Are we moving towards Centralized Private Blockchains?

[Robust Crypto]

Today I had an interesting encounter with one of the economists I know. We discussed what Cryptocurrency and Blockchain were and the value behind them.

Here are some key points he brought up:

The dollar is backed by gold, the gold is the bareback of it. What is behind Bitcoin?
What inherent value does Bitcoin have?
We don't know how created it, maybe it's a government funded project
It's just speculation, the technology hasn't been tested yet.

My answers:

At one point, I think I lost because we value Bitcoin in Dollars. So, it's "backed" by dollar technically, even when we use Bitcoin to pay for something, it's calculated in $.

Bitcoin's core values are the following: Open source, censorship resistant, decentralized, peer-to-peer and verification of rules (everyone can be part and run a full node).

We don't know it, and it also can be some guy in his basement for all we know. It's core values prove that this is not government funded project, it can't be. How could they benefit? One of the interesting theories is that they released this untested technology to the masses and let them develop it further to then adopt it if it works.

Yes it is speculation, but internet was a speculation as well back in the days. I heard that when they sent out the first bits of information, the whole internet crashed. The technology needs time to adopt, and since there are so many programmers and IT experts around the world, we will see adoption of this technology even faster than ever before.

But here's the kicker that I have been thinking about since we talked: He believes the private/public sectors will adopt the Blockchain, the governments, businesses to further improve their systems. But it will NOT be an open Blockchain, rather a Centralized Private Blockchain. It will just be Database replaced with the word Blockchain, same principles. Non-censorship resistant and not open source.

I want to know what you guys' thoughts are on this. How would you counter these arguments? Let me know because this last thing has been bugging me the whole day!

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[hatshepsut93]

The dollar is backed by gold, the gold is the bareback of it. What is behind Bitcoin?
What inherent value does Bitcoin have?
We don't know how created it, maybe it's a government funded project
It's just speculation, the technology hasn't been tested yet.

Dollar is not backed by gold. Gold is not backed by anything, it has speculative value driven by supply and demand, just like everything else, just like Bitcoin.

Does is matter who created it as long as it's working? It's open source and in 9 years no one found any backdoors.

Bitcoin has been tested for 9 years already, it was and always is under attack, yet it continues to function like a clock.

But here's the kicker that I have been thinking about since we talked: He believes the private/public sectors will adopt the Blockchain, the governments, businesses to further improve their systems.

This is what currently happening, and also a lot of public blockchains like Ethereum or EOS or IOTA are moving towards more and more centralization in order to get more performance, because at this moment centralized systems are still way more efficient than public, decentralized ledgers like Bitcoin. But Lightning Network is an extremely promising game-changer that will give a huge edge to public blockchains.

[davis196]

The dollar was backed by gold before 1971.Now it`s backed by promises.
There`s nothing wrong with banks and companies developing their own private blockchains.They have the right to do so.The good thing is that all the crypto users will have choice between public and private blockchain based services.This will create competition and competition will improve the quality of online services.

[hugeblack]

Gold backed the dollar before 1971. Now it`s backed by promises.

Your words are true, and Now the rest of the currencies are built on dollar promises.
Since the commercial use is now the US currency, all the price is achieved compared to the dollar.
You can swap it for goods and services directly without the urge to use the dollar as an intermediary that means it does not depend on a dollar.
Speculators tend to stabilize prices more than unexpected investments, so centralized blockchains "stablecoins" as a way to get relatively coins and thus reduce the risk of encryption.

[Thewolfofcrypto]

I know that in my particular country, all the politics will be shining happy if this would became true, because they will be able to put there hand into the jar with honey comma and if we are having decentralised system then they are not able to steal.

[Robust Crypto]

I guess my point here is that, we will still have the same system. Same banks, governments but the backend if you will, will change. Instead of this slow system which banks use, it will be private centralized Blockchain. And we, the individuals will still live in the same corrupt, centralized, controlled system instead of a free society with as little corruption as possible.

[shulio]

At some point in the future there will be private blockchains for companies and governments. But it is not the best thing we should have. Blockchain should be decentralized. Otherwise it will be no different than current banking solutions.

[Hydrogen]

Here are some key points he brought up:

The dollar is backed by gold, the gold is the bareback of it. What is behind Bitcoin?

At one point, I think I lost because we value Bitcoin in Dollars. So, it's "backed" by dollar technically, even when we use Bitcoin to pay for something, it's calculated in $.

Bitcoin's core values are the following: Open source, censorship resistant, decentralized, peer-to-peer and verification of rules (everyone can be part and run a full node).

But here's the kicker that I have been thinking about since we talked: He believes the private/public sectors will adopt the Blockchain, the governments, businesses to further improve their systems. But it will NOT be an open Blockchain, rather a Centralized Private Blockchain. It will just be Database replaced with the word Blockchain, same principles. Non-censorship resistant and not open source.

I want to know what you guys' thoughts are on this. How would you counter these arguments? Let me know because this last thing has been bugging me the whole day!

I'm not certain the US dollar is backed by gold in the way people believe it is. There are many who claim the dollar has not been backed by gold since 1971 when dollars could no longer be redeemed for gold on a 1:1 basis.

The price of bitcoin and crypto in US dollars could be labeled moreso an "exchange rate" than a form of backing. There could be a debate on this topic. Whether things like US dollars and bitcoin need to guarantee they can be redeemed for gold/dollars in order to be truly backed.

One of the main advantages of blockchain could be its "trust less" design paradigm whereby it can achieve many of the same functions banks can with fewer workers and manpower being necessary to approve/disapprove transactions under a more "trust based" format.

I think the concept of a private blockchain could be a real possibility although not necessarily a relevent one. There was a transparent website under Obama's administration which showed federal budgets and spending. No one cared enough to look @ it.  That's the real issue with the economy, business and finance in this day and age. Everyone wants to have an opinion and no one wants to bother educating themselves or being informed which leads to virtually everyone supporting the wrong policies while refusing to learn from the mistakes of the past.

[Tatzky]

The dollar is backed by gold, the gold is the bareback of it. What is behind Bitcoin?
What inherent value does Bitcoin have?
We don't know how created it, maybe it's a government funded project
It's just speculation, the technology hasn't been tested yet.

Dollar is not backed by gold. Gold is not backed by anything, it has speculative value driven by supply and demand, just like everything else, just like Bitcoin.

Does is matter who created it as long as it's working? It's open source and in 9 years no one found any backdoors.

Bitcoin has been tested for 9 years already, it was and always is under attack, yet it continues to function like a clock.

But here's the kicker that I have been thinking about since we talked: He believes the private/public sectors will adopt the Blockchain, the governments, businesses to further improve their systems.

This is what currently happening, and also a lot of public blockchains like Ethereum or EOS or IOTA are moving towards more and more centralization in order to get more performance, because at this moment centralized systems are still way more efficient than public, decentralized ledgers like Bitcoin. But Lightning Network is an extremely promising game-changer that will give a huge edge to public blockchains.

Should we let him tell the source of his post? I was also wondering how he comes up with this idea, since US money and it's value is determines by the county's economy as I read on some study...

[dothebeats]

Some countries are already considering the idea of a state-issued cryptocurrency, so no matter how much we loved our dear fiat, we will inevitably move towards a crypto future. The reason I see why people use this is because the government tells them to do so, even without the backing of gold or any other significant reason or catalyst, people will follow because they'll believe that it's the best thing. Most people won't care about whether the currency they're using is open or closed-source; as long as they can use it, they will.

Even big companies and industry leaders have expressed their opinions regarding the 'blockchain' alone and not cryptocurrency. Perhaps it could spark yet another industrial revolution but one all I can say is a digital currency future and blockchain-integrated systems will be a huge part of our society in the future.

[jeronimosuykens]

At some point in the future there will be private blockchains for companies and governments. But it is not the best thing we should have. Blockchain should be decentralized. Otherwise it will be no different than current banking solutions.

The market situation is difficult, also hope in the future no barriers do occur. Only in this way are new investors taking new steps in the market. And it will be great when they have been compromised, linked together to win, I believe they will look at it and apply it together. Formed the most powerful block in the market.

[Robust Crypto]

The dollar is backed by gold, the gold is the bareback of it. What is behind Bitcoin?
What inherent value does Bitcoin have?
We don't know how created it, maybe it's a government funded project
It's just speculation, the technology hasn't been tested yet.

Dollar is not backed by gold. Gold is not backed by anything, it has speculative value driven by supply and demand, just like everything else, just like Bitcoin.

Does is matter who created it as long as it's working? It's open source and in 9 years no one found any backdoors.

Bitcoin has been tested for 9 years already, it was and always is under attack, yet it continues to function like a clock.

But here's the kicker that I have been thinking about since we talked: He believes the private/public sectors will adopt the Blockchain, the governments, businesses to further improve their systems.

This is what currently happening, and also a lot of public blockchains like Ethereum or EOS or IOTA are moving towards more and more centralization in order to get more performance, because at this moment centralized systems are still way more efficient than public, decentralized ledgers like Bitcoin. But Lightning Network is an extremely promising game-changer that will give a huge edge to public blockchains.

Should we let him tell the source of his post? I was also wondering how he comes up with this idea, since US money and it's value is determines by the county's economy as I read on some study...

I quoted what the other party said.

And yes, money was backed by gold in the early stages, and as the time went by there was more money created (inflation) and that lead to many economic crises.

[Grayy]

Bitcoin will gradually  be valued independently in the future when we begin to use it more in our daily transactions. Talk about bitcoin to other, explain carefully to them. Let everyone of your friends know about bitcoin and why the have to owe some bitcoin. More people in the bitcoin market  is likely to trigger more companies to accept bitcoin because every company provides its customers with the services they want.

[ylnar123]

Today I had an interesting encounter with one of the economists I know. We discussed what Cryptocurrency and Blockchain were and the value behind them.

Here are some key points he brought up:

The dollar is backed by gold, the gold is the bareback of it. What is behind Bitcoin?
What inherent value does Bitcoin have?
We don't know how created it, maybe it's a government funded project
It's just speculation, the technology hasn't been tested yet.

My answers:

At one point, I think I lost because we value Bitcoin in Dollars. So, it's "backed" by dollar technically, even when we use Bitcoin to pay for something, it's calculated in $.

Bitcoin's core values are the following: Open source, censorship resistant, decentralized, peer-to-peer and verification of rules (everyone can be part and run a full node).

We don't know it, and it also can be some guy in his basement for all we know. It's core values prove that this is not government funded project, it can't be. How could they benefit? One of the interesting theories is that they released this untested technology to the masses and let them develop it further to then adopt it if it works.

Yes it is speculation, but internet was a speculation as well back in the days. I heard that when they sent out the first bits of information, the whole internet crashed. The technology needs time to adopt, and since there are so many programmers and IT experts around the world, we will see adoption of this technology even faster than ever before.

But here's the kicker that I have been thinking about since we talked: He believes the private/public sectors will adopt the Blockchain, the governments, businesses to further improve their systems. But it will NOT be an open Blockchain, rather a Centralized Private Blockchain. It will just be Database replaced with the word Blockchain, same principles. Non-censorship resistant and not open source.

I want to know what you guys' thoughts are on this. How would you counter these arguments? Let me know because this last thing has been bugging me the whole day!

I don't know if dollar really is backed by gold but if that is true then all currency all over the world is also backed by gold too.

[rohitkaira]

I think no system is self operated and all system require some kind of control or support for proper operation, if we look into information technology many of the systems or software's are available open source and centralized but centralized systems are mass adopted as compared to open source. I think we need to develop some kind of arrangements or technologies which can maintain quality and integrity of blockchains or sooner or later centralized authorities will centralize blockchains.

[kolsernik]

Yes, I think it will be.Closed blockchain within the borders of a certain state.Or blockchain any organization,and healthcare.Understand that an open fully blockchain will undermine the defense capability of any country.In the near future it is likely to be so.

[Ilegendph]

There is no such thing as centralized blockchain. We all know how the technology works, how it become more secure because of decentralization. There are many loop holes in the economist in statement though it true that establishments will use private blockchain but the thing is that, it will cost them a lot to make a blockchain because it needs a lot of people to engage in the network to make it decentralized for security feature and hiring a programmers or a group of programmers that will create, develop and update the network. It still much cheaper to avail services of existing platforms that is proven effective.

[LeGaulois]

I am surprised to see an economist saying the USD is backed by gold...

There is no such thing as centralized blockchain. We all know how the technology works, how it become more secure because of decentralization. There are many loop holes in the economist in statement though it true that establishments will use private blockchain but the thing is that, it will cost them a lot to make a blockchain because it needs a lot of people to engage in the network to make it decentralized for security feature and hiring a programmers or a group of programmers that will create, develop and update the network. It still much cheaper to avail services of existing platforms that is proven effective.

Private blockchains are usually centralized and they do exist. Sure it costs money to create but the rewards are a lot bigger and for a long-term (security, operating costs, time-saving,...)

[aoluain]

Uts not a surprise that blockchain technology is being adopted by governments and private entities
so that they have control over what they create.

This is however nothing to be too concerned about because Bitcoin will continue as it has, untroubled.

Referring to Bitcoin in a $ value is not accurate, 1 bitcoin is just 1 bitcoin. Speculators, exchanges and
others looking to make FIAT profit from it recer to it in FIAT terms.

[darthmaul]

That could be true in many sense but that is not just the case here. Many private organisation or even governments might just make themselves a new sort of blockchain world but I am pretty sure that it is not going to help them at all as it will be limited and they wont be wide spread as the current blockchain is. The current blockchain is offering freedom to the whole world while the private blockchain will be just limited to that particular company, organisation etc where it will work in symphony with the applications of it. So there is lot of cons of that and prose too.