Is Digital dollar a threat to Bitcoin ?

[krishnaverma]

Recently came across this news
https://www.forbes.com/sites/jasonbrett/2022/02/07/fed-designs-digital-dollar-that-handles-17-million-transactions-per-second/

It is still in testing phase. Do you think this digital dollar can be threat to bitcoin ? My answer is never because it is centralized.

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[1714761070]

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[Upgrade00]

Rather than spamming irrelevant articles across the forum you could add some extra information or thoughts you have on the topic it discusses. That would make more for a discussion than simply posting a line and a one line follow up.

There's also a press board where you can post links, but only reserved for "Notable press hits".

[BenCodie]

Rather than spamming irrelevant articles across the forum you could add some extra information or thoughts you have on the topic it discusses. That would make more for a discussion than simply posting a line and a one line follow up.

There's also a press board where you can post links, but only reserved for "Notable press hits".

+1

Though to answer the question in the title - no - Bitcoin is a threat to all fiat currency and always will be as it is superior. No form of fiat currency will ever be a threat to Bitcoin. They will try to attack it, as they have hundreds or even thousands of times...but they will never beat it.

If anything, digital dollar is a step to mass adoption. As people start to learn how to use a digital dollar they will eventually see the added benefits of using a blockchain like Bitcoin, and will be able to make the transition in comparison to trying to transition from banking apps or cash.

[mk4]

It is a temporary "threat" knowing in a way that a lot of uneducated/misinformed people will think that a CBDC will be a threat to bitcoin, hence having less retail interest in the markets in the short-mid term after a CBDC gets released.

Long term though? Definitely not.

[freedomgo]

Recently came across this news
https://www.forbes.com/sites/jasonbrett/2022/02/07/fed-designs-digital-dollar-that-handles-17-million-transactions-per-second/

It is still in testing phase. Do you think this digital dollar can be threat to bitcoin ? My answer is never because it is centralized.

Not really, I'd rather say that bitcoin is more of a threat to the digital dollar than the other way around.

Anyway, that doesn't really matter because e-dollar/digital dollar and bitcoin have their respective and distinct use why they were created in the first place. People also have their own reason why would they choose bitcoin over e-dollar or e-dollar over bitcoin. This digital dollar is of course controlled by the government, so that will be useless when it comes to guarding ourselves up when it comes to inflation but if in terms of stable coins, digital dollar has the advantage because it doesn't move that much and has less risk compared to the volatility of bitcoin.

[krishnaverma]

Rather than spamming irrelevant articles across the forum you could add some extra information or thoughts you have on the topic it discusses. That would make more for a discussion than simply posting a line and a one line follow up.

I will try to add more information in OP from now on.

But, it will be a positive development for bitcoin and encourage more people to use bitcoins.

How does that happen ? Isn't it more like competition? The people with traditional thinking might go with government backed project.

[pooya87]

"Digital dollar" has existed long before bitcoin did in centralized form and it is not going to change. Each time you use Paypal, credit cards, internet banking, online payments, etc. you are using digital dollar! It does not fall under the same category as bitcoin simply because it is centralized and because of that talking about "threats" is like comparing apples and oranges.

that-handles-17-million-transactions-per-second

That's pathetically low for a centralized payment system.

[Yatsan]

Not even close. Different concepts and different advantages; one is stable and one is volatile. USD based currencies are stable ones while Bitcoin is highly volatile generating profit as an investment. I've said not even close because investors are using these currencies differently; Bitcoin more of an asset while usd based digital currency are for daily transactions, so I don't think one fears another.

Rather than spamming irrelevant articles across the forum you could add some extra information or thoughts you have on the topic it discusses. That would make more for a discussion than simply posting a line and a one line follow up.

I will try to add more information in OP from now on.

But, it will be a positive development for bitcoin and encourage more people to use bitcoins.

How does that happen ? Isn't it more like competition? The people with traditional thinking might go with government backed project.

Not a competition but more of coexistence I guess. The only difference is decentralization and centralization of each. On my end especially when trading, I do prefer using usdt as a mode of payment because it is more convenient to use. But I also doubt one would promote the other currency.

[Hispo]

I think we have already talked about the influence of the CBDCs on Bitcoin on other threads, but anyways...

I must admit that 17 million transactions is an impressive number, but it would not have much influence on Bitcoin since we are talking about two different kind of assets: Centralized and intrusive versus Decentralized and neutral.
I still believe Bitcoin will be okey, as long as the protocol is maintained properly.  

[bittraffic]

The Chinese CBDC wasn't very successful at all. We know China has an authoritarian government that will force its people to use government platforms but it seems not very effective for the Chinese since they are still using the Wechat and etc. There were reports that the Chinese are not using CBDC anymore.

In Nigeria as well, it's also not working, and its due to the adoption of BTC in the country. There could be any different result in any other place or country.

[Wimex]

I don't think it's possible, they are two totally different things, the dollar, even if it is digital, is still controlled by an institution, and depending on how it is managed, it can generate inflation, directly affecting the currency and the community, on the other hand, bitcoin is free of state restrictions, and despite being volatile, it generates many opportunities for the user, such as having full control of their capital or having much more solid growth opportunities.

[Davidvictorson]

It's a tricky one, but I absolutely believe that the digital dollar poses a threat to bitcoin. There is a possibility that the federal government will enact absurd taxes and restrictions. There are a number of ways in which this could negatively impact bitcoin owners, and even lead to a desire to sell their assets. As a result, the Fed will provide bitcoin owners with a tempting offer to convert their funds to the digital dollar at an initial one-to-one exchange rate that will eventually depreciate.

[krishnaverma]

It's a tricky one, but I absolutely believe that the digital dollar poses a threat to bitcoin. There is a possibility that the federal government will enact absurd taxes and restrictions. There are a number of ways in which this could negatively impact bitcoin owners, and even lead to a desire to sell their assets. As a result, the Fed will provide bitcoin owners with a tempting offer to convert their funds to the digital dollar at an initial one-to-one exchange rate that will eventually depreciate.

Is it even possible to create a system to convert crypto assets one to one to something like digital dollar?

[serjent05]

If the government lets things flow naturally, the Digital dollar will never be a threat to Bitcoin.  The only threat to Bitcoin is the government that creates that Digital dollar.  The reason is that the government can impose a regulation that prohibits any Bitcoin transaction or usage of Bitcoin just to promote their CBDC.  It will not only cut people from using Bitcoin but also discourage any future adoption of Bitcoin.

[Quidat]

Recently came across this news
https://www.forbes.com/sites/jasonbrett/2022/02/07/fed-designs-digital-dollar-that-handles-17-million-transactions-per-second/

It is still in testing phase. Do you think this digital dollar can be threat to bitcoin ? My answer is never because it is centralized.

They are creating the opposite, it might really be having that notable feature or something which shows much better in terms of transaction speed and high number on volume but
still people who are seeing that decentralized things is always been better then it would be just simply ignored.They could create all the things they do want but as long it would
be that centralized then people wont really be seeing these things to be interesting.Just like the rest which are trying to make out which interest and recognition
isnt really that much.

[KennyR]

If the government lets things flow naturally, the Digital dollar will never be a threat to Bitcoin.  The only threat to Bitcoin is the government that creates that Digital dollar.  The reason is that the government can impose a regulation that prohibits any Bitcoin transaction or usage of Bitcoin just to promote their CBDC.  It will not only cut people from using Bitcoin but also discourage any future adoption of Bitcoin.

Digital dollars are developed to limit the usage of bitcoin and make people turn towards CBDC. Already many countries have done it, and this will get added to the list. Nothing specific as to make bitcoin down. As said in a post the misunderstanding could make few people get into it at the beginning. This might cause some temporary impact which in the long term gets subsided.

[uneng]

If the government lets things flow naturally, the Digital dollar will never be a threat to Bitcoin.  The only threat to Bitcoin is the government that creates that Digital dollar.  The reason is that the government can impose a regulation that prohibits any Bitcoin transaction or usage of Bitcoin just to promote their CBDC.  It will not only cut people from using Bitcoin but also discourage any future adoption of Bitcoin.

Digital dollars are developed to limit the usage of bitcoin and make people turn towards CBDC. Already many countries have done it, and this will get added to the list. Nothing specific as to make bitcoin down. As said in a post the misunderstanding could make few people get into it at the beginning. This might cause some temporary impact which in the long term gets subsided.

People won't turn towards CBDC, at least bitcoin adopters, because they know the differences betwen bitcoin and the digital fiat, while also aware digital fiat has no difference to fiat. Who is going to adopt CBDCs are the people who don't want to use bitcoin, but for crypto market it doesn't make any difference, nothing changes. It will be the same scenario we face right now. The only problem is that governments start using coercive power to force people using CBDCs and to stop using bitcoin. That would be done through a ban, but I guess most countries are safe from this threat, since governments are adopting relatively friendly stances regards bitcoin and crypto.

[BALIK]

The Chinese CBDC wasn't very successful at all. We know China has an authoritarian government that will force its people to use government platforms but it seems not very effective for the Chinese since they are still using the Wechat and etc. There were reports that the Chinese are not using CBDC anymore.

In Nigeria as well, it's also not working, and its due to the adoption of BTC in the country. There could be any different result in any other place or country.

CBDC failure has nothing to do with bitcoin, and even successful CBDC has no effect on bitcoin, they are basically 2 different assets, and CBDC is simply an upgraded version of Fiat. CBDC is inevitable because we are in the digital age and the government's goal in issuing it is to try to control the people more than to compete with bitcoin. If the digital dollar were to be created, I would consider it a rival to today's stablecoins rather than bitcoin or altcoins.

[franky1]

most CDBC including US, canada, china, sweden, africa all try to emulate the so called "two layer"(no coincidence) of bitcoin-liquid/LN
there is a third (top) layer joining these CBDC called the m-bridge which is like the IMF SDR reserves network

yep certain corporate sponsored devs used/abused bitcoin to sandbox test CBDC future decisn using bitcoin and sub networks

the US trial variant(hamilton) of CBDC has a 2 second "blocktime" which has caused in tests bottlenecks of settling 1.7m/2 seconds where it would only be 100% at 3seconds+ for 1.7m tx fully settled

the blocks are not mined nor staked. they are just premined units put into multisig signed tx's(for commercial bank reserves).. where by the transactions in the block are collated and signed by trusted parties(central bank + certain commercial banks)

below the blocks. are the smart contract networks that[as said above] assign reserves in multisig between commercial banks
and then the commercial banks act as hubs for customers payments in their own sub network in milli second(0.07sec) payments

where funds loop through commercial banks smart contracts and the commercial banks then swap reserves between each other every 2-3 seconds to settle the balances out


                       central bank
                    /          |          \                         blockchain
    commerce --- commerce --- commerce
   commerce --- commerce --- commerce
   /     |   \          /     |   \          /     |   \         sub networks
user user user  user user user user user user
CBDC fiat wont be deflationary. they will continue to be able to co-sign more value into existence at the blockchain level to however much reserve amounts the want thus devalue the holdings at the subnetwork level of users

users cant just take their keys to any commercial bank wallet app it is multisig meaning they would have to set up new multisig with new (account) at other commercial bank and send funds across (like opening new account to close first account)

though commercial banks "autopilot" their tx signing of a users signed payment, commercial banks can refuse to co-sign if certain rule breaks occur

though the user database of KYC stays at the subnetwork stage, the commercial banks can report certain activities to financial authorities of criminal investigation where the authorities can then get a court order to view all payment KYC details of suspected criminal act  from the commercial bank involved

in short the Central bank is not monitoring all user payments, they delegated that role to the commercial banks, the central bank and financial action task force/regulators only receive the suspicious activity

[nullama]

Recently came across this news
https://www.forbes.com/sites/jasonbrett/2022/02/07/fed-designs-digital-dollar-that-handles-17-million-transactions-per-second/

It is still in testing phase. Do you think this digital dollar can be threat to bitcoin ? My answer is never because it is centralized.

It's basically going to be another altcoin competing with Bitcoin in my mind.

Also, I'm sure there will be some issues with CBDCs as they're going to be implemented per country in different ways, and somehow they'll be talking to each other.