A digital rupee will need to do everything a rupee can do. That includes foreign exchange.

Which means the digital wallet that holds digital rupees will have to facilitate trade against *other* national digital currencies.

In practice, this will likely be via crypto exchanges.
Put another way, a digital rupee won’t be closed off from the global economy.

To the contrary, it will be more freely traded for other assets, domestic *and* foreign, than the current quasi-digital rupees held on bank ledgers.

Just compare USDC to Fedwire to see the future.
Setting up a digital rupee & thinking it can be air-gapped from the cryptoeconomy is like setting up a website & thinking it will only link to itself. 🙂

A website’s value, in part, comes from its links. A currency’s value, in larger part, comes from its links to other assets.
Every asset class is going on-chain —interest, loans, derivatives, art — a phenomenon you can witness in real-time at defipulse.com.

One of the main value propositions of a national digital currency will be an on-ramp to this financial internet. Like stablecoins 2.0.
The less things you can buy with a currency, the less valuable it is. The more it will be sold, and the less it will be held.

This will drive nations over time to permit more use cases for their national digital currencies.

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with balajis.com

balajis.com Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @balajis

17 Mar
Video games somehow never fully broke through to the highest levels of culture, but NFTs did.
You might dispute the premise, as of course there are AAA games with serious plots and reviews. But the association with children playing and populist fun has sort of held games back.

NFT prices, by contrast, vault them into a kind of stratosphere. You can’t help but look up.
It may turn out that the presence of expensive verified NFTs is what distinguishes video games from virtual realities.
Read 6 tweets
12 Mar
The meme economy will become real.

- Meme creators will make NFTs
- Timestamps give proof-of-first
- Memegen partially goes on-chain
- Memetic spread is more traceable
- Memers become millionaires
- Risky art becomes uncensorable & monetizable
- Art moves outside regime control
If you’re building this, reply here and/or DM. Space is moving fast, working products preferred! Suggestions:

1) Focus solely on memes, just like Giphy focused solely on gifs.

2) Clone as much existing memegen-type UX as you need, your initial innovation may be mostly backend.
@Cryptanzee @BitcoinMemeHub @RonenV, figured you might be interested in this thread.
Read 5 tweets
12 Mar
Glenn and @Snowden were early advocates for encryption to defend human rights against abusive corporations & states alike.

Satoshi was a pioneer in the use of encryption to stop seizures by the same corporations & states.

These are two halves of the same worldview. 🧵
They coincide exactly, because the private keys to *publish* online are the same as the private keys to *transact* online.

The same censorship-resistant blockchain design that prevents seizure of private property also prevents states & corporations from silencing your voice.
When you digitally sign and broadcast a transaction to a blockchain, it is sometimes referred to as *publishing* a transaction.

With the right design, this gives you pseudonymous, verifiable, uncensorable communication and transaction. Free speech and free markets in one stroke.
Read 4 tweets
8 Mar
Blockchains are much easier to search index than the open web, which is in turn easier than closed social networks.

And GPT-3 can generate better-than-search results on the fly.

So, it sounds cliche, but “blockchain and AI” really are a long-term pincer attack on Google Search.
Why are blockchains easier to index than the web? They have a single canonical endpoint & all records are in the same format. Just need to keep chain tip fresh.

Far easier than crawling the menagerie of web pages.

Which is in turn easier than getting full Twitter API access!
Why can GPT-3 (or sequels) generate better-than-search results?

It also takes a search index as input (Common Crawl), but it doesn’t just present you 10 blue links.

It does the synthesis for you, and may eventually be able to do it offline just with learned parameters.
Read 5 tweets
7 Mar
v1: the free market
v2: there is always a marketplace operator, whether Airbnb or USG
v3: the free market in markets
When you build a two-sided marketplace or scaled social app, you take on many roles of a government.

Indeed, setting parameters for millions is also a kind of policy making, enforced digitally rather than physically.

But the feedback on error is exit/wallet, more than ballot.
Today, digital punishments like deplatforming are controversial because they are done arbitrarily, by private actors, outside color of law.

Tomorrow, pre-agreed digital punishments may be considered more humane than physical punishments, as more & more state functions go online.
Read 7 tweets
6 Mar
Disagree. By associating money with a private key, you give a literal incentive for every user to keep the key (a) private and (b) available at all times.

That’s the fundamental issue that previous PKI schemes didn’t solve at the individual level.
If you pin a post-it note with your private key to your computer, that’s available but not private.

If you write it down & keep it in a safe place whose location you forget, that’s private but not available.

So, for individuals, private AND available key storage is nontrivial.
Another way of putting it: private and available key storage for individuals is *expensive*, especially in attention terms.

Pre-crypto PKI could incentivize *organizations* to keep their keys private and available, but not individuals.

Cost wasn’t worth benefit. Till crypto.
Read 5 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!