY crypto yourself. What you really own is a legal claim on some amount of crypto that is owned by the custodian. You can direct them to send some amount of Bitcoin to somebody else and they will send it (probably), but it is not directly in your control. My opinion is, if you want to trade crypto like you would trade stocks (I.E. buy $10,000 of Ethereum today and sell it next month for $15,000), having a custodial account is the way to go. It is easier, quicker and the custodian keeps track of all the paperwork for your accountant at the end of the year.

With a non-custodial wallet you actually OWN the crypto yourself. You buy it, in my case through a broker that owns it now. They get the address of my wallet, transfer it to my wallet, then it is mine as soon as the transaction clears the Bitcoin network. Clearing the transaction can take anywhere from a couple minutes to several hours, but once the transaction has cleared, the crypto is mine and there is nothing anybody can do prevent me from accessing it and doing whatever I want with it.

Using a non-custodial wallet, the government, nor anybody else, can prevent me from transferring it to whomever I want. The key to understanding that part is understanding the nature of crypto is really the Ledger (called the blockchain). The Ledger is a record of every transaction ever performed with a crypto since the beginning. The desirable feature of Bitcoin, Ethereum and others is the fact that the Ledger is not kept in one place. Copies of the Ledger are distributed across millions of servers all over the world. If the Ledger on any of the servers do not match the master Ledgers on all the other servers, the errant server is simply ignored by the Bitcoin network. So if the government wanted to prevent me from accessing my Bitcoin, they could not just prevent it on a couple servers; they would have to prevent it on every single server on the entire Bitcoin network all over the world simultaneously. That is simply not going to happen.

Also, if the power goes off and shut down all the Bitcoin servers in an area, all of the other servers everywhere else in the world will keep the network active and keep the Ledger current. When the power comes back for the affected servers, they are updated with all of the activity that happened while they were offline and they begin participating in the network again. So even if we get hit with an EMP, the network continues. An EMP would have to shut down the entire world all at the same time to kill the network. (If that happens, losing a couple thousand dollars in my crypto wallet is going to be the least of my concerns.)

That is not to say, Bitcoin or Ethereum is a panacea. The Ledger, while distributed, is also public. Anybody can see any transaction. But individual transactions are somewhat hidden, first by sheer volume and second by the fact that each transaction is only associated with a wallet id and not the identity of a human or company. Like I said in my previous post, the government has shown some ability to be able to piece together wallet ids and associate them with actual people. But you have to figure, even if we were using Bitcoin to buy and sell meth, how much volume would we have to be doing before it would rise to level where it is worth their time to follow it up with as much research as would be required to put the pieces together? In my case, buying a truckload of animal feed and a meal here or there is simply not worth their hassle. But something like Monero, which is supposed to be totally untraceable, will be great if it gains widespread use.

Other than the fact that it is digital, a Central Bank Digital Currency is a completely different thing. With a CBDC, the Ledger is centralized under the control of the central bank and/or government only. They are the clearinghouse for all transactions. If they decide that we should not be able to buy whatever, they can prevent it because all transactions go through their single Ledger.

You are right that crypto is here to stay- even TNM (Texas Nationalist Movement) is doing a fund-raising campaign and 'Texan Tokens' are being given as a donation premium. (Interest-bearing, 5%, scrapeable)

I didn't know anything at all about the changes in the Pound notes. Wow. Thank you for that. Guessing it's only on their $20s and $50s because of quantities in circulation, or perhaps tracking small notes would be too cumbersome, or maybe because it's only large-bill transactions they're interested in, but whatever the reason yes - I can see the Fed phasing that in here as well IF, like you said, a non-digital currency is kept - which I doubt will be - and if it's 'trackable'? Then the point of using Cash is gone.

I do not know what excuse the UK is using for their new script, but they are a completely fucked up country anyway. The last time I was there was at least 7-8 years ago and they were docile as a beat dog back then. I can only imagine it has gotten worse since. But starting tomorrow, their old paper notes are worthless. I assume the coins are still okay?

Hmmm. Stockpiling cash might be a good short-term (1-2yrs) solution but a better one (for us) might be to make sure we purchase every "I'm sorry, purchasing that item is no longer allowed" thing we want now - and then later, when all there is is CBDC and FedNow accounts, our monthly Social Security would be the only financial assets/income we have - and hopefully with our new FedNow card we can still buy food. If not, we've got that covered too, LOL

Thanks Inor. Very much.

Stockpiling too much cash would make me nervous. If the Fed does decide to do a Bank of England where we have to trade in our notes or lose them and you walk into your local bank with $50,000 in a paper bag (particularly in a border state)... I am just going to spread things out amongst a variety of assets - some Bitcoin, some Ethereum, maybe a few others, some gold, some silver, etc. Plus, we have been buying a lot of productive assets since we moved to AZ - tractor, chicken setup, beef setup, soon to be pig setup, etc. No one thing looks like much and if they figure out a way to lock us out of one thing, it does not hurt quite so much. But that is just me, your milage may vary.

[1skrewsloose]

https://www.bankofengland.co.uk/news...d-50-banknotes

Just to clarify, instead of paper they'll be polymer, they take more abuse and last longer.

But starting tomorrow, their old paper notes are worthless-this is true.