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When China and Other Big Countries Launch Cryptocurrencies, It Will Kick Off a Global Revolution (theconversation.com) 166

Posted by msmash from the shape-of-things-to-come dept.
There has been a massive rise in the number of bilateral agreements between central banks that allow two countries to swap currencies directly, a large number involving China. Meanwhile, a number of countries, including Germany and the Netherlands, have been repatriating their gold reserves from vaults in the US where they had long been stored. From a report: Yet by comparison, major sovereign digital currencies based on blockchain technology would be revolutionary. Blockchains are encrypted ledgers for storing information that are decentralized rather than being under any country's or company's control. When applied to international payments, this offers the prospect of much more transparent and cheaper transactions than SWIFT. It could cut the payments time lag from a couple of days to one second, and the cost from 0.01% to almost nothing. It will have the capacity to handle far higher volumes of payments, partly since they won't require bank accounts or even internet access.

Cryptocurrencies like Bitcoin and XRP have been a good experiment in using blockchains for international payments. Yet when countries issue equivalents of their own, these will have even more advantages. They will be backed by states, and completely decentralized cryptocurrencies like Bitcoin will not be able to compete with this. While technological change has been incredibly fast in the information era, the system of international payments has lagged behind. But once sovereign digital currencies start taking off, this will suddenly change. Just like smartphones quickly eliminated most old cell phones, no countries will be able to reject blockchain payments for long. So while, for example, the US Treasury Secretary Steve Mnuchin recently said that his country does not see itself launching a digital dollar in the next five years, there will be a moment when the political centre of gravity will shift and everyone will join the revolution. After the 5G network and the Internet of Things really mushroom in the next couple of years, it will be possible to replace the existing system even faster. This will be the beginning of a new international monetary era.
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When China and Other Big Countries Launch Cryptocurrencies, It Will Kick Off a Global Revolution More

When China and Other Big Countries Launch Cryptocurrencies, It Will Kick Off a Global Revolution

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  • 51% (Score:4, Insightful)

    by enriquevagu ( 1026480 ) on Friday December 13, 2019 @11:51AM (#59516236)

    Just saying...

  • Not again.

    • Re: (Score:2)

      by tricorn ( 199664 )

      Blockchain, IoT and 5G! How can that not be a smashing success!?

      If only they could add in some additional words, like Tru, Super, Plus++ and add social media features so heads of state can add emojis to their transactions, it would be strongly perfect!

      • A blockchain using processing power of IoT devices around the world and using 5G for communication. Buzzword win! (i already patented it, pay up :-D)

    • Re: (Score:2)

      by gweihir ( 88907 )

      Not again.

      As long as there are suckers taken in by the scam, we will have to suffer through this mind-melting bullshit.

  • Walk me through this (Score:3, Funny)

    by Lonng_Time_Lurker ( 6285236 ) on Friday December 13, 2019 @11:57AM (#59516252)

    1) decentralize currency with blockchain
    2) recentralize currency with state controlled block chain
    3) ?
    4) profit?

  • Why hasn't Slashdot published my submission yet? (Score:5, Funny)

    by Anonymous Coward on Friday December 13, 2019 @11:58AM (#59516258)
    Look in the Firehose. The headline is: When Pigs Fly, It Will Kick Off a Revolution in Aviation.

  • #1. Remove that goddam comma in the headline.

    #2. People who establish markets to trade all these currencies are going to make a fortune and I wish it was me.

  • Why do we keep getting stories pushing crypto faux-currency? Why would any government do this? They can already track large non cash transactions and large pure cash transactions are irrelevant because only coke lords do that. And how would a centralized government controlled crypto faux-currency be any different than the fiat currency stored in databases we already have? Block chain and especially crypto faux-currency are a solution in search of a problem they actually solve. Block chain has some limi

    • Re: (Score:2)

      by jythie ( 914043 )
      I think what the writer is picturing is countries moving their official currency to blockchain but leaving the ledger open so public farmers are still the driving force, so essentially the wet dream of governments going 'well, a bunch of smart net geeks say we don't need central banks anymore, so let us dismantle them and hand control over to the public ledger!'
      • Uh yeah which has zero benefits to any government and lots of downside like losing control of their currency. No country would ever consider doing this. It makes no sense. What is the benefit? The government won't have to pay a few thousand people to run the central bank in exchange for losing control of their economy? What? Small countries that want a stable currency pin their currency to the USD at 1:1, in effect declaring the USD is their currency. Large countries want to be able to print cash (or

        • Re: (Score:3)

          by jythie ( 914043 )
          Pretty much the only people this would benefit would be speculators who buy in to the currency before the switchover, which is probably why some crypto fanatics are so into this idea that in their echo chamber they treat it as unavoidable. "We WILL be vindicated and rich, we just need to wait fo the world to realize we were right!'.

        • Re: (Score:2)

          by lgw ( 121541 )

          and lots of downside like losing control of their currency.

          Why would you think that? Do you think the Fed controls the money supply by controlling the amount of physical printed currency? Money is a bunch of ledger entries, and the size of that pool isn't tied to the size of the pool of the underlying physical currency, whether dollar bills, gold coins, cows, or BTC.

          • Uh... if we're going to say all transactions go through a crypto faux-currency system then, what underlying system of transaction can you possibly have outside that system? If you inject a billion dollars into the economy and the economy is pure faux-coin then yes, they have to be faux-coins created. By definition. If not, then what's the point in having or claiming your economy is faux-coined based when faux-coins would then just be one more way of doing transactions but not required?

            • Re: (Score:2)

              by lgw ( 121541 )

              When you deposit 100 BTC with a bank, the bank will immediately loan out that 100 BTC. Normal BTC transaction from you to the bank. Normal BTC transaction from the bank to someone selling a house (well, their mortgage company or bank). But your 100 BTC in savings is just a ledger entry, and the bank doesn't have your 100 BTC lying around to give back to you. Exactly like today.

              Thus the money supply has just increased despite no new BTC being created. And that guy selling the house is probably also buyi

      • Re: (Score:2)

        by Nidi62 ( 1525137 )

        What would obviously happen is that the government would keep control of the ledger to ensure maximum tax revenues (since they can track every single transaction), while the wealthiest/connected people simply move to a surrogate form of currency (or even a foreign currency) to transfer/preserve wealth. The little people will not win with a government backed digital currency as the primary method of payment.

        • That's exactly what already happens now. Government controlled crypto faux-currency will not change the tax situation by a single penny.
        • Oh also, all non cash transactions $10k or higher are already reported in the US. I don't know about other countries but they likely have similar reporting laws.

        • Re: (Score:2)

          by jythie ( 914043 )
          I actually doubt they would bother with using the ledger to maximize tax revenue. Taxes are already collected through voluntary reporting, and the details of what gets taxed how makes something like a plain ledger nearly useless without a huge amount of metadata associated with each transaction. Such a system would take away the government's ability to tax things differently, which is a key tool for both political and economic reasons, and NOT a tool they would be willing to give up.

    • Why do we keep getting stories pushing crypto faux-currency? Why would any government do this? They can already track large non cash transactions and large pure cash transactions are irrelevant because only coke lords do that. And how would a centralized government controlled crypto faux-currency be any different than the fiat currency stored in databases we already have? Block chain and especially crypto faux-currency are a solution in search of a problem they actually solve. Block chain has some limited real world purposes. One of them is -not- "currency" or a "storage mechanism of value". Crypto faux-currency solves nothing.

      You can read about the e-krona project by the swedish riksbank (central bank) in english here: https://www.riksbank.se/en-gb/... [riksbank.se] (both project reports in the linked article are also in english). Just to name one aspect is the possibility for the government to guarantee the transfer of money without using the banking system.

      • Re: Utter nonsense (Score:4)

        by Way Smarter Than You ( 6157664 ) on Friday December 13, 2019 @01:03PM (#59516528)
        And what is the benefit of the government not using the banking system? The government -is- the banking system. Banks in real countries are so highly regulated and work so closely with the government they might as well be government agencies. In some countries they are government agencies. Remind me again why a government would want to do this?

        • Because the payment system must work in a crisis. If the payment system is owned, controlled and managed by private actors like banks, it can not be guaranteed to work under stressed conditions like war or perhaps a financial crisis like the 2008 one.

          • What crisis? I shall repeat: the banks are pseudo private, at best. The government lets them do very little on their own and if there were some "crisis" (to be defined, this is a baffling comment but whatever), the government would have zero worry about completely taking over the banks directly if they felt it necessary. Again: please describe a world where governments find crypto faux-currency better than fiat.

  • Authoritarian wet dream (Score:4)

    by Nidi62 ( 1525137 ) on Friday December 13, 2019 @12:05PM (#59516284)

    Authoritarian states like China would love to switch to digital currencies: they could track every single transaction. Ditto for states like India or Greece where the cash economy is booming and tax evasion is the norm. And you still need something to back the currencies-ask Venezuela how well the petro went.

    Digital, government-backed currencies are not a good thing, for a variety of reasons.

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      Digital government (or powerful organization) backed currencies are a wonderful idea. They allow rapid transmission of money anywhere, fast transaction processing, etc.

      That's why the fing Knights Templar invented them in the twelfth century.

    • Re:Authoritarian wet dream (Score:4, Interesting)

      by ShanghaiBill ( 739463 ) on Friday December 13, 2019 @12:43PM (#59516440)

      Authoritarian states like China would love to switch to digital currencies: they could track every single transaction.

      China is already 99% digital. I was there for several weeks last year. Number of times I used cash: 0.

      Even the beggars on the street accept digital currency. They have a QR sticker on the corner of their sob-story sign. Just open your payments app, scan the QR code, type in how many RMB you want to donate, and click submit.

  • I take this article with a grain of salt. The whole lure of cryptocurrencies is that they're (more or less) tough to trace, just like cash, but can be used for remote payments. If a country like China is getting involved (or the US for that matter), you can be *certain* that those transactions will be traceable - this is going in the wrong direction from a user perspective.

    But then again, the author then breathlessly indicates 5G and IOT as "revolutionary" and then you realize that another know-nothing MB

  • Decentralization matters (Score:5, Insightful)

    by slashways ( 4172247 ) on Friday December 13, 2019 @12:10PM (#59516304)
    Censorship resistance, immutability and scarcity are emergent properties. Properties that emerge on Bitcoin as a global decentralized system. The Bitcoin network as a whole, is more than the sum of the parts. Bitcoin is a genuinely decentralized system, where people from different backgrounds, and with different goals, but all, following the 'don't trust verify' mindset, agree to follow the same set of rules written in the Bitcoin protocol. This is the reason why these emergent properties arise.

    Without decentralization, the properties are the same as a standard database. These properties can't be anything else as the properties we already have on a standard database managed by a central authority. People rely on fairy tales to expect a different outcome.

    Bitcoin is alone in this world as the only decentralized system solving The Byzantine Generals Problem.

    • Re:Decentralization matters (Score:5, Insightful)

      by ToTheStars ( 4807725 ) on Friday December 13, 2019 @01:20PM (#59516598)
      But Bitcoin isn't decentralized, not really -- mining is centralized into pools, and wallets and money-changing (because ultimately people want dollars or euros or tulip bulbs or other real money that's actually spendable) are centralized onto exchanges. Meanwhile, they use about 1,000 times as much electricity as Visa does while handling one-thousandth as many transactions.

      Bitcoin was decentralized for a time, but at the end of the day, it's subject to the same economies of scale and specialization that everything else is in the world.
  • Cruptocurrencies can't overcome government regulation any better than foreign currency, foreign money accounts or cold coins can. Getting the money between crypto and real economy is where traditional laws enter the picture. Any real world business dealing with money can't just say 'it's crypto' I don't know where it came for. They need to produce receipts and in some cases there is reverse burden of proof. Just read the anti-money laundering laws of you country and you realize that law enforcement and ta

    • Re: (Score:2)

      by jythie ( 914043 )
      A bunch of these people really hope that if they make tracking difficult enough governments will just throw up their arms in despair and stop collecting taxes. In their minds people are dishonest enough that any edge that the government can not trace 100% of the time must be nothing but people dodging taxes and forget that the majority of people report their income TO the government without any tracking needed.
  • Beyond the predictable criticisms about how this whole piece is just nonsense.. I am esp head-desky over the idea that blockchain will somehow be faster and cheaper than current payment systems. It is already glacially slow and expensive compared to existing systems at a tiny fraction of the volume, and the big beacons of hope from the community pretty much come down to 'if we replace blockchain with a conventional system owned by a private company and mirror it back now and then it will be faster!'
    • The censorship resistance, and the data immutability properties are at the Bitcoin level. And, only at the Bitcoin level. Because Bitcoin is a monetary, and neutral, protocol. These properties are a consequence of the economic incentives, and only of the economic incentives, and not from the under-laying database

    • I am esp head-desky over the idea that blockchain will somehow be faster and cheaper than current payment systems. It is already glacially slow and expensive compared to existing systems at a tiny fraction of the volume

      That's because you're looking at systems designed to be decentralized. But government-designed cryptocurrencies won't be like that.

  • If you think about it, government cryptocurrencies are inevitable because of the benefits they offer to government.

    When everyone has to give a DNA sample to get a wallet, it means government can easily track every dime spent without even having to convince a third party to let it see purchase records.

    But beyond that, is the ultimate tool - the ability to compute with complete accuracy your eventual contribution to thought crime X. That is to say, you bought a hammer from a store for $10, then from there th

    • DNA would not be the way to go, easy to duplicate.
      better would be an embedded chip in your hand, or it could be done in your head and that would be able to work as a phone.
      • Yeah, I think you were aiming at some sort of biblical reference or something, but that aside, the chip is WAY easier to duplicate than DNA.
        • Not if you go with a public/private key infrastructure. Do you worry about handing your credit card to someone.
          companies are already working on it, easy to implement it with a system similar to apple watch..
  • This can't be about anything else.
    I get shouted down every time I say this, and I'll get shouted down for it now, but fuck the haters: 'cryptocurrency' has always been used primarily for bad things. First for criminals to hide their actitivies, and now big authoritarian dictatorial human-rights-ignoring governments like China will leverage it to tighen their grip on the millisecond-by-millisecond lives of the Chinese people.
    Do you live in a first-world country that believes in human rights, civil rights,

  • When China and Other Big Countries Launch Cryptocurrencies, It Will Kick Off a Global Revolution

    And by "revolution" we mean "authoritarian nightmare".

    • That is one of the most common outcomes of a revolution.

      • That is one of the most common outcomes of a revolution.

        True, true. I guess the real question is, is that also the desired outcome by those at the top organizing the revolution? I think that you can make a compelling argument for the affirmative case.

  • the rest of the world (Score:3)

    by FudRucker ( 866063 ) on Friday December 13, 2019 @12:59PM (#59516522)
    wants to kick the USD PetroDollar to the curb
    • The rest of the world has two choices. First, trust each other and create a mutual currency. Two, shut up and use the U.S. dollar. They may not like Uncle Sam but they trust him more than each other.

      • Re: (Score:2)

        by sinij ( 911942 )

        The rest of the world has two choices. First, trust each other and create a mutual currency. Two, shut up and use the U.S. dollar. They may not like Uncle Sam but they trust him more than each other.

        Each other includes known-bad actors like China and Russia. Imagine if Russia had ability to print EUs. It would be like that.

      • They could also switch to Euros but that didn't work out so well for Iraq...

  • Gawd... what marketing tool wrote this? 5G = line of sight - meaning only financially feasible in dense populations. IoT, = internet of Insecure Things. Lets have more unpatched crap plugged in everywhere.
    The reality is "IF" and I do say "IF" globally banks go to a digital currency, the world may ditch the dollar as the global currency. Going off the dollar as global currency will result in an immediate and deep US depression which will domino into a major global depression.

  • Not going to happen soon: Governments really, really like fiat currencies. Why? Control over the currency allows the government to control the money supply, enabling ways of stimulating growth and controlling inflation. Blockchain based distributed currencies like bitcoin would necessarily mean that governments would give up that control. It's similar to a gold or silver standard. Some people might think that's a good thing, but I would argue that the world economy has been far more stable since g

    • Blockchain would be used, but would not be anonymous, government could see all transactions for taxation, investigations, demographic stats, etc.

      The hype in this article's summary is naive and ignorant

  • I know they would. They've stolen from me before, why would this be different?

  • 2020 is the year of cryptocurrency on the desktop! The revolution is coming!

    Any time now...

  • Ignorant prattle: taxation, crime investigation, analytics... all these things and more the government will demand of any currency system. None of the imagined benefits will happen even if a blockchain system is used, and there are far better distributed database systems with integrity verification than blockchain based ones.

    no revolution coming, no privacy.

  • This fluff piece is nothing but a cryptocurrancy cheerleader shouting "YOU RA RA!!"

  • If any player that matters does this, there will not be any advantages for ordinary people. There will be disadvantages, such as tracking money-flows becoming or generating spending profiles for people far easier. Anybody that believes differently is deluded. The only possible advantage some cryptographic currencies have is anonymity (not really good anonymity these days, but that can improve). No major financial player will ever allow that in as a feature in anything they support.

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