Bitcoin Forum

Hi,

I invest in Bitcoin but this article concerns me a little:

 http://observer.com/2016/06/fedcoin/  (http://observer.com/2016/06/fedcoin/)

Putting the tinfoil hat on for a second, let's say that Satoshi worked for a government.  And let's say that government, before issuing it's own digital currency or Fedcoin wanted to see how Bitcoin played out in the marketplace.  If governments started issuing their own digital currency, wouldnt that truly be the death of bitcoin? Thoughts?

Tough crowd

Yea I saw that article earlier and personally I don't think it's such a bad idea. Okay it's not going to be decentralized and anonymous but it'll still be an improvement over the current system. You should still be able to send money worldwide at almost no cost. It'll even have a couple of advantages over Bitcoin, stability and insurance. I don't think it would necessarily "kill" Bitcoin though, those who prefer decentralization would probably still use Bitcoin. In the end it'll be up to each and everyone to choose for themselves.

If the government was to start issuing its own cryptocurrency(ies), it most likely wouldn't be the end of Bitcoin because it's just like today's fiat, with a majority of it being digital and trans-actable that way. A government-issued crypto would also likely operate on the same concepts and basis as fiat does, so it brings nothing new to the table.

What makes Bitcoin "special" is that it has a lot of security, a fair amount of anonymity, and is appreciating because there is a limit to the entire supply that everyone knows. A Fedcoin would never have a hard cap, even if they claim it would, because inflation is a necessary tool for most governments.

A Fedcoin would merely inconvenience the general public, and be mostly ignored by current crypto investors, and thus it would likely have a minimal impact overall, but this is just speculation.

Great points.  Thank you.

I disagree. I think it would actually be the opposite and appeal to the masses. The masses need stability and security, they don't need anonymity or care about decentralization. The Bitcoin crowd has ideals that go against the system and this requires a very particular mindset. It's hard for regular people to stand up to the government, when you have a family you can't afford to be reckless because the stance you take bears down on your whole family regardless of how they feel about your convictions.

I'd have to agree.  Great response.

Your tinfoil hat theory makes no sense. Fedcoin will be a centralized piece of shit, so why would give the people the ability to use the decentralized version? no need to worry, Bitcoin already won this battle.

I guess I wasn't clear enough with my original statement; there is no need for a government-issued cryptocurrency considering we have today's fiat system. A Fedcoin would inconvenience the public because it would most likely change nothing but the brand and make people convert away from something they already have, which works fine for them. The public has no need for it, and the current fiat system satisfies most people already. We don't think it is stable or secure, or some people do, but for everyone else they simply don't care, and thus they wouldn't need a Fedcoin. If people really cared about cryptocurrencies, we'd see larger growth numbers, even if people don't buy anything, the community would grow larger. The anti-guberment crowd would hopefully have been drowned out by a larger majority of "normal" people.

A Fedcoin would, when designed with control in mind, would be a near copy-paste of the fiat system, but it would be far more transparent (for a select few) and there would be more direct government control. A fiat system is preferable in this scenario, in my opinion.

Ahhhh. Gotcha!

First, the FED is not (really) government owned.
Who owns the Federal Reserve? (https://www.federalreserve.gov/faqs/about_14986.htm):

I think it may give a huge boost to Bitcoin if a large institution like the FED creates its own! A new altcoin to push the whole cryptocurrency market into mass adoption.
How cool would it be to scan a QR-code in the shop, pay with your X-coins, which are directly taken out of your bank account? Without having to worry about an exchange rate that is different every day?

On the other hand, a stable value instead of a continued increase in value, would mean it's not interesting for speculation. And a large part of Bitcoin's popularity comes from speculation.

even us issued its own digital currency there will be no problem for bitcoin as it may increase value of bitcoin as bitcoin will still be decentralized currency where as those currency issued by government will be centralized one.

I don't think fedcoin will have its own block chain. That wouldn't make sense. My prediction is that it will be Fed-backed token on Ethereum, Ripple, or Counterparty.

Nope.

Bitcoin is the original, the best. You could have something like fedcoin, but most probably it'll be backed by a local currency. Bitcoin is international, with no borders.

they can not copy

you know there are already many coins

like LTB

How could it possibly be a copy paste of the fiat system? It would be an improvement over fiat in every possible way, I think you missed my first comment. Progress does not necessarily mean radical change, improving upon an old system is still moving forward. And it wouldn't even be "competing" with Bitcoin. People are happy with fiat right now but if the government itself issued a new more efficient currency, they would most definitely migrate, why wouldn't they, it would be the same as fiat but better with lower fees. They're not flocking to Bitcoin because it offers no security or insurance. If the 10k worth of Bitcoin you've worked so hard to save drops to 5k overnight, you're basically screwed and that's it.

My opinion was that is that even if central bank copies bitcoin, It will not die because many attempted it and they still have not dethroned bitcoin. Because of that I think bitcoin will still rule even if the central bank copies bitcoin.