People don't want to run their own bank

Re:People don't want to run their own bank by lottin on Saturday February 05, 2022 @02:27AM (#30218698)

How does the fact that banks are required to keep a deposit with the central bank limit their autonomy (i.e. become centralised)? As I see it what limits the autonomy of banks is not that the deposit is with a central bank but that they have to satisfy a reserve requirement. But according to your argument the reserve requirement itself is not what makes the banking system centralised, but the specific fact that banks have to keep a deposit with the central bank. How does that make sense? What does the word 'centralised' mean to you in the context of the banking system?

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Re:People don't want to run their own bank by thebean11 on Saturday February 05, 2022 @04:36PM (#30226393)

While they can technically accept money without being a fed member, they must keep that money with a fed member.

They need to keep money (printed by the fed) with a bank controlled by the fed. If you don’t see why that is a centralized system then not sure there’s much to discuss.

It’s distinct from reserve requirement, which doesn’t force you to store your money with a member of a single organization.

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Re:People don't want to run their own bank by lottin on Sunday February 06, 2022 @03:46AM (#30230578)

So, if they had auditors to check that banks comply with the reserve requirements (instead of requiring them to hold a deposit somewhere), the banking system would cease to be centralised? Is that what you're saying?

And what about a smart contract that requires participants to make a deposit with the smart contract itself? According to what you're saying such smart contracts are by definition centralised. Am I getting this right?

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Re:People don't want to run their own bank by thebean11 on Sunday February 06, 2022 @09:05AM (#30232562)

That would be less centralized, yes. The fact that one organization, the fed, has the unilateral and exclusive authority to create more money (essentially unlimited) would still be a very important point of centralization though.

> And what about a smart contract that requires participants to make a deposit with the smart contract itself?

What do you mean "requires"? Is there forced participation? Presumably anybody could make a competitor to this smart contract. I think I'd need a more specific example to understand exactly what you mean here.

It also depends on the contract itself. A contract that has an owner encoded into it who can make unilateral decisions is more centralized than an ownerless / immutable one.

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