A better conversation is whether IMF/credit scores deserve to exist in the first place. Didn't these geniuses JUST add field-specific search to SWIFT, so orders for "cubanos" don't get held up because of Cuba sanctions?
Maybe these clueless old men should stick to what they know - mountains of physical paperwork and pointless policies and procedures, and stay away from anything that uses electricity or internet.
Bitcon/DeFi will render them obsolete in a few years' time anyway.
>A better conversation is whether IMF/credit scores deserve to exist in the first place
>Bitcon/DeFi will render them obsolete in a few years' time anyway.
Credit scores exist because banks want to know how likely they're going to get their money back. I'm not sure how that'd be replaced with "bitcoin/difi". Most of the "loans" I see are difi are either flash loans or overcolateralized loans, which have limited application to typical consumer loans (eg. car loan or mortgage).
Can an autonomous bot on some smart contract have a credit score? Why is credit a privilege only humans can enjoy?
We should be able to spool up a persistent pseudonym that can have a credit score based solely on its selectively disclosed transaction history since inception.
If we screw up the credit score of that pseudonym, we should be able to create another and another. The market decides what score to give based whatever factor it feels relavant, which should result in abuse prevention over the long term.
>Can an autonomous bot on some smart contract have a credit score? Why is credit a privilege only humans can enjoy?
companies and even countries can have credit scores, so it's not something that "only humans can enjoy".
>We should be able to spool up a persistent pseudonym that can have a credit score based solely on its selectively disclosed transaction history since inception.
Part of what gives credit scores value is that you only have one identity, so you can't create burner accounts and default all the loans on them.
>The market decides what score to give based whatever factor it feels relavant, which should result in abuse prevention over the long term.
The market will react by treating pseudonyms the same way websites treat tor exit nodes: with extreme suspicion. Using a pseudonym with little history and/or "real" identity tied to it would essentially put you in the "default imminent" category of credit ratings.
The reason I'm keen about pseudonyms is because by detaching real-world identities from credit requirements, we can greatly improve access to finance.
If new pseudonyms are treated with extreme suspicion then so be it, but there should be a way for the pseudonym to progress from there solely through transactional behavior.
Even if the amount of credit the market becomes comfortable with through this scheme is $100, that could make a big difference in developing countries.
If someone is operating under a pseudonym and can walk away from it, you're playing an iterated prisoner's dilemma where one party knows on what turn they will defect and the other doesn't.
With real identities, the iteration only ends in the death of one party, the timing of which is seldom known to anyone (although will statistically be taken into account).
this but with real identity. it should not be that you are only who government says you are. days are past when you can move to a new place under new name and have no issue and government not know difference.
> A better conversation is whether IMF/credit scores deserve to exist in the first place.
You're right about this. People's access to necessities like housing shouldn't depend on whether they are making money for the finance industry. And developing countries' access to the resources needed to improve the quality of life of their citizens shouldn't depend on making the development process profitable to US/European institutions.
> Bitcon/DeFi will render them obsolete in a few years' time anyway.
Unlikely. Bitcoin and other proof of work systems are likely to be banned in many places because of their environmental impact. And systems that survive that are likely to be banned as vehicles for financial fraud. The future of blockchain currencies is probably in making transactions more traceable to shut down tax avoidance schemes.
> > A better conversation is whether IMF/credit scores deserve to exist in the first place.
> You're right about this. People's access to necessities like housing shouldn't depend on whether they are making money for the finance industry. And developing countries' access to the resources needed to improve the quality of life of their citizens shouldn't depend on making the development process profitable to US/European institutions.
While there's definitely issues with how credit scores are implemented, it's absolutely essential for something like them to exist. People who habitually default on their debts shouldn't be able to keep borrowing money as easily as the rest of us.
I mean, that's exactly what the opaque number is trying to do - typically you have some thresholds, below X deny the loan request, above Y approve, in the gray area review.. The number will have some complex weighting, but I'm not sure how you get away from assigning a score if you want to make an automated decision.
The IMF, at least in its current form, shouldn't exist. The only way it can work is if artificial or instigated crises are periodically created to extract wealth from (or covertly tax) the masses so it can be redistributed to nations and NGOs that may or may not be risky lendees.
Credit scores might be a good idea in some respect but it shouldn't be possible for anyone but lenders and the individuals those scores represent, and they should only ever cover whether the person or organization is a good or bad risk for loaning them money or credit. Employers and landlords should never be able to know what your credit score is. At best they should know about your employment history, but if they want your credit score then they might as well ask what shows you watch on Netflix or if you look at porn, you know, for moral reasons.
Hopefully the system will be kept in check by decentralized tech, but who knows how long it will be before social credit will bar you from using the same internet as everyone else.
The IMF and the World Bank serve an important purpose. They provide a great standard of living to otherwise unemployable economists and policy analysts.
Therefore, regardless of how many people they kill, and, yes, they have killed people due to statistics and economics illiteracy combined with blind career ambition, they will continue to be around for a long time.
> Bitcon/DeFi will render them obsolete in a few years' time anyway.
(I am assuming "Bitcon" is a typo for "Bitcoin" rather than some new cryptocurrency or blockchain thing I have not heard of).
This reminds me of a question someone once asked Miss Manners:
> Dear Miss Manners:
> Don't you think that nowadays, in modern life, the old-fashioned custom of the condolence call is out of date?
> Gentle Reader:
> Why it that? Is it because people don't die anymore, or is it because the bereaved no longer need the comfort of their friends? Miss Manners is always interested in hearing about how life has been improved by modern thinking or technology.
People lending money via Bitcoin/DeFi or any other mechanism now or in the future are still going to want a way to estimate the risks that the borrower will be able to pay back the loan on schedule.
Living in country where we don't have credit score it always seemed massive black box with very strange incentives... Here the loaning is based on income, other loans and possibly registry of past failed payments.
I'm not really sure if more than last one is needed, maybe some overall registry of how much money single person has lend and what part is unguaranteed of it...
Credit score to my understanding is some magic number that can be effect by things like someone querying it... Which seems quite weird and opaque... But in sense component of negative credit score is a thing. And I don't think it should go any further...
Maybe these clueless old men should stick to what they know - mountains of physical paperwork and pointless policies and procedures, and stay away from anything that uses electricity or internet.
Bitcon/DeFi will render them obsolete in a few years' time anyway.