Blockchain and Economists

[rfkinline]

Recently I was interviewed by a well-known economics journalist…. and I was surprised.

The background: I am the CEO of a company that is going to implement blockchain technologies in small countries. The process will start by upgrading the local fiat currency to a blockchain based cryptocurrency, accompanied by tools like transfer, exchange, taxes, KYC, AML, reporting…

A currency as a cryptocurrency has many advantages and will — from my point of view — change economics fundamentally.

· Simple example: such a currency allows a government to help bypass restrictions like the lack of correspondent banks.

· More complex example: such a currency allows a government to directly work together with the population. For example, it is possible for the government to submit debit cards to farmers, so they can rebuild their farms after a disaster; without any banks involved (and within days).

These are just examples. Many other possibilities exist.

Government issued wallets on a government blockchain will be here rather sooner than later. Smart contracts will enable a much closer relationship between government and their population. In my above-mentioned example, a government does not even need to issue debit cards. They can select vendors that carry specific products/services and then tell the farmers what products/services they have been allocated to and where they can get them. The process can be fully automated and is transparent. The money transfer is done in the background.

Or what about credit loans for housing projects, or business startup loans to boost sectors of the economy. Operations that are traditionally embedded in banks / credit unions, but in future can be realized directly by governments?

The local currency as a new reserve currency asset that is equity based and a 100% reserve (like in your hands) will bring more stability to the fiat currency and to fractional reserve banking. If implemented correctly.

Here is the problem: traditional economists like the one that interviewed me, don’t take crypto serious “Sir, I covered the IMF and World Bank. I am an economist. Your idea will not work”. I rate him as a highly professional journalist and I was honored he contacted me. But these old-school economists must realize the earth is not any longer flat.

[Hydrogen]

Government issued wallets on a government blockchain will be here rather sooner than later.

I don't think government issued crypto will necessarily become a reality anytime soon.

The last time the united states rolled out an IT product, it was the US healthcare website, I think after the Affordable Care Act (see: "Obamacare") was passed. The website alone cost $1 billion dollars in taxpayer funding and did not work properly. I don't know if governments are well suited towards producing IT products in an efficient and cost effective manner to the public.

Also with 100% of the budget accounted for and additional borrowing often being necessary to fund the federal government's current programs, it is possible that projects like government issued crypto could not become a reality without tax hikes funding them. At the moment there is a lot of competition for programs funded by tax hikes. There is universal healthcare which some would gladly accept tax hikes for. That are future defense plans for things like robotic submarines and assorted weaponry which are unfunded. The F-35 program is still uncompleted and future cost overruns are likely. Fitting yet another unfunded project in somewhere, may not be so easy.

Here is the problem: traditional economists like the one that interviewed me, don’t take crypto serious “Sir, I covered the IMF and World Bank. I am an economist. Your idea will not work”. I rate him as a highly professional journalist and I was honored he contacted me. But these old-school economists must realize the earth is not any longer flat.

Bolded: 100%.

It does seem as if many of the economists and experts who comment on bitcoin and crypto currencies do not know much about them or understand what they bring to the table. At least that's the impression I get.

[botany]

The process will start by upgrading the local fiat currency to a blockchain based cryptocurrency, accompanied by tools like transfer, exchange, taxes, KYC, AML, reporting…

A currency as a cryptocurrency has many advantages and will — from my point of view — change economics fundamentally.

It definitely will. And not necessary in a positive way. Governments all over the world are trying to eliminate cash and shift residents to e-money (whether blockchain or bank-based). The motives behind these are simple
- Increased surveillance over what you do
- No leakage of tax revenues
- Implementation of policies like negative interest rate or demonetization

This is actually the diametric opposite of what decentralized cryptocurrencies like Bitcoin set out to achieve.

[davis196]

A currency as a cryptocurrency has many advantages and will — from my point of view — change economics fundamentally.

· Simple example: such a currency allows a government to help bypass restrictions like the lack of correspondent banks.

· More complex example: such a currency allows a government to directly work together with the population. For example, it is possible for the government to submit debit cards to farmers, so they can rebuild their farms after a disaster; without any banks involved (and within days).

These are just examples. Many other possibilities exist.

Government issued wallets on a government blockchain will be here rather sooner than later. Smart contracts will enable a much closer relationship between government and their population. In my above-mentioned example, a government does not even need to issue debit cards. They can select vendors that carry specific products/services and then tell the farmers what products/services they have been allocated to and where they can get them. The process can be fully automated and is transparent. The money transfer is done in the background.

Or what about credit loans for housing projects, or business startup loans to boost sectors of the economy. Operations that are traditionally embedded in banks / credit unions, but in future can be realized directly by governments?

All the advanteges that you are talking about can be conducted by a government-owned bank.
I don`t think that the government is obligated to help farmers to rebuild their farms after a disaster.That`s why insurance companies exist.
Credit loans realized by the government?This is a pretty old idea and it isn`t working.
The blockchain and smart contracts still can`t replace banking services,but I`m sure that they will,in the not so distant future.

[aso118]

I don't think government issued crypto will necessarily become a reality anytime soon.

The last time the united states rolled out an IT product, it was the US healthcare website, I think after the Affordable Care Act (see: "Obamacare") was passed. The website alone cost $1 billion dollars in taxpayer funding and did not work properly. I don't know if governments are well suited towards producing IT products in an efficient and cost effective manner to the public.

Also with 100% of the budget accounted for and additional borrowing often being necessary to fund the federal government's current programs, it is possible that projects like government issued crypto could not become a reality without tax hikes funding them. At the moment there is a lot of competition for programs funded by tax hikes. There is universal healthcare which some would gladly accept tax hikes for. That are future defense plans for things like robotic submarines and assorted weaponry which are unfunded. The F-35 program is still uncompleted and future cost overruns are likely. Fitting yet another unfunded project in somewhere, may not be so easy.

The cost itself might not deter the government, if the savings are immediate and certain.
Proponents of implementing such a move could easily make the argument - Size of shadow economy is X, you will eliminate Y% of it, leading to increased tax revenues. When weighed against the cost of implementing such a project, it would seem like the savings are enormous.

The US government can easily find competent firms to set up the IT systems. It is just that they chose to mess it up.

[rfkinline]

A currency as a cryptocurrency has many advantages and will — from my point of view — change economics fundamentally.

· Simple example: such a currency allows a government to help bypass restrictions like the lack of correspondent banks.

· More complex example: such a currency allows a government to directly work together with the population. For example, it is possible for the government to submit debit cards to farmers, so they can rebuild their farms after a disaster; without any banks involved (and within days).

These are just examples. Many other possibilities exist.

Government issued wallets on a government blockchain will be here rather sooner than later. Smart contracts will enable a much closer relationship between government and their population. In my above-mentioned example, a government does not even need to issue debit cards. They can select vendors that carry specific products/services and then tell the farmers what products/services they have been allocated to and where they can get them. The process can be fully automated and is transparent. The money transfer is done in the background.

Or what about credit loans for housing projects, or business startup loans to boost sectors of the economy. Operations that are traditionally embedded in banks / credit unions, but in future can be realized directly by governments?

All the advanteges that you are talking about can be conducted by a government-owned bank.
I don`t think that the government is obligated to help farmers to rebuild their farms after a disaster.That`s why insurance companies exist.
Credit loans realized by the government?This is a pretty old idea and it isn`t working.
The blockchain and smart contracts still can`t replace banking services,but I`m sure that they will,in the not so distant future.

I was talking about the country Dominica. The hurricane in 2017 destroyed that island. Over 200% of GDP in damages. To get the farms going again, they applied for a $10 million loan. Those small countries don't have insurance. In relation to banking services I agree. I remember back 20 years ago where a branch manager of a bank could decide things. These days it is all controlled through central offices. Branches just fill out forms. All those procedures can be replaced by smart contracts. And finally credit loans: yes, although I am hopefull. Banks are for-profit and therefore have different objectives than governments.

[aoluain]

The process will start by upgrading the local fiat currency to a blockchain based cryptocurrency, accompanied by tools like transfer, exchange, taxes, KYC, AML, reporting…

A currency as a cryptocurrency has many advantages and will — from my point of view — change economics fundamentally.

It definitely will. And not necessary in a positive way. Governments all over the world are trying to eliminate cash and shift residents to e-money (whether blockchain or bank-based). The motives behind these are simple
- Increased surveillance over what you do
- No leakage of tax revenues
- Implementation of policies like negative interest rate or demonetization

This is actually the diametric opposite of what decentralized cryptocurrencies like Bitcoin set out to achieve.

I agree, total centralisation. We are already on this path, bank transfers, visa debit cards
where if its less than €30 we only have to present our card to a scanner. Its all disguised
as convienience for us and a way to spend easier.

[rfkinline]

The process will start by upgrading the local fiat currency to a blockchain based cryptocurrency, accompanied by tools like transfer, exchange, taxes, KYC, AML, reporting…

A currency as a cryptocurrency has many advantages and will — from my point of view — change economics fundamentally.

It definitely will. And not necessary in a positive way. Governments all over the world are trying to eliminate cash and shift residents to e-money (whether blockchain or bank-based). The motives behind these are simple
- Increased surveillance over what you do
- No leakage of tax revenues
- Implementation of policies like negative interest rate or demonetization

This is actually the diametric opposite of what decentralized cryptocurrencies like Bitcoin set out to achieve.

I agree, total centralisation. We are already on this path, bank transfers, visa debit cards
where if its less than €30 we only have to present our card to a scanner. Its all disguised
as convienience for us and a way to spend easier.

That is not true for small countries. Many correspondent banks left them (because it is not economical for them) and as a consequence if they for example want to do a wire transfer to the USA, they have to go through Europe or China. These are the problems that cause a lot of pain. Another one is for example the European tax blacklist. They put small countries on that list when they don't cooperate with what Europe thinks is good. There are many of these regulations forced on small countries that are unfair.
The centralisation is today part of every government so changing that is kind off impossible in the short term, but delivering tools to make the lives of those countries easier is the way to go.

[brontosaurus]

The process will start by upgrading the local fiat currency to a blockchain based cryptocurrency, accompanied by tools like transfer, exchange, taxes, KYC, AML, reporting…

A currency as a cryptocurrency has many advantages and will — from my point of view — change economics fundamentally.

It definitely will. And not necessary in a positive way. Governments all over the world are trying to eliminate cash and shift residents to e-money (whether blockchain or bank-based). The motives behind these are simple
- Increased surveillance over what you do
- No leakage of tax revenues
- Implementation of policies like negative interest rate or demonetization

This is actually the diametric opposite of what decentralized cryptocurrencies like Bitcoin set out to achieve.

That is one aspect of what is expected to happen in the coming years. And right now it is all just dark n ambiguous and god knows when is the much awaited day of change gonna dawn upon this world. Change here is when the thinking and perceptions of people will change in this world and when they will accept the act that VIRTUAL is the new REAL!!

Here is the problem: traditional economists like the one that interviewed me, don’t take crypto serious “Sir, I covered the IMF and World Bank. I am an economist. Your idea will not work”. I rate him as a highly professional journalist and I was honored he contacted me. But these old-school economists must realize the earth is not any longer flat.

An economist cannot be expected to understand the blockchain technology, provided that he is not updated with the buzzing innovations happening around. And trust me, these traditional economists are least bothered with the virtual world because this doesn't interest them for a simple reason of governments not paying heed to this area!!

[rfkinline]

The process will start by upgrading the local fiat currency to a blockchain based cryptocurrency, accompanied by tools like transfer, exchange, taxes, KYC, AML, reporting…

A currency as a cryptocurrency has many advantages and will — from my point of view — change economics fundamentally.

It definitely will. And not necessary in a positive way. Governments all over the world are trying to eliminate cash and shift residents to e-money (whether blockchain or bank-based). The motives behind these are simple
- Increased surveillance over what you do
- No leakage of tax revenues
- Implementation of policies like negative interest rate or demonetization

This is actually the diametric opposite of what decentralized cryptocurrencies like Bitcoin set out to achieve.

That is one aspect of what is expected to happen in the coming years. And right now it is all just dark n ambiguous and god knows when is the much awaited day of change gonna dawn upon this world. Change here is when the thinking and perceptions of people will change in this world and when they will accept the act that VIRTUAL is the new REAL!!

Here is the problem: traditional economists like the one that interviewed me, don’t take crypto serious “Sir, I covered the IMF and World Bank. I am an economist. Your idea will not work”. I rate him as a highly professional journalist and I was honored he contacted me. But these old-school economists must realize the earth is not any longer flat.

An economist cannot be expected to understand the blockchain technology, provided that he is not updated with the buzzing innovations happening around. And trust me, these traditional economists are least bothered with the virtual world because this doesn't interest them for a simple reason of governments not paying heed to this area!!

:-) Thanks

[ceferov]

It will take some time to adopt it but blockchain is definitely exciting new technology and I believe will  be used on every space on near future

[LeGaulois]

@rfkinline
Banks don't have the same interests in cryptocurrencies than the population.

The major reason banks are looking after the "crypto technology" are about the secure transactions, saving on costs (up to 30% according to studies, so multiple million dollars saved per year).
Notice I say "crypto technology" and not "cryptocurrencies" because 1) they can't issue a currency not recognized by the country and 2) they are more looking to get their own tech and their own ecosystem (note: JPS Morgan has its own ERC20)

The population is thinking differently.
You can see a part interested in for the speculative point (making money with their speculation) This part is not so interesting. And you have another part concerned, as it allows them to get banked (millions of people worldwide are unbanked) OR to get unbanked. Many people are just tired with banks since a decade and they only want a system allowing them to live without the need of a bank account, and without any control from govt  (directly or not)

This is why the cryptocurrency system comes. The real roots are in the anarchist and cypherpunk groups

[Coin-1]

I was talking about the country Dominica. The hurricane in 2017 destroyed that island. Over 200% of GDP in damages. To get the farms going again, they applied for a $10 million loan. Those small countries don't have insurance. In relation to banking services I agree. I remember back 20 years ago where a branch manager of a bank could decide things. These days it is all controlled through central offices. Branches just fill out forms. All those procedures can be replaced by smart contracts. And finally credit loans: yes, although I am hopefull. Banks are for-profit and therefore have different objectives than governments.

I seems that the main reason to implement a blockchain is to avoid a bureaucracy barriers in this country. Well... I think the government should make some investing programs to restore a farms destroyed by a hurricane. The blockchain technology is just something like a payment peer-to-peer system.

[kolesozw]

This is typical thinking for an 'journalist/economist'  from ex-communistic counties... they are stuck to the old.

Just continue with your idea. Those under developed markets are best to integrate Western (and already working) stuff and profit.

[pitiflin]

Finally something to discuss.

Recently I was interviewed by a well-known economics journalist…. and I was surprised.

The background: I am the CEO of a company that is going to implement blockchain technologies in small countries. The process will start by upgrading the local fiat currency to a blockchain based cryptocurrency, accompanied by tools like transfer, exchange, taxes, KYC, AML, reporting…

Why small countries? Technology is still not up to date,hell a lot of people don't even own a phone or a computer. Just because cost is low?

A currency as a cryptocurrency has many advantages and will — from my point of view — change economics fundamentally.

· Simple example: such a currency allows a government to help bypass restrictions like the lack of correspondent banks.

· More complex example: such a currency allows a government to directly work together with the population. For example, it is possible for the government to submit debit cards to farmers, so they can rebuild their farms after a disaster; without any banks involved (and within days).

These are just examples. Many other possibilities exist.

It won't the concept concept of economics fundamentally or any method. I dare you. People don't change. They are who they were.
Government won't bypass shit.
Government issue subsidies without the involvement of commercial banks? Your point is?

Government issued wallets on a government blockchain will be here rather sooner than later. Smart contracts will enable a much closer relationship between government and their population. In my above-mentioned example, a government does not even need to issue debit cards. They can select vendors that carry specific products/services and then tell the farmers what products/services they have been allocated to and where they can get them. The process can be fully automated and is transparent. The money transfer is done in the background.

Or what about credit loans for housing projects, or business startup loans to boost sectors of the economy. Operations that are traditionally embedded in banks / credit unions, but in future can be realized directly by governments?

The local currency as a new reserve currency asset that is equity based and a 100% reserve (like in your hands) will bring more stability to the fiat currency and to fractional reserve banking. If implemented correctly.

Only a couple of Governements have even liked the idea of blockchain,a lot of them still don't know the meaning or what even a blockchain is.
There'll be easy facilitation of black market and corruption much worse than the current state,and think about it.
About the underlined part: Have you ever seen anything implemented correctly except someone is forced to at a gunpoint.

Here is the problem: traditional economists like the one that interviewed me, don’t take crypto serious “Sir, I covered the IMF and World Bank. I am an economist. Your idea will not work”. I rate him as a highly professional journalist and I was honored he contacted me. But these old-school economists must realize the earth is not any longer flat.

You sure he/she was an economist? Sounds like a jackass. Old-school economists believe in what they learnt in high school. They are not dynamic,the education system plays a big role on how people think. Unless that is going to change,I don't see anything working properly.

[bengca84135120]

If blockchain technology can be spread globally, Banks' foreign exchange operations will be fatally hit.

Blockchain technology can avoid cumbersome systems and create a more direct payment process between the payer and the payee!

Each node of the block chain is a collection of functions of routing, blockchain database, mining and wallet service.

[rfkinline]

Why small countries? Technology is still not up to date,hell a lot of people don't even own a phone or a computer. Just because cost is low?Small

Agree. There are many projects that try to bank the unbanked with technology. I believe that this is the wrong approach as people might have a phone, but they don't need a bank account. A better approach is by coming from the top (government) by helping them. Most of the governments of small countries are really good governments that are trying hard and the big issues they have are usually imposed on them (by a large country or a natural disaster).

It won't the concept concept of economics fundamentally or any method. I dare you. People don't change. They are who they were.
Government won't bypass shit.
Government issue subsidies without the involvement of commercial banks? Your point is?
Only a couple of Governements have even liked the idea of blockchain,a lot of them still don't know the meaning or what even a blockchain is.
There'll be easy facilitation of black market and corruption much worse than the current state,and think about it.
About the underlined part: Have you ever seen anything implemented correctly except someone is forced to at a gunpoint.

True. I only found that governments of small countries are a bit like the ones larger communities.  Everybody knows everybody and accountability is higher. I am only talking of small countries. With a narrow economic base, small countries have difficulty to spread economic risk across productive sectors.

You sure he/she was an economist? Sounds like a jackass. Old-school economists believe in what they learnt in high school. They are not dynamic,the education system plays a big role on how people think. Unless that is going to change,I don't see anything working properly.

:-) Yes. He is 65 years of age and is for over 30 years the official correspondent for a European country to the US. And they wonder why economists are not able to predict big market changes nor give recommendations what to do when those changes happen (aka 2008 crash)

[jakagintiri]

Today many of the technological trends of Blockchain for the advancement of economists of every country, but very difficult to realize at this time, of course true blockchain technology has not really formed 100% there are still shortcomings that perfection does not take a short time. for now there will be no technology to drive the future blend with blockchain not 100% perfect.

[Gastotade]

If blockchain technology can be spread globally, Banks' foreign exchange operations will be fatally hit.

Blockchain technology can avoid cumbersome systems and create a more direct payment process between the payer and the payee!

Each node of the block chain is a collection of functions of routing, blockchain database, mining and wallet service.

I'm always amazed and inspired by how blockchain works. I would love to see more of it. Try to read some video clips on how capable blockchain is in giving us an easy transaction. The idea behind it makes it more convincing by many companies to adopt this technology.

[VUToken]

If blockchain technology can be spread globally, Banks' foreign exchange operations will be fatally hit.

Blockchain technology can avoid cumbersome systems and create a more direct payment process between the payer and the payee!

Each node of the block chain is a collection of functions of routing, blockchain database, mining and wallet service.

I'm always amazed and inspired by how blockchain works. I would love to see more of it. Try to read some video clips on how capable blockchain is in giving us an easy transaction. The idea behind it makes it more convincing by many companies to adopt this technology.

As more corporate/business solutions become available, modern business won't have a choice but to adopt blockchain technology, in order to stay competitive with those who do. The cost and time savings that make the technology desirable, also makes it attractive to business for the sake of efficiency. Ultimately, blockchains that offer utility will most likely be some of the most successful coins, as business utility means a lot more in terms of capitalization rather than consumer adoption.