Why IMO the focus needs to be on settlement and governments (and not on coffees)

[CIYAM]

It appears that most of the (more vocal) forum members here don't think that "Satoshi's stash" is a big reason for governments to not want to use Bitcoin as a "Gold 2.0" (https://bitcointalk.org/index.php?topic=1343072.0) and maybe that what is most important is the promise to keep the supply fixed at 21M.

But I think the announcement made by the PBOC that China is considering to soon release its own "nationalised" digital currency should be something of a wake-up call (http://www.cnbc.com/2016/01/20/chinas-central-bank-plans-to-launch-its-own-digital-currencies.html).

I had predicted such a thing might happen back in December of 2012 (https://bitcointalk.org/index.php?topic=129047.0) and now it looks as though this might be actually starting to happen (and no I am not working with the PBOC so don't blame me for anything other than that old topic).

I guess the question is whether or not they will fix the supply limit. If they don't then Bitcoin still has its advantage - but if they do then I think Bitcoin is going to have a big problem.

If you can buy a digital gold equivalent without any hassle (or much of a fee) from your local bank then are you going to be as motivated to want to buy into Bitcoin?

This problem will get worse if multiple countries decide to do the same thing (creating protection for their national savings from being moved offshore).

If there is little motivation to even have Bitcoin because there are local digital scarcities available that are government backed and supported then I think the arguments for being able to buy coffees for Bitcoin become simply irrelevant.

Am interested in relevant opinions but not ad sig rubbish posts or plain rubbish posts (will delete all of those).

[pereira4]

The fun fact is Bitcoin is impossible to scale globally at "coffee levels" without a secondary layer like LN. No matter how big you make the blocksize, it would never be as fast, and as efficient as LN.

Therefore, we might as well turn on-blockchain transaction into a settlement network while dealing with "coffee" type transactions through LN.
Doing this, we can defend from goverment intervention, which should be our top priority now, and not trying to be nice to them. If governments could choose, they would love that people demand "coffee-level" transactions to be all on-blockchain transactions so they can benefit from having centralized nodes to control the network. On the other hand, they would never be able to control a conservative-sized block network since this would allow for massive node decentralization.

This thing has been very clear to me for a while, but it seems a lot of people can't deal with the fact we need layers like LN to deal with massive amount of transactions and raising the blocksize 1MB up or down is just a cop out.

[Jet Cash]

I think that China will try to control the Phoenix currency, and that is why they started the AIIB. The Phoenix currency is the global currency that will rise from the ashes of the failed fiat currencies. It is independent of Bitcoin.

[CIYAM]

I am not sure what the Phoenix currency has to do with this but if we assume that the PBOC digital currency is that then its purpose would basically be for usage within China (the main thing that the central government cares about is stopping the flow of money out of China).

Westerners might actually be surprised that the Chinese government actually supports people buying gold or silver (you can do so at any major bank) so I don't see that they would be worried to create their own digital commodity.

The whole "money is debt" thinking is actually a western way of thinking (people rarely take out loans even for housing in China).

[AgentofCoin]

The Chinese government digital currency, I would very much bet, will be everything bitcoin is not.
It will be seize-able, blacklist-able, cap change-able, backdoor-able, control-able, and etc.
The Chinese government will directly use it to oppress its citizens.

In a future world of accepted digital currencies, including nationally approved digital currencies,
Bitcoin/bitcoin will be the only true digital gold, surrounded by nationally approved and manipulable digital fiat.

If any government would follow what Bitcoin/bitcoin did exactly and never changed its coin cap or etc,
then that government would be admitting that they have no actual control over their finances and etc.
No government wants that. Especially the Chinese government who is manipulating their own currency right now.
They want to do what they want, when they want, especially in "financial emergencies".

Bitcoin/bitcoin is something other countries don't want to actually mimic.

[franky1]

china already have a digital currency.. if you read the actual details. its not creating anything new. its just expanding what they already have to be more user friendly so that they can eventually abolish bank notes..

its more about removing paper circulation and not really a blockchain/bitcoin attack.
so the harm.. is similar to applepay and NFC making the western world not really need bank notes any more for the little quick spends.

with that said. bitcoins current position is not able to compete with applepay/NFC speed or volume. so for now maybe best to concentrate on what bitcoin does offer that fiat doesnt offer very well.
such as hoarding safely. (reserves on privkeys)(able now)
such as remittance. which (apart from your luck) is not yet cheaper due to the spread differences of brokers.. but.. could be better and more achievable to attain better swap prices and make bitcoin great for remittance,(2year plan)
 rather than the lengthy wait for transaction capacity for daily living spending locally, and the hope of micro adoptions.. which seems longer and harder to achieve now(20 year plan)

[CIYAM]

If by digital currency you just mean "internet banking" then I think every country has that (so a rather ridiculous point).

At this stage it isn't really clear exactly what the PBOC are going to be doing so I think we'll have to wait and see - but in this topic I am bringing up the possibility that they do make it like "digital gold" (rather than "digital fiat").

Also - as I stated the Chinese government encourages their citizens to buy gold and silver (you can do so at any major bank). Does that sound like the kind of thing that a government would do if it wants to have total control over its citizens money?

[simon66]

I think that "Satoshi's stash" could be a big reason that governments don't get into BTC but so what? Why exactly do we want governments in BTC? I want "the people" in bitcoin, people that value freedom and decentralization.
I guess if governments get into bitcoin it could pump the price good but they would surely try to use there stash to manipulate it and attempt to control it.

Keeping the supply fixed at 21mm is very important to me and if anything happens to change that then I will consider bitcoin failed.

Any digital currency released by a government like the "chinacoin" that is being talked about will likely just be an extension of there fiat currency. That means that chinacoin will be subject to all the same manipulation that CNY is.

They are doing this to compete with bitcoin because they are afraid that the power of control over currency could be taken away from them. People that just want an easy digital currency to use may love it but it is not the same as bitcoin. If they release there own coin it may have no scailability issues, instant transfers, easy to use, everything, but it will still be controlled by a government so it's junk.

Chinacoin will likely have all of the same laws applied to it as there normal fiat currency so it will probably not be very useful to anyone outside of china because they have strict rules about money leaving there country.

I don't really think it competes with bitcoin or decentralized altcoins much at all. They will keep on inflating there currency and lording over it as dictators. BTC is something different, it's more than just a tool to make payments easier, it's freedom.

[CIYAM]

I'm not sure why it is so hard for people to "think outside of the box" instead of along the lines of whatever propaganda that they have been fed.

Try for a moment to consider the possibility that China actually creates a "digital gold" rather than a "digital fiat" (everyone is just assuming the latter).

When you consider the fact that they allow (and encourage you) to buy gold and silver from their banks (which you can't even do in Australia) I think you shouldn't just see things as being the way you have been taught to see them.

[franky1]

If by digital currency you just mean "internet banking" then I think every country has that (so a rather ridiculous point).

quote:
China's central bank wants to launch its own digital currencies to cut the costs of circulating traditional paper money and boost policymakers' control of money supply, the People's Bank of China said on Wednesday.

canada also made the same announcement in 2012-2013.. as they wanted to go pure digital.. yes they had digital databases of bank accounts and internet banking.. but that didnt stop them wanting to reinvent the canadian "mintchip" to get rid of bank notes. and thats pretty much a direct comparison to what china is now announcing

At this stage it isn't really clear exactly what the PBOC are going to be doing so I think we'll have to wait and see - but in this topic I am bringing up the possibility that they do make it like "digital gold" (rather than "digital fiat").

its clear WHY(going paperless) but not yet clear HOW. as they are still in R&D mode about that.

Also - as I stated the Chinese government encourages their citizens to buy gold and silver (you can do so at any major bank). Does that sound like the kind of thing that a government would do if it wants to have total control over its citizens money?

i agree with you, china has always been a great financial power house, and although some may say they are corrupt. thats to deflect attention away from where china do actually do well. especially where the western world is in debt.. to who... you guessed it china.. (they are financial ninjas)

[jonald_fyookball]

I guess the question is whether or not they will fix the supply limit. If they don't then Bitcoin still has its advantage - but if they do then I think Bitcoin is going to have a big problem.

If you can buy a digital gold equivalent without any hassle (or much of a fee) from your local bank then are you going to be as motivated to want to buy into Bitcoin?

This problem will get worse if multiple countries decide to do the same thing (creating protection for their national savings from being moved offshore).
 

If they actually did created a fixed supply asset, that would be a return to more honest money, and "the people" would win instead of
getting robbed by inflation generation after generation.  I really doubt they would do this though.

Even if they did that, I don't think it would be a threat to Bitcoin -- I think it would only help Bitcoin gain exposure
and people would diversify some holdings to Bitcoin which is more global.

[CIYAM]

@franky1

It really makes little sense to launch a digital currency when you can use many means to send RMB digitally as it stands.

So I think the PBOC statement has either been poorly translated or is simply stupid (as why would they need to create something new?).

@jonald_fyookball

I have no idea what they are actually going to do but am worried that if they really did do "the right thing" then interest in Bitcoin in China might suddenly dry up (especially if they at the same time clamped down upon it again as they did back in 2013).

The whole "money is debt" thing as I've mentioned is not really what happens in China - so the same pressures that apply in the west do not apply in China.

Mostly what happens here is that corrupt officials try to grab as much RMB as they can and then move it overseas (along with themselves and their family) before they get caught.

This is how billions of RMB leaves China every year (and countries like Australia allow it by letting people buy multi-million dollar properties despite the fact that China doesn't let you send more than 50K USD overseas per year).

[AgentofCoin]

If by digital currency you just mean "internet banking" then I think every country has that (so a rather ridiculous point).

At this stage it isn't really clear exactly what the PBOC are going to be doing so I think we'll have to wait and see - but in this topic I am bringing up the possibility that they do make it like "digital gold" (rather than "digital fiat").

Also - as I stated the Chinese government encourages their citizens to buy gold and silver (you can do so at any major bank). Does that sound like the kind of thing that a government would do if it wants to have total control over its citizens money?

I don't know if you are addressing my comment, since you are not quoting,
but from your some of your terminology above, I think you are.

The fact that the Chinese government allows people to buy physical gold and silver currently is not a sign of non-oppression.
The Chinese are not dumb and understand that debt based economies are not long lasting. They need to consume gold.
If anything, they know how to play the long game, especially with the military. Just look at the islands they are building off of Japan.

Diversification is fine for their citizens and a smart thing to do as an "advancing" world power.
But the average citizen can only own and carry only so much physical gold/silver.
But one day, when they are ready, they will Execute Order 66 and all gold will be handed over for conversion to a fiat or digital fiat.

Any "digital gold' that is created and maintained by the Chinese government will not be like the Bitcoin/bitcoin we know.
It will be used in ways to control their people. Just like how the Tienanmen Square incident is erased from their history books,
so will the protesters and dissenters of the Chinese government, be blocked from commerce and ultimately be erased as well.

[simon66]

Try for a moment to consider the possibility that China actually creates a "digital gold" rather than a "digital fiat" (everyone is just assuming the latter).

Even if they did who in there right mind would trust it? They can say whatever they want but they would never convince me that they didn't build in some way to control and manipulate it.

[CIYAM]

Try for a moment to consider the possibility that China actually creates a "digital gold" rather than a "digital fiat" (everyone is just assuming the latter).

Even if they did who in there right mind would trust it? They can say whatever they want but they would never convince me that they didn't build in some way to control and manipulate it.

Well - this is where software comes into it.

You could create it just like Bitcoin but simply restrict the mining to certain IPs (controlled by the government).

This would actually be a government controlled asset that is externally audit-able by anyone running the software (I am assuming it is made open source).

[European Central Bank]

I am an oppressive government. Do I issue a digital currency to -

A - give financial freedom to the people so they can send it abroad, avoid tax, avoid seizure and free themselves from my central bank's policies.

B - allow me to shut down my enemies with one click, enact my policies at the very root with none of that cash or offshore stuff and switch to an absolute stranglehold over every possible aspect of money.

I've thought long and hard about it and, ooh, I'm gonna for a B.

[CIYAM]

You have completed missed the point (not surprisingly) probably because you are too restricted in your thinking (perhaps due to exposure to "western propaganda").

Understand that the problem China is facing at the moment is corrupt officials taking RMB out of the country - but you think that should be supported (that is not supporting "freedom" but actually supporting "corruption")?

Understand also that it not only allows but encourages its population to buy gold and silver (which you can from the major banks) so they don't try and enforce everyone into investing in fiat or property (neither of which have done very well in recent years).

Also compared to the west things are much more anonymous and done with cash in China (e.g. you don't even need to show any ID to buy a SIM card).

[CIYAM]

Also - where is all this oppression happening?

(forgetting Xinjiang and Tibet as the vast majority of Chinese do not live in those two provinces)

It wasn't happening in Beijing when I lived there for five years and I have not experienced it in other cities that I've lived in China.

Seriously - in summer I can walk down the street with a beer in my hand and no policeman would even look at me oddly (in Australia if you did that you'd be likely to be charged).

I have actually met people that were in Tiananmen Square in 1989 (I doubt many other forum members here have) and I don't back away from saying that what happened then was very wrong but it isn't what is going on in most of the country today.

[franky1]

@franky1

It really makes little sense to launch a digital currency when you can use many means to send RMB digitally as it stands.

lets use bad chinese translation:
every couple decades every country launches a new paper currency, with new imagery and serial numbers and new counterfiet checking features.
even the metal coins get re launched every couple decades EG UK £1 coin is changing next year


every half century many countries revolutionize their whole currency EG dropping gold standard).. some countries have left it too long (america seriously needs to change its ways as fiat is outdated).

so currencies do change.. , just like the dollar has been the dollar for centuries. even though the backbone of the dollar has changed.
the pound has been the pound for even longer, even though the backbone of the pound has changed many times.
and in china's case it will still be the RMB(yuan).. just more user friendly for citizens to not need paper bank notes anymore. where the backbone citizens dont see changes

as for the backbone and what backs it from things like creation and inflation and ultimate backing value.. well thats still unknown. it can be 3 options:
backed by law (new law different to current fiat laws)
backed by precious metal
backed by their own blockchain(possible and some hope so.. but no one knows so pure speculation)

[CIYAM]

I think if it is supposed to be a replacement for the RMB then it won't be a blockchain at all (so that is probably good news for Bitcoin).

There might be some possibility of it being backed by precious metals as China has been purchasing them like crazy (but I wonder what on earth they are going to do with all the USD that they have).

Hmm... maybe this is the plan - buy gold from the US (with the US dollars that China has bought as US debt) and then release the new currency backed by gold!

(destroying the American economy)