HOW A NEW DIGITAL DOLLAR COULD BE IMPLEMENTED IN THE US | INTERVIEW WITH HASHOSHI

by birtanpublished on August 21, 2020

What's up crypto gang welcome back to another episode of hack crypto where we hack our cryptocurrency education and if you guys are brand new here we do a giveaway at the beginning of every single episode and today's winner is manila crypto thanks so much for

Commenting on the previous video with your wallet address Manila crypto just sent you some Bitcoin on this special episode I sit down with her show she now I've done quite a few collabs with Yoshi in the past mainly because he is a

Fantastic guy and overall guru when it comes to the development side of blockchain technology and it's a lot of fun talking to him about some of these hypothetical situations now we are in tough times right now

With the current market correction on the stock market because of coronavirus and we are in a difficult time with unemployment and things like that spiking projected to double up by next month so a lot of kind of tumultuous

Things going on in the world right now everybody's sitting at home self isolating things like that at the time of filming this video we're sitting in our house as well day in and day out waiting for this coronavirus to blow

Over but what I wanted to do today was sit down with his Yoshi and go through a hypothetical situation where we create a digital dollar there are a couple organizations that to show she actually mentions in our interview together about

Companies that are working together on creating a digital dollar and effectively stopping this just constant over printing that is happening because if you guys aren't you know familiar with how the economy kind of functions

With the Fed and things like that if you just print a bunch of money and the simplest way possible if you just keep printing money a trillion dollars a day you are going to run into inflation your money is going to be worth less and that

Is kind of what we talk about in this interview so we're gonna go through a step by step situation of what would happen if we created a digital dollar and how the transition would happen and we come up with some pretty fun things

In the interview so without further ado let's dive into my interview with his Joshi what's up guys i am steve from hacked crypto the YouTube channel here how's it going guys to show she here from the YouTube channel he probably

Guessed it a show she how's it going I'm doing great and it's kind of wild times right now and I think we were in the Twitter DMS and we both decided yeah we should do an episode where we come up with a digital dollar yeah again we were

Just tossing around ideas and I think now especially with all the stuff that's going on with you know reserve banking I think people there are a lot of people now are getting their first view into what central banking reserve banking

Actually is and what it means so I thought it might be cool to chat about that the idea of a digital dollar yeah and I actually got a couple messages from viewers that said that they finally learned what a balance sheet was like

They they heard about it they were like oh and they started researching it and figuring out what it meant and the importance of it and all the aspects of it and I guess the glass half-full is it's actually teaching people a bunch of

Things yeah yeah I agree obviously circumstances you know I wish were better for people to learn what this is all about but you know we gotta we gotta live with what we got today so I mean I think a good place to start though might

Be for folks that actually might not know what's happening right now in the u.s. in terms of the supply of dollars and the strut like strategies that are happening like Steve do you have some insight on that to share with folks yeah

So right now as people very very well know the corona virus is causing a slowdown state state by state in the United States is saying stay inside you know isolate yourself practice social distancing make sure that you don't get

Infected with code 19 and what that is causing with an economic slowdown his businesses are then not accepting the cash flow that they would have accepted previously yeah and when you have this happen there's historic levels of

Business debt and when you take on debt as a business to evaluate that they measure that by cash flow so they give you certain amount of debt and you know evaluate your risk depending on that amount of

Cash flow how much you can take on so we have historic highs of this business debt globally in the u.s. it's pretty bad and this slowdown is triggering a lot of like a chain reaction where if you reduce your cash flow drastically

And you can't meet your obligation of that debt you have to reduce your overhead and your expenses and the first thing that many people are thinking and know about our layoffs and once you have layoffs you know you have your markets

Reacting you have all these things reacting like shareholders dumping and things like that you lose value and it's just a compounding effect so that's like a broad high level of the the pandemic causing people to stay inside not go to

Businesses businesses can't make their debt payments because they don't have the cash flow for from chrome consumers that are staying inside and it's just this visceral cycle that is really kind of picking up picking up momentum right

Right around now yeah and then that affects like broad brushstrokes across big businesses and small business I mean there are big like monstrous businesses like Hilton that I saw today are like really in trouble in terms of cash flow

Because I'm sure there are people that have no certainty that this is gonna blow over anytime soon that are just cancelling in mass travel plans and by policy that's a lot of capital that Hilton now is gonna be without things

Just don't balance the same way you know and and throwing another curve ball is that internationally we are you know not just lending to United States businesses and we're not only borrowing from United States banks and things like that so

When you run into this you have like a systematic fall down with Italy which is a massive economy on full shutdown they're not going to be able to service accommodate any type of debt that other countries or themselves just like us

Have so you have this really disturbing kind of scary network effect happen but this episode's supposed to be somewhat positive so yeah it's a good segue into what we wanted to talk about today so maybe since how do you want to start

With with the idea so I think just conceptually right up front I think the thing that people struggle with and if you go on Twitter and you hear people talking about the monetary policy and the system that we have now is that

There's basically no limit and no cap to the amount of new currency like denomination that's out there right so right now almost daily it seems they're milt like millions billions and at one point trillion dollars just printed

Created almost out of thin air actually it is out of thin air now try and stabilize people in terms of how the economy feels so I think having conceptually for people that are interested in things like Bitcoin and

The reason why it has value is that fixed supply and that supply and demand curve obviously panic changes a lot of things but creating a system that's resilient against just free-for-all supply injection is an interesting

Concept yeah yeah well said because it's literally just an edit button on a screen now the term printing psychologically was yeah least there was some work yeah involved in that like we got to go to the printers and now it's

Just a couple clicks on the computer which is terrifying and that debase is the currency and everything so one thing that I wanted to bring up quickly before we go through like a concept that you just brought up was a

Deflation deflationary spiral and this is effectively where when you have a like lower priced goods because businesses are gonna start lowering prices to goods just to really increase their cash flow and get back on track

You have smaller cash flow you have smaller profits you have a reduction in production which is layoffs you have increased unemployment and then you have less spending and then you have oversupply of goods and services at a

Low cost so it's this vicious cycle that one of the reasons why we really wanted to to dig into this was to really avoid like a deflationary spiral like type thing and I think that it's it's a fun exercise in

Bleak times yeah I'm totally with you I think the idea that you could have a digital version of the dollar right up front it has first of all that benefit right but secondarily it has a bunch of cop

There's a bunch of cost savings associated with all of that because if you think about the the sheer volume and cost of accounting right now just on like the dollars and cents literally it's crazy I think people don't really

Realize the astronomic task that it is to keep track of accounting within businesses and banks especially it's not it's not as unified I think as people might might assume it is there's a lot of reconciliation there are a lot of

Like banking transfers debits and credits all that stuff is sort of like Frankenstein IT solution sort of pieced together over time and it's like bad decisions ten years ago are kind of being mandated now so I think it's it's

Time to to modernize even that part of it yeah yeah so moving into what our our idea was here yeah yeah what you mentioned before is the the Federal Reserve if you guys are new to what that is it is

Supposedly you know quoting separate from the administration they work together closely and they are responsible for what as Joshi was talking about with printing the money so as of February there is one point seven

Five trillion notes in circulation so that is physical cash it's in circulation so we wanted to crunch some numbers real quick and the overall premise like what you're talking about is immense savings right out of the gate

Because if you're if you're making all this digital it will save quite a lot of money but if there are 350 million people in the United States and if we were to give everyone 1000 of these these new minted tokens and the

Incentive was for businesses to accept them immediately becoming exchangers or currency exchangers so I have my US dollar I can convert it seamlessly and transact with these businesses and get returned with my my actual token I think

That it it almost acts as a like a quick immediate airdrop style you bi to everyone as a stimulus and the idea being that they're going to spend it at these businesses that accept it and that is maybe that's where the government is

They're like backing that concept of saying like these people will accept it we insure them maybe that's yeah that could be where that could be where they fit in and we were chatting about this prior before we started recording this

And we were trying to figure out where the government would naturally fit in because I know that we'll have you know the crypto Anarchy crowd in the mix saying well why do we need governments

In general and you know all of that jazz totally understand when in reality that got to take into account the fact that a lot of these like institutions are institutions that are not just going to disappear into thin air in one

Generation if ever so we just have to think about the solution and how these existing parties will play yeah and it was it was difficult to try and think we decided to start recording just figure it out along couldn't like just it was

It is difficult because it's the spectrum that we were talking about where it's either no power all the power it's like yeah with this with this whole concept so the idea of there's 80,000 bank branches like physical bank

Branches and I brought this up in the past of if it was a proof of work system banks would just become miners but in this example and both shoji and may being proof of stake junkies love it love everything about it

And all really cool all of the crypto economics about it love it so for this example proof mistake eighty thousand branches like your neighborhood the one right down the street from you is a considered a node on this network of

These 500 billion tokens that are the u.s. digital dollar and what we were talking about before was these people are voted on so very similar to icon AOS and the DPOs projects elegant proofs take me and show she and you guys

Watching would vote on these institutions the one right around the street from you you would say okay you can support the network governance I vote for you with my stake this is my my amount of digital dollars you help

Support and also for all of the local businesses and everything you need to help present proposals to get funded you need to be really good at it I need to make sure that you're doing a good job of

Bringing those proposals making sure they're getting funded maybe even like tracking to see what their conversion to funding is number of edits and whatnot and the most fun part was what you brought up which was about the rewards

For value creation yeah I think it's really interesting I mean if you think about in this ecosystem how banks are no longer like if you think about what banks do now like they're two or three big roles one is lending like they lend

With your money to others and that's a revenue model they also are like storage right they store money for often for a cost lots of banks charge their customers money to store their money and then I would say third it's also

Supporting the central banking institution that there is like the whole central bank concept weaves very closely into the banks that you and I go to all the time and so in this ecosystem banks no longer have either of those money

Making or revenue generating opportunities per se so maybe their role the future is banks are gonna be there not to to do those things but rather to help secure and help govern in a sense the entirety the transaction network but

In that case it's not as you're not as reliant on banks to do things for you like the banks are not a point the single point of failure for you as a trans actor a purchaser so I think that's interesting right up front but

Going back to what you said obviously we wouldn't just want on a tangent so my apologies but trying to think about after that initial ubi phase right where you've tried to migrate your physical 1.75 trillion into this ecosystem for

Every adult person in the US then you have this idea of okay we have a fixed apply of I think you said 500 billion right yeah yeah you have a fixed supply of 500 billion and so a lot like maybe a Reserve Bank would be but in this case

Algorithmically right so it's a machine not 10 15 people sitting in a room and making decisions the creation or the release rather of supply up to that cap would occur based on value add so they're going really deeply into the

Idea of capitalism which is rewards go to those who create the most value and you have a free market to create value for other people and to contribute resources to what you want to contribute resources to and so in that case if

You're a customer of a business that grows and starts contributing you know to other businesses or contributes to the community and they have a value add so as a customer as you contribute value to businesses that also contribute value

There are ways that you can measure the net positive benefit of that within communities within entire States which init within countries and eventually even globally if you think about it like a large-scale so we're thinking

Conceptually if you could measure that effectively that could be a way that you receive benefits as a participant in the economy because today you supporting Amazon and buying a bunch of stuff from Amazon you get the benefit of getting

Whatever product and getting it delivered to you in two hours which is great but your contribution at a larger scale is that you're contributing to a business that contributes a ton of value to the country that we're in and

Globally so you should get a kickback for that you know almost like a civic responsibility of supporting businesses yeah yeah and I I studied where I was required to study in college incentives for like two or three semesters in terms

Of like what's worked what hasn't worked and yeah then times around that are quite beautiful in that not only are you going to get the product or service that you're paying for in this fixed supply economy

But having having the ability to reap benefits from that yeah long-term really make you think about where you're purchasing your goods from yeah for sure and I think that that it naturally I've always

Talked about this like crypto projects are no different than real like big businesses in the space today and banks like a lot of the problems that come and ideas that don't work is because the incentives for the users are completely

Perpendicular to and run counter to the incentives for the the product owners or the like the delegates and delegated proof of stake like if the incentives for those parties aren't aligned then it doesn't work the way you want because

Your force fitting a system and I think especially right now during panic what really needs to happen is people need to find creative ways to contribute to businesses in their community and contribute to businesses abroad but

Everyone's first reaction is the only way I can protect me and my family is to hoard and to collect and to just stop like not contribute anything to anyone right now it doesn't need to like sit on my assets and then that just contributes

To the problem because people pull out of the stock market people pull out in mass on Bitcoin and cryptocurrency and that just causes this repeating effect of like recession yeah yeah they buy toilet paper

Yeah they buy toilet paper honestly I mean there are some companies that are pit later you know I'm just not stoked about this but they're making tons of money as a result of what's going on right now yep and

In terms of what what a really fluid and functioning economy needs is stability so it's the ability for me and and and you and everyone watching to predict future costs like if I know that everything is going to my one digital

Dollar produces the same amount of value ten years from now I feel comfortable spending that they need real savings they need the ability to feel comfortable holding that that digital dollar that's not just gonna implode

I think crypto projects really missed out on that and you need competition of course with exports you know whatever you're doing that's unique as a civilization you need to be able to have competition everywhere and of course you

Need your your investment like your your ability to make sure that inflation isn't going to go through the roof and your money's not gonna be worth it much but that kind of goes with real savings so you need all these stabilization

Pieces within it and you mentioned one thing before we started the stream about the the the Fed and the Fed is controlling they have a couple levers interest rates being a big one where they just lowered up and down to like

Zero and and yeah 25 so what you were saying before was that could be like a smart contract essentially like this yeah what the Fed is doing yeah absolutely I think from a technical perspective or a ways away from being

Able to accurately measure value at like we're talking about to be able to accurately measure and conditionally flex and and turn those levers that like a central banker or if the like Federal Reserve would do today and like a smart

Contract but fees like the feasibility long-term is there for us to say the flaw in this this sort of monetary policy and this banking scheme is that people are imperfect people panic and the levers only

Go so far when you have human bias behind them right its third I think also now more more and more people have a distrust for the system quote-unquote it's not just the central banks and so I feel that the the levers that are being

Pulled don't mean as much anymore and don't have as much of an effect because people don't they know the illusory nature like of what's going on behind the scenes so I think if you put machine in control that is inherently unbiased

And works only on numbers and only on algorithm then people might trust and it also it would almost be silent because as things as things change and flex it would adjust not just in pandemonium it would also it would also flex and

Balance in times of expansion mmm so I think that's another one I feel like a lot of a lot of times no one hears about monetary policy until there's a problem when it needs to happen in both directions because unchecked expansion

Causes unchecked recession in my opinion I'm no I'm not an economics major either so I'm just saying from like anecdotal evidence leaves me that direction yeah I mean even a young a young child five-year-old Steve and five-year-old

Force would sit down and say if he keep printing this it's not as valuable as yeah if I have one of these and then he print a million or a trillion of them it's not as special it's yeah if you gave me a bot like I was into Legos as a

Kid you give me a box I had this one box like 500 Legos and inside that box there was one like silver-plated it wasn't actual silver you it was just like chrome sprayed Lego piece that was like a treasure to me because I just had

One out of that 500 so the concept there was like ah okay this this has value because it's one out of this five hundred and one piece set that is silver but I could have gone to you know I could have gone to the store and got in

A box of all of that like all 500 being silver and it would have devalued that in my mind as well oh yeah we were introduced to these concepts so young so young so yeah so to to replay back everything there are the the

Playful idea that we were playing around with was proof of stake it would be 30 to business 32 million businesses that currently accept US dollars they would also agree to accept maybe that's where the government fits into this whole

Thing supporting them to accept it yeah that contraction happens of about 30 percent from what's in circulation now down into these businesses and from there we have our one thousand dollars sent to every single adult in the United

States and they are then going to use that to support these nodes that we I mean it could be Bank branches it could be people that apply like businesses that apply to to have like a fiduciary duty style thing where they're supposed

To help you get you know proposals together to ask the network for funding for things with like the lending component from the network not from them as a node validator or a bank they're literally just merely facilitating

People and citizens to extract and borrow from the entire system the entire network yeah and those people are voted on they can very quickly be removed and yes you know let's say they launder was that HSBC did like two billion dollars

For the cartel let's say SBC Fargo scam accounts that's right Wells Fargo gets caught boom the news comes out and they get ratcheted down on the list in the amount that they are able to receive from the

Network for governance because they've lost votes because in you we decided we didn't want to support them anymore because they were doing some scumbag hurry and then the value creation piece that you came up with

Would really really help psychologically where people are spending that money making that dollar strong and hard money because they then they know it's fixed they know that wherever they're spending that money will give them like the

Stability because if if you are making a million dollars a year off of your YouTube channel and I support you with a thousand dollars I would then in in theory get some benefit for supporting you because I thought about where I was

Putting that money absolutely I mean the incentive there is it stops people from because I think an issue now is is so many people either contribute money to like to tell you to vanity I mean we're all guilty of that just because it's the

Way the world works but also people live their whole lives like sitting on cash like sitting on money that is because of the nature of the system devaluing over a period of time and it just refer the reinforces the lack of economic growth

In addition to inflation so it's like a double whammy and it's a vicious cycle so if you put the incentive on people within reason spending to create value and you make that the focus of the economy and you reward people for doing

That then I think you see small businesses flourish and you see you know groups that actually create value start earning and as they should yeah it's all theoretical obviously because people do weird stuff but I think it would be

Really cool yeah and even even with us as an example and icon and some of these DPOs delegated proof state concepts you know they had flaws as a lot of flaws had almost immediately humans got put into it yeah you can't you can't ever

Predict what every person's gonna do and how they're like no probabilistic model or you know conceptual simulation is going to tell you how people are going to react when it's real and there's real dollars

And cents at least that's the way people think about it or real tokens on the line yeah because in in one of the most interesting learnings from AOS at least that I took away was the cartels forming around exchanges where if I had an

Exchange and you had an exchange with a huge bag of Eos mm-hmm just go and be number one we could vote for ourselves have all of our users vote for us and we would be at the top and then once we're at the top you and me we're gonna stay

In power because we're gonna vote for each other with our our communities I'm gonna say yeah we're gonna say at the top with both of our huge bags of of this currency so the transparency aspect changes that with voting allowing people

To in a way get negatively dinged when they vote for someone that is found out to have like malicious intent and you don't want to support something that you haven't done research on you don't understand and there are a lot of really

Interesting incentives to prevent people from staying in power like that now where it can negatively infect you there in fact you have effect yeah too soon Steve that's who sued brown on my mind honestly and so it can negatively infect

Slash affect you if you voted on those people those quote-unquote institutions slash nodes but yeah that's that's my my thoughts on it and I love that you know we kind of came together and thought about all this and yeah it's fun to talk

About yeah it's it's hard times crazy times so I think it's important to have a little fun like this yeah I mean I think about it too like it I think about how much great content is being created during this time how much how many bit

How many businesses are going to be cooked up during this like idle hands time you know the Contra Knorr the entrepreneurial spirit is gonna stop here I think this is a great catalyst for a lot of news new business

To come definitely looking at the glass Apfel is is very important and this is it's hard for everybody so everybody's all in the same boat in terms of slowdown and everything and what's coming so I think it's important for

Kind of a unity aspect that everybody feels heals it together yeah I'm totally with you and in terms of a digital dollar we were speaking about it too before there are there are teams working on it most notably we were looking at

The digital dollar project which is like a formal organization I think originally it was headed off and started by Chris Giancarlo it was like a former chairman of the CFTC so someone who's intimately aware of how the economy works and how

The u.s. handles monetary policy so I mean that's interesting regardless of how you feel about government's involvement in this I think that fact that it's being discussed at that level and from people who are who were at a

Really high level within the government is a good good thing for the space mm-hmm and actually the reason that we started talking about it originally was I had sent you an article about the the person from coinbase that was going to

What part were they going to I think they're going to was the chief legal officer right yeah yes being like heading off part of the task force at the over with minuchin yeah at the Fed yep yeah which is huge I mean that when

I read that I was like seriously I thought that was I actually thought that that was a total joke but it it's real so I mean we're starting to find the inter interwoven nests I guess that that is a word between the crypto space and

What the crypto space stands for in this time this just reinvigorates the value prop for what this is about because I think for the first time that I can remember in a long time we're now talking about

Deflationary currency sound money mm-hmm digital like digital token-based money that's not just a lever of button an Excel spreadsheet that you can change your value on things done that's transparent and I think now people in

The government are like actually that would be nice you know that that makes sense yeah and I think that's a good thing people and people who are so anti crypto I think at least understand the ethos of what it's about and they're

Saying hey you know what I'm not totally against that yeah and also very similar to Libre if a digital dollar happened it would be a good thing in that it creates interest that creates people looking into Bitcoin it creates all of this like

Creative juices where people are thinking about hey what is a digital doll or other than just numbers on the screen what is it backed by what is all this and there's going to be tons of

Information about cryptography around it if and when it does happen and it just sparks this whole brilliant conversation about Bitcoin again I'm totally with you men so I'm looking I'm looking forward to the future regardless of where we're

At now yeah positivity positivity cool management vibes always well this was a lot of fun as usual heck yeah man will do will do as many videos as we can especially as quarantine continues we need all the content we can get that's

Right that's right need some social interaction seriously man get out yet zoom get a get a zoom zoom account and just hang out with your friends on Zoom watch a movie that's right all right well thanks again for us

This was a lot of fun man absolutely Steve thanks man and everybody stay safe Cheers that is it for my interview with her show she and if you guys want to check out his channel the link will be in the description below go give it a

Subscribe he's covering pretty much everything there is about blockchain technology from a development perspective and just really really doing a great job of simplifying even better than I can on many projects simplifying

It down and helping educate people just like we do here the hacked crypto channel so that is it for this episode I hope you guys liked it if you did slap a like if you guys are brand new here don't forget to

Subscribe for all these giveaways all these interviews all this amazing content that's rolling out very soon here and I will see you guys on the next episode of pack rip double

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