[2019-03-21] Blockchains Have Merit, But Cryptocurrencies Won’t Take Over

[bbc.reporter]

They are spinning the issue to be suitable for their own goals.

In any case, this is what the IMF and the World Bank do. They lend 3rd world countries money, so much money that they know it will not have the ability to pay them back. Once this is achieved, they will have full control of that country's policies on governmental and financial matters. They will own that country.

What would occur if that country's citizens begin holding a currency which cannot be controlled? Who will have the last laugh?



The International Monetary Fund published a report on cryptocurrencies. Within the report titled ‘Back-to-Basics’, the Finance & Development experts explain some regular economic terms and concepts that readers encounter on a daily basis. The topic of cryptocurrency has become the first to be discussed by the Fund’s experts after a long hiatus.

In the report, the Fund attempted to provide a basic description of what cryptocurrencies are and how they function. However, it is hard to stay unbiased when it comes to the thorny concept of virtual money.

Even though we are nowhere near what could be considered mass adoption yet, digital assets are subjectively gaining in popularity. Many traditional financial institutions and tech companies are currently experimenting with blockchain technology and looking for ways to get engaged in the industry.

However, the International Monetary Fund officials are not on the same page in regards to the general excitement about this new budding concept of money. According to IMF economist Antoine Bouveret and assistant director Vikram Haksar, virtual coins do not fulfill basic functions of money, such as being a store of value, means of exchange, and unit of account.

Read in full https://beincrypto.com/imf-blockchains-have-merit-but-cryptocurrencies-wont-take-over/

IMF report https://www.imf.org/external/pubs/ft/fandd/2018/06/what-are-cryptocurrencies-like-bitcoin/basics.htm

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[figmentofmyass]

In any case, this is what the IMF and the World Bank do. They lend 3rd world countries money, so much money that they know it will not have the ability to pay them back. Once this is achieved, they will have full control of that country's policies on governmental and financial matters. They will own that country.

What would occur if that country's citizens begin holding a currency which cannot be controlled? Who will have the last laugh?

it's a high risk/high reward bet. bitcoin still has a very binary future---it's probably going to be worth quite a lot (millions of $$) if mass adoption happens, or otherwise very very little (~$0). a government would be foolish to invest everything, but i think those governments/central banks that start building bitcoin reserves first will probably profit the most, and it could certainly have an effect on geopolitical affairs.

According to IMF economist Antoine Bouveret and assistant director Vikram Haksar, virtual coins do not fulfill basic functions of money, such as being a store of value, means of exchange, and unit of account.

give it 10-20 more years.

[Carlton Banks]

bitcoin still has a very binary future---it's probably going to be worth quite a lot (millions of $$) if mass adoption happens, or otherwise very very little (~$0)

That made sense as a prudent statement in 2008 (when Satoshi said it), I'm not convinced it makes sense now. The tech has demonstrated how resilient it is, and how attractive that is. It's one big positive feedback loop, and it's difficult to see how that can be disrupted now.
 

According to IMF economist Antoine Bouveret and assistant director Vikram Haksar, virtual coins do not fulfill basic functions of money, such as being a store of value, means of exchange, and unit of account.

give it 10-20 more years.

No need. Bitcoin is objectively storing value, being exchanged in trade, and used as a unit of account today.

It's unstable in all those respects. All currencies are unstable in all those respects.

• Bitcoin is less stable, but increasing in value; fiat currencies are more stable, but decreasing in value
• Trade involving Bitcoin is increasing; trade involving fiat is declining (or at best static)
• The number of people using Bitcoin to account for their wealth is increasing; price inflation in fiat denominated goods/services/assets implies that using fiat to account for wealth is in decline

It's difficult to see how Bitcoin's momentum can be stopped. The design was very carefully conceived precisely to make it difficult to stop, and attractive to users.

[Lucius]

In any case, this is what the IMF and the World Bank do. They lend 3rd world countries money, so much money that they know it will not have the ability to pay them back. Once this is achieved, they will have full control of that country's policies on governmental and financial matters. They will own that country.

What would occur if that country's citizens begin holding a currency which cannot be controlled? Who will have the last laugh?

This is how they work, and this is not nothing new. Money is one of the most powerful tools for IMF to control the world or to shape it as they wish, with the cooperation of the World Bank. It is almost the same situation when you as person need some money, and you can not just go to bank and get bank loan. You take money from people who have very high interest rates and they do not require any paper work. If you can not pay back what you take, they will own you and everything you have.

I am not sure that bitcoin can solve this problem, at least as far citizens are involved only. Governments could possibly switch to bitcoin, but I doubt they will do that (maybe some third world countries). We should not underestimate the big players like IMF or World Bank, power is on their side and bitcoin is currently poses no threat for them.

[Wicarne]

to be honest, I did not really understand what the essence of this news. And especially I do not believe in the growth of the market in the next 6 months. So we just have to wait.....

[riritsurya1202]

We should not underestimate the big players like IMF or World Bank, power is on their side and bitcoin is currently poses no threat for them.

Yep, they've made some countries gone from bad to worse. I'm not surprised they'll pull this act sooner or later. I still believe Bitcoin will survive if they start the crackdown. We've lots of tools to survive, VPN, etc.

to be honest, I did not really understand what the essence of this news. And especially I do not believe in the growth of the market in the next 6 months. So we just have to wait.....

In essence: IMF does not like Bitcoin.

[Harlot]

As far as I know the IMF and the World bank have a strict loan structure that only a few countries capable can even lend in them. That is why most under developed countries tend to borrow money from other countries. That is why we are seeing China as the number one suspect for doing "debt traps" in which the Chinese government knows that this under developed countries don't have the ability to pay that their main goal really is for them taking over their assets. So far the countries who fell victim recently are Uganda and Zambia.

[cr1776]

...
According to IMF economist Antoine Bouveret and assistant director Vikram Haksar, virtual coins do not fulfill basic functions of money, such as being a store of value, means of exchange, and unit of account.
...

IMF and economist don't belong together.  In fact most of the economists are just guessing anyway or serving their globalist masters who are scared to death that money outside their control (and portable) will thrive.

[bbc.reporter]

As far as I know the IMF and the World bank have a strict loan structure that only a few countries capable can even lend in them. That is why most under developed countries tend to borrow money from other countries. That is why we are seeing China as the number one suspect for doing "debt traps" in which the Chinese government knows that this under developed countries don't have the ability to pay that their main goal really is for them taking over their assets. So far the countries who fell victim recently are Uganda and Zambia.

However, America also has borrowed money in the trillions from China. Will China also own and takeover America's assets?

I reckon they might have problems collecting for payment hehehe.

[vit05]

Bitcoin does not need to completely dominate the world or be used by global institutions to be successful in its purpose. These institutions are still commenting, in fear, about the possibility of paper money being totally replaced by virtual money. This has already occurred. And paper money will soon have no use. Everything will be virtual, with life only on the internet.

The discussion will take place more on the control in the issuance and audit of the national money. And then cryptocurrencies may prove to be an excellent alternative.

[webtricks]

I don't know how being a substitute of money is considered as a only mean success of Bitcoin by many. I believe Bitcoin or cryptocurrencies as a whole have much more advantages than the present form of money. We can't speculate money but we can speculate on Bitcoin's value. So it is wrong to put both money and cryptos in same bag as most of the governments and authorities are doing. It shows they aren't fully aware of what Blockchain provides. Instead of just being token serving basic features of money, cryptocurrencies provide much more with the features like Proof of Work, Public Ledger, transparency, etc.

[buwaytress]

bitcoin still has a very binary future---it's probably going to be worth quite a lot (millions of $$) if mass adoption happens, or otherwise very very little (~$0)

That made sense as a prudent statement in 2008 (when Satoshi said it), I'm not convinced it makes sense now. The tech has demonstrated how resilient it is, and how attractive that is. It's one big positive feedback loop, and it's difficult to see how that can be disrupted now.

Agreed. It's still an experiment for me, but the likelihood of it becoming worth quite a lot more than it is today has to be much, much higher than it becoming worth very little, at least in the foreseeable timeframe where a generation or two after me are still alive and using it.

According to IMF economist Antoine Bouveret and assistant director Vikram Haksar, virtual coins do not fulfill basic functions of money, such as being a store of value, means of exchange, and unit of account.

give it 10-20 more years.

No need. Bitcoin is objectively storing value, being exchanged in trade, and used as a unit of account today.

It's unstable in all those respects. All currencies are unstable in all those respects.

And we can point to objective users (users, merchants, who apart from transacting in Bitcoin, otherwise have no interest in its development) who are using Bitcoin exactly for all the above, except maybe unit of account. I've got clients already happy to pay in Bitcoin, but it's not a big deal for them. It's just adding another method of payment in their eyes.

[NeuroticFish]

However, the International Monetary Fund officials are not on the same page in regards to the general excitement about this new budding concept of money. According to IMF economist Antoine Bouveret and assistant director Vikram Haksar, virtual coins do not fulfill basic functions of money, such as being a store of value, means of exchange, and unit of account.[/i]

Let them believe what they want. As long as they allow crypto interact with the financial world they have the monopoly on, it's a good start. As long as crypto have no merit, not good, and whatever they think, it's not seen as a threat. Perfect.
We need them allow crypto develop. And that can happen easier if there are less enemies.

How long it took to evolve from gold coins to printed bills? Where they accepted happily by everybody from start? Bitcoin will grow more and at some point it'll take its deserved place. But we need (much) more patience.

[gentlemand]

So 'blockchain' not Bitcoin once more.

I don't see how a supposedly educated person working in finance can believe a 'file storage' system that requires the cooperation of thousands of validators can possibly operate without the incentive for them to put the work and resources in to validate, store and maintain that info.

How can you go through life without making the most simplistic of links?

[BitHodler]

That made sense as a prudent statement in 2008 (when Satoshi said it), I'm not convinced it makes sense now. The tech has demonstrated how resilient it is, and how attractive that is. It's one big positive feedback loop, and it's difficult to see how that can be disrupted now.

Agreed. It makes no sense anymore. The very fact that institutions are building the infrastructure around it just shows how much confidence there is in Bitcoin. They wouldn't do it if it was totally useless/worthless.

It wouldn't even surprise me if quite some institutions low-key went into fomo mode back in 2017 because their clients were begging for it. In order to avoid similar situations, they'll act as exchange themselves eventually.

In terms of the fundamentals, LN growing is super bullish, especially when Square as first mayor entity utilizes it to improve their platform and offer people the speed and convenience they are asking for.

Do you have an idea when we can expect Scnorr to finally make it into an official client release?

[Harlot]

As far as I know the IMF and the World bank have a strict loan structure that only a few countries capable can even lend in them. That is why most under developed countries tend to borrow money from other countries. That is why we are seeing China as the number one suspect for doing "debt traps" in which the Chinese government knows that this under developed countries don't have the ability to pay that their main goal really is for them taking over their assets. So far the countries who fell victim recently are Uganda and Zambia.

However, America also has borrowed money in the trillions from China. Will China also own and takeover America's assets?

I reckon they might have problems collecting for payment hehehe.

Well there has been a lot of rumors surrounding Yuan taking over the USD but the thing is this is a myth at best. The thing is there is still a lot of difference between a developed country borrowing money from China and an underdeveloped county borrowing from them. USA will only borrow money to the point they know that they can payback the amount in the given time, unlike this underdeveloped countries who are willing to risk their own assets just to have some fresh cash in them.

[lukew]

Cryptocurrencies as they are won't work in the real world, especially with the focus on investment and earning rather than making a usable transaction system. A £1.50 transaction (on testnet at least) ends up over £2 with network fees. The fees are fine if it's thousands but even then, it's free with the banking system. I can send a penny or £50,000 and neither cost me anything. Where is the incentive to use bitcoin when it costs more, takes longer to confirm payments, and if I snap another phone in half I've lost everything? Obviously if I actually used bitcoin then I'd have backups and multiple devices, but for most people that's just extra work when the system they know and use has none of these issues.

If crypto is going to become a viable transaction system for the masses, it needs to change and not be it's own "currency" that needs exchanging with massive price volitility.

[Carlton Banks]

A £1.50 transaction (on testnet at least) ends up over £2 with network fees.

Fees are not fixed, you just made all that up.

Minimum fees are less than half of $0.01. On Lightning, they're 10,000 times less than that.

The fees are fine if it's thousands but even then, it's free with the banking system. I can send a penny or £50,000 and neither cost me anything. Where is the incentive to use bitcoin when it costs more, takes longer to confirm payments, and if I snap another phone in half I've lost everything? Obviously if I actually used bitcoin then I'd have backups and multiple devices, but for most people that's just extra work when the system they know and use has none of these issues.

If crypto is going to become a viable transaction system for the masses, it needs to change and not be it's own "currency" that needs exchanging with massive price volitility.

It isn't pitched as a viable transaction system for the masses, it's pitched as a viable transaction system for people who don't want their money to be controlled or inflated. Banking system can't compete with Bitcoin version 0.1.0 when it comes to control and inflation, let alone today's Bitcoin

[1Referee]

Cryptocurrencies as they are won't work in the real world, especially with the focus on investment and earning rather than making a usable transaction system. A £1.50 transaction (on testnet at least) ends up over £2 with network fees. The fees are fine if it's thousands but even then, it's free with the banking system. I can send a penny or £50,000 and neither cost me anything. Where is the incentive to use bitcoin when it costs more, takes longer to confirm payments, and if I snap another phone in half I've lost everything? Obviously if I actually used bitcoin then I'd have backups and multiple devices, but for most people that's just extra work when the system they know and use has none of these issues.

If crypto is going to become a viable transaction system for the masses, it needs to change and not be it's own "currency" that needs exchanging with massive price volitility.

It's clear that you aren't actually using Bitcoin on a daily basis. I do almost on a daily basis, and can tell you right now that I haven't paid more than $0.10 in fees for over a year, and that's me being generous. Me being less generous means fees of up to $0.05 and they almost always confirm by the first next block.

Where people tend to go wrong is that they try to consolidate too many inputs at once but not include a fee to match the byte size of the transaction. Altcoins might not charge you anything for such transactions because barely anyone uses them, but Bitcoin's block space isn't freely available like that.

As for the longer to confirm part, transactions through financial institutions never fully confirm. Usually there is a 180-360 day time frame where transactions can be reversed from the client side, but the institution can do so even 5-10 years later.

[bbc.reporter]

As far as I know the IMF and the World bank have a strict loan structure that only a few countries capable can even lend in them. That is why most under developed countries tend to borrow money from other countries. That is why we are seeing China as the number one suspect for doing "debt traps" in which the Chinese government knows that this under developed countries don't have the ability to pay that their main goal really is for them taking over their assets. So far the countries who fell victim recently are Uganda and Zambia.

However, America also has borrowed money in the trillions from China. Will China also own and takeover America's assets?

I reckon they might have problems collecting for payment hehehe.

Well there has been a lot of rumors surrounding Yuan taking over the USD but the thing is this is a myth at best. The thing is there is still a lot of difference between a developed country borrowing money from China and an underdeveloped county borrowing from them. USA will only borrow money to the point they know that they can payback the amount in the given time, unlike this underdeveloped countries who are willing to risk their own assets just to have some fresh cash in them.

I reckon China would need to be prepared for an attack from the United States military if they were planning something like that hehehe.