Did you know the significant difference between Bitcoin and CBDC

[elevates]

As per my knowledge, some countries have already launched CBDC. If I am correct there are in total of 10 countries that have launched CBDC & 105 countries are exploring its possibilities. Each country has its own version or reason for launching it. One of the most common reasons is to stop its citizens from adopting Bitcoin . I don't know how but It's okay for me if they believe Bitcoin adoption can be halted with CBDC.

I am sure most of us are aware of CBDC if not then I will try my level best to explain it to you in simple words.

What is CBDC?

CBDC stands for "Central Bank Digital Currency", It is essentially a digital representation of regional fiat money, which is created and managed by central banks which means it is controlled & operated by the local government.

In every aspect, Bitcoin is far superior to CBDC as per me and many here would also agree but most governments across the globe do not think like us. They have either branded it as a threat to their country's security or have tried to frame it as currency for illegal activities.  

My understanding in this matter is that yes, Bitcoin has been used for illegal activities but it is far lesser to what fiat currency has been used if we look into it in the past. To date, there is much news on the mainstream media to support my narrative about fiat being used for all kinds of illegal activities.  

Now, the question that popped up in my mind was:

Did counterfeiting of fiat currency stop?

The answer is a big "NO". You can do you search on Google and you will find your answer. Then the next question that popped up in my mind was

Can CBDC be counterfieted?

The answer is a big "YES". Then I started thinking about how a digital asset can be copied. My understanding of digital asset copying was like copying mp3 or mp4 copying but Bitcoin cannot be copied then how CBDC which is based on the blockchain can be copied or counterfeited? The answer was simple!
  
How CBDC can be counterfeited?  

I was going through a journal by federalreserve.gov and found out one of the biggest security threat for CBDC is the prevention of counterfeiting. In simple words, anyone can buy CBDC using a fiat currency or a counterfeited one. If someone is able to buy CBDC using counterfeited fiat currency then it will destroy the whole purpose of CBDC.


You need to read the full article to understand the scale of a security issue with CBDC and then just compare it with Bitcoin and you will feel relaxed and understand how much taxpayer money is getting wasted in creating CBDC with false hype as well as narrative.

To an extent I would always praise financial institutions for funding projects and the government is initiating them in order to keep a grip on the finance of local households but they should know it won't help as the future cannot be unfolded or controlled.

[Doan9269]

The major difference is that CBDC is a digital fiat which is centralized having it controlled by financial institutions and government while bitcoin is a cryptocurrency that is decentralized and designed to work on a p2p network on the blockchain, the only similarity they may tend to share is from the word digital and nothing more, but they were two different currencies with different mode of operations and bitcoin is currently the most trending digital form of money in cryptocurrency today.

[Charles-Tim]

About the superiority of bitcoin, that is definitely correct.

In simple words, anyone can buy CBDC using fiat currency. If the fiat currency used here to purchase CBDC is counterfeited then it will destroy the whole purpose of CBDC.

All I could think of CBDCs is that the government is having more control because it is fiat, but about counterfeit form of CBDCs, I do not think it is possible if you use the government issue CBDC wallet.

There are ways scammers can use to scam people, but CBDCs are not counterfeits.

but they were two different currencies with different mode of operations and bitcoin is currently the most trending digital form of money in cryptocurrency today.

Yes, and CBDCs are not cryptocurrencies, they are just fiat and nothing more.

[Coyster]

In simple words, anyone can buy CBDC using a fiat currency or a counterfeited one. If someone is able to buy CBDC using counterfeited fiat currency then it will destroy the whole purpose of CBDC.

If we use Bitcoin in the same example you gave, you'd understand that you aren't correct here. If you arrange a physical meeting with a Bitcoin buyer because you want to receive payment in physical cash, if after you send the buyer their Bitcoin, and unknowing to you they pay you with a counterfeit fiat currency, it doesn't mean that the sold Bitcoin was counterfeit, or rather double spent (in the correct terms).

Having said that, scammers would obviously try to exploit everything, people try to double spend Bitcoin, but the network is safe, and merchants have learnt to wait for at least 3 confirmations to be certain. The difference between Bitcoin and CBDC's here is that whilst Bitcoin is secure in a decentralized way, without any central authority, CBDC's would be protected by the issuing government and through that means they would be able to trace the people who use it, thus zero privacy for its users.

[Yogee]

Can CBDC be counterfieted?

The answer is a big "YES". Then I started thinking about how a digital asset can be copied. My understanding of digital asset copying was like copying mp3 or mp4 copying but Bitcoin cannot be copied then how CBDC which is based on the blockchain can be copied or counterfeited? The answer was simple!
  
How CBDC can be counterfeited?  

I was going through a journal by federalreserve.gov and found out one of the biggest security threat for CBDC is the prevention of counterfeiting. In simple words, anyone can buy CBDC using a fiat currency or a counterfeited one. If someone is able to buy CBDC using counterfeited fiat currency then it will destroy the whole purpose of CBDC.

I think you're stretching this too much. Successfully converting a fake fiat into a CBDC doesn't destroy the WHOLE purpose of the digital currency. If I'm to use the same logic then it's like saying that the purpose of a bank is completely ruined if a counterfeit manages to enter their safe or vault. It doesn't stop these banks from operating since there are still security measures in place to prevent it from happening or procedures to minimize the effect of such blunder.

[pakhitheboss]

I think you're stretching this too much. Successfully converting a fake fiat into a CBDC doesn't destroy the WHOLE purpose of the digital currency. If I'm to use the same logic then it's like saying that the purpose of a bank is completely ruined if a counterfeit manages to enter their safe or vault. It doesn't stop these banks from operating since there are still security measures in place to prevent it from happening or procedures to minimize the effect of such blunder.

The purpose of banks is questionable from the day they came into existence. What OP said is correct, the purpose of CBDC is to simply create an environment that is suitable to again to gain confidence and provide financial stability among local citizens.

While there are many potential options for designing and implementing a CBDC, one important consideration that spans all the approaches is security. Like cash and conventional electronic payment systems, security considerations for a CBDC include the prevention of counterfeiting, fraud, and double spending. Given the likely importance of a CBDC to a jurisdiction's financial system and broader economy, other security considerations include anti-money laundering and countering the financing of terrorism, consumer protection, and financial stability.

I am quoting the above from the link shared by OP. CBDC is compared with Bitcoin by governments around the world with their local population as the best option against Bitcoin. The best they can say it is supported by the chosen government (as per democracy). As per my understanding, CBDC is nothing more than a local fiat currency with lots of loopholes. Whereas Bitcoin does not have those loopholes.

[Yogee]

I think you're stretching this too much. Successfully converting a fake fiat into a CBDC doesn't destroy the WHOLE purpose of the digital currency. If I'm to use the same logic then it's like saying that the purpose of a bank is completely ruined if a counterfeit manages to enter their safe or vault. It doesn't stop these banks from operating since there are still security measures in place to prevent it from happening or procedures to minimize the effect of such blunder.

The purpose of banks is questionable from the day they came into existence. What OP said is correct, the purpose of CBDC is to simply create an environment that is suitable to again to gain confidence and provide financial stability among local citizens.

You are probably missing the point. The purpose of CBDC that the OP is focusing on in that particular part that I quoted is the prevention of counterfeits. That's only where my argument is and not on whatever purpose you are talking about.

[Japinat]

How CBDC can be counterfeited?  

I was going through a journal by federalreserve.gov and found out one of the biggest security threat for CBDC is the prevention of counterfeiting. In simple words, anyone can buy CBDC using a fiat currency or a counterfeited one. If someone is able to buy CBDC using counterfeited fiat currency then it will destroy the whole purpose of CBDC.

If that is the case then I wouldn't be surprise at all if almost all people in its countries who launched their own CBDCs won't support their government because it has a much larger flaw and it's much more risky for the people who will invest on it. I mean, bitcoin and other cryptocurrencies are for sure not perfect but nobody can counterfeit it and that's just impossible to do. CBDC's are just like fiat, it's just a digital version of it, no changes at all.

People all over the world chose to entertain bitcoin for a reason despite of its risky volatility and that is because they wanted to own something that the government cannot control, touch, nor prevent them from doing it.

To distinguish the difference between Bitcoin and CBDCs, bitcoin is fully decentralized while the latter is fully centralized as the government controls it.