Blockchain and Economists

[zero9119]

Blockchain technology is a great achievement of the 4.0 technology era. Blockchain has formed the cryptocurrency market as it is today, but not only so far, there are now many professions in the world applying blockchain technology to payment management and financial systems.

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[fokinlipat]

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.

Certainly there are many advantages of blockchain for developing economies:

1) It can bring transparency to government relief programs. For instance , suppose the agriculture ministry of a country is paying some relief to farmers in particular state. Now the central government will allocate funds for this in particular wallet and from there individual farmers can be paid. All transactions are recorded digitally and can be easily traced.

2) This will also reduce the cost of hiring staff for maintaining records of all the payments made.

[timerland]

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.

To me, that's exactly why I think it's completely absurd for anyone to go with a government issued coin when you have the alternative of working with decentralized cryptocurrencies, like bitcoin. The blockchain technology is only used to exert even more control over the economy, to further the surveillance on your spending etc. that were not previously possible with cash, have a more direct impact on the economy, or to freeze assets directly.

That to me is the scary aspect of centralized cryptocurrencies.

But a lot of governments are already looking to implement their own centralized versions of cryptos, and I don't think that anyone can stop them. The push for a cashless society and increased control from the government will be furthered using blockchain technology. But I'll keep holding onto my bitcoins, thanks.

[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.

To me, that's exactly why I think it's completely absurd for anyone to go with a government issued coin when you have the alternative of working with decentralized cryptocurrencies, like bitcoin. The blockchain technology is only used to exert even more control over the economy, to further the surveillance on your spending etc. that were not previously possible with cash, have a more direct impact on the economy, or to freeze assets directly.

That to me is the scary aspect of centralized cryptocurrencies.

But a lot of governments are already looking to implement their own centralized versions of cryptos, and I don't think that anyone can stop them. The push for a cashless society and increased control from the government will be furthered using blockchain technology. But I'll keep holding onto my bitcoins, thanks.

One thing does not exclude the other. One is an asset the other one is money. I am also holding my bitcoin.

[rafaelyarulin]

The new technology is always struggling to penetrate the road. After all, mastering new-it is always an extra effort, time and abandonment of the habitual. But that is the development.
In the past, the path from invention to universal implementation took decades, now the time has been reduced to several years. Blockchain is a technology that is gaining momentum at an incredible speed. The history of blockchain, peculiarities of Bitcoin, importance of miners, new opportunities and prospects of development in the world are the new format of economy.

[paynercash]

Exactly. Whether it's legal or not, this market has gone through tremendously and is trusted by the community. Most of it brings value to good profit investors. However, not everyone wants to profit from this market, there is no shortcut to success. Every achievement needs a process. So I think it's not a big deal in this market.