[2017-09-21] Germany's Central Bank: Consumers Won't Use Blockchain for Payments

[tyz]

Germany's Central Bank: Consumers Won't Use Blockchain for Payments

Germany's central bank has published a new research paper centered on distributed ledger tech (DLT), exploring its use for payments, securities settlement and more.

Researchers from the Deutsche Bundesbank wrote in the paper that the tech "offers a number of benefits on account of the distributed storage of data" – highlighting both the potential opportunities as well as some of the practical challenges any application might create.

https://www.coindesk.com/germanys-central-bank-consumers-wont-use-blockchain-payments/

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[panju1]

All the banks and the central banks of the world seem to be united in their view against crypto currencies.  Some are bent on banning their usage, while some seem to think they won't be used at all. Only when they see a bank run with people moving money from banks to different crypto currencies, will the central banks realize how powerless they are.

[darkangel11]

"Particularly for payments within the euro area, they argue, the systems in operation have already been optimised for fast transfers and require a minimum of reconciliation, besides being able to process millions of transactions with ease every day."

Ok, but can I transfer money on Sunday evening? No. Can I transfer it without everyone knowing my name? No.
Can I have access to my money without verifying my name? No. Can I open an account without giving all my details to the bank? No.

I can see clearly that fiat payments haven't been optimised enough

[HeRetiK]

Actually the title is slightly incorrect, reading the statement of the Deutsche Bundesbank [1] itself it should say:

"Germany's Central Bank: Consumers Won't use our Blockchain for Payments."

And with that, they're not wrong.

[1] https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_09_20_monthly_report_dlt.html

[Falgorn]

Germany, like the European Union as a whole, has so far resisted the introduction of decentralized crypto-currencies in its territory as well as their blocking technologies, believing that existing methods and systems are quite effective. However, after a while, with the increase in the circulation of crypto currency in the world and its support by people, governments and banks will not be able to resist the crypto currency as a revolutionary technology. They will need to either be witnesses to the expansion of the use of crypts-currency by their citizens, or take part in it and try to somehow regulate it.

[Samarkand]

The Monthly Report article also investigates whether DLT has any potential uses in the settlement of securities. Compared to payments, traditional settlement operations involve a far greater number and variety of intermediaries. These include securities traders, exchanges and clearing houses.

...

They concede, however, that it is still unclear whether DLT also has the edge over today’s technology in terms of security, efficiency, costs and speed.

This is a completely ridiculous conclusion of the researchers. It is self-evident that a blockchain-based solution
for the settlement of securities is much faster and much more secure than having the current system with
multiple points of failure and a centralized infrastructure. A natural catastrophe or a bomb attack on one
of the major financial hubs (e.g. London) on the planet and security settlement would probably be stopped
immediately. This would never happen with a decentralized blockchain-based solution.

[1Referee]

If banks manage to tie fiat to a digital token, people won't even feel the difference between transacting in an online manner, except for the fact that transactions settle instantly, and not with the next working day like is the case right now. That being said, I think it's the banks that aren't really looking forward to provide such a user experience - they won't mind it to keep transacting in the old fashion way where you as customer depend on working days for transactions to settle. It's a system they want to keep alive for as long as possible, without giving people too much freedom, because at the end of the day, that's al what it is about > them not willing to give you the freedom you deserve.

[boerthwi]

"Particularly for payments within the euro area, they argue, the systems in operation have already been optimised for fast transfers and require a minimum of reconciliation, besides being able to process millions of transactions with ease every day."

Ok, but can I transfer money on Sunday evening? No. Can I transfer it without everyone knowing my name? No.
Can I have access to my money without verifying my name? No. Can I open an account without giving all my details to the bank? No.

I can see clearly that fiat payments haven't been optimised enough

You all are absolutely right. BUT we shouldn't Forget that there's a huge difference between us (meaning crypto enthusiasts) and the wide mass of People.

Do People want millions of Transactions in minutes? No. Do People want anonymous Transactions? No.

People are giving away their data all the time, and they don't care. As Long as People don't start to Change their thinking, the market won't reach masses.

[iamTom123]

"Particularly for payments within the euro area, they argue, the systems in operation have already been optimised for fast transfers and require a minimum of reconciliation, besides being able to process millions of transactions with ease every day."

Ok, but can I transfer money on Sunday evening? No. Can I transfer it without everyone knowing my name? No.
Can I have access to my money without verifying my name? No. Can I open an account without giving all my details to the bank? No. I can see clearly that fiat payments haven't been optimized enough

Maybe they have their own view on what "optimized" means and this is quite understandable since we are dealing with people who are not really into cryptocurrency and in my opinion they really need to get educated on what cryptocurrency stands for and the limitless potential of this new technology.

These people which Bitcoin and cryptocurrency can be disruptive are also representing their own interests and as such we should not be expecting that they would fully support Bitcoin right away. The pressure should be coming from the people as they would be the one to be getting into Bitcoin.

The road to Bitcoin mainstream adoption is not an easy easy road as there would always be many bumps and humps along the way...this must be a part of the roadmap for Bitcoin. Whether Bitcoin can be able to surmount all of these challenges remains to be seen. But I am hoping on the positive side.

[Carlton Banks]

Do People want anonymous Transactions? No.

People are giving away their data all the time, and they don't care. As Long as People don't start to Change their thinking, the market won't reach masses.

While that's true right now, it's been decreasingly less true.

The younger generation are more aware of the power of information and it's power than ever before, so it's no surprise that they're leading the way in embracing cryptocurrency as a genuine alternative to the old system. And fortunately, reality has it such that new young people just keep appearing, whereas old people have a habit of eventually disappearing, never to be seen again I think cryptocurrency blockchains, and their properties and effects, will win out in the end.

[Samarkand]

...

The younger generation are more aware of the power of information and it's power than ever before, so it's no surprise that they're leading the way in embracing cryptocurrency as a genuine alternative to the old system. And fortunately, reality has it such that new young people just keep appearing, whereas old people have a habit of eventually disappearing, never to be seen again I think cryptocurrency blockchains, and their properties and effects, will win out in the end.

I have my doubts that the younger generation is invested in cryptocurrencies due to the reason that
it represents a genuine alternative to the old system. Most people are in it for the gains and the potential
to make a quick buck or to multiply their (often very small) investment in speculative endeavors
like ICOs.

I concede that your view may be true for people that have been holding through bear cycles, but
many people, who entered in 2017 are simply invested for speculative purposes.

[Kingofbitcoin12345]

Maybe the central banks are talking "the people" the ordinary not the cryptocurrency users.. How come it will not affect any conclusion they made when they're not talking to someone who knows how Blockchain works.. In the first place those may have answered to any survey regarding this issue,, we don't even know if they're a real deal because we all know how this propaganda machine works.. Can we ask a farmer about astronauts job?? No because only astronauts knows that..

[Carlton Banks]

I have my doubts that the younger generation is invested in cryptocurrencies due to the reason that
it represents a genuine alternative to the old system. Most people are in it for the gains and the potential
to make a quick buck or to multiply their (often very small) investment in speculative endeavors
like ICOs.

No, I disagree.

Young people are inherently open to new ideas; they are psychologically inclined to do so (because they themselves are new, young people often reject old things in favour of the new subconsciously), and their minds are typically more flexible to learn and accept new concepts also. Sure there are speculators amongst the young too, but they're far more likely to get involved with Bitcoin ideologically than the old.

[treihon]

The new generation I think is opened to cryptocurrency and is able to see the benefits and good investment that it represents mostly because it is a better informed generation and questions most of the granted old believes. But banks and the old system will continue to try to decrease cryptocurrency growth and blacken its value because they are threaten by it. Anyway I think the advantages are greater and cryptocurrency is here to stay.

[Samarkand]

I have my doubts that the younger generation is invested in cryptocurrencies due to the reason that
it represents a genuine alternative to the old system. Most people are in it for the gains and the potential
to make a quick buck or to multiply their (often very small) investment in speculative endeavors
like ICOs.

No, I disagree.

Young people are inherently open to new ideas; they are psychologically inclined to do so (because they themselves are new, young people often reject old things in favour of the new subconsciously), and their minds are typically more flexible to learn and accept new concepts also. Sure there are speculators amongst the young too, but they're far more likely to get involved with Bitcoin ideologically than the old.

I agree that young people have more flexible minds.

However, you have to see that many young people didn´t show any interest in
Bitcoin and other cryptocurrencies when it was trading for 100 $ in 2013 and just
entered the scene when mainstream media started reporting the huge BTC price gains.

Bitcoin was already a brilliant alternative to the traditional financial system in 2009-2016.
The technology hasn´t even changed that much apart from a few minor tweaks like
Segwit.