[Cryptography] Our leader opines on cryptocurrencies

Jon Callas jon at callas.org
Sat Jul 20 23:14:20 EDT 2019

> On Jul 19, 2019, at 9:56 PM, John Levine <johnl at iecc.com> wrote:
> In article <CAKco+gzZYuhQbLmPCWteVbhYjw_FyfiMZ4gwPcKrLzr+nq3oMQ at mail.gmail.com> you write:
>> So, Libra is indeed a massive threat to USD as the dominant currency of the
>> world. Right now, USD is the easiest currency to move around the world,
>> accepted almost anywhere at face value with the best exchange rates. Libra
>> is a massive threat to this status, and also remember that it is backed not
>> just by USD but a combination of currencies, which gives it even more
>> transactional power.
> I fear that some people may be a little weak on scale issues.  There is about $1.7 trillion
> in US cash in circulation, and about $14 trillion in bank deposits.  I will eat my hat if
> Libra ever has a total cap of $10 billion, which would be 0.08% of US bank deposits.
> Master Card can process 38,000 transactions per second, and Visa about
> the same.  Good luck doing that with a blockchain, even a closed
> non-PoW one.
> I can imagine a variety of reaons that Libra is a bad idea, but wholesale replacement
> of the USD is not one of them.

I had a raised eyebrow, too. I know there's a *lot* of US dollars just lying around in one form or another. There's billions in change lying in drawers. There's less now than there has been historically. Those change machines in grocery stores, etc. put so much old coinage back into circulation that some number of years ago, the Mint furloughed 200 people because they didn't need to mint as much coinage. I spent a few minutes trying to search out a reasonable number and didn't get it. However, I did find that according to a 2011 article, there is/was $1.2 billion in dollar coins sitting around in banks, and that article says, "Officials expect the number of dollar coins sitting in storage to grow to $2 billion by 2016."

There's also a boatload of money sitting around internationally in $100 bills. I have no idea how much, but I'm sure it's huge on this scale, as well. If someone has numbers, please reply.

If the number of dollar coins sitting in the banking system's equivalent of the loose change urn on my dresser is 1/5 the way to a reasonable hat-eating bet, the scale here is the important issue. 


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