Philippines to launch non-blockchain CBDC in two years

[legiteum]

Here's another reminder that the blockchain architecture is not the only game in town when it comes to creating a digital currency:

Philippines to launch non-blockchain CBDC in two years

From the article:

“Other central banks have tried blockchain, but it didn’t go well.”

My take on this:

"Centralized blockchain" is a technical oxymoron and is a pointless waste of time, money and resources. Central banks--and central anything--should not use blockchain because they don't need this added complexity that will raise the cost to consumers while not adding any value. The blockchain architecture's sole incremental benefit--thwarting government oversight into transactions--is a feature that is only interesting to certain users in certain situations (e.g. public cryptocurrencies like Bitcoin).

Just because Bitcoin has become an incredibly popular investment doesn't mean the technology behind it is the solution to everything.

[franky1]

centralised is usually one company/one server/one collaborating group..
decentralised is independent random people

distributed ledger is decentralised amungst chosen partners(collaborating group)
they call CBDC "distributed ledger technology"(DLT) rather than "decentralised cryptocurrency"

its not going to be PoW with difficulty..
its more of just proof of signature.. like liquid network 'federated transactions'

the way CBDC are going to work is not one dataset overseen only by government, but instead where the 'block' is a multisig between central bank and a dozen chosen commercial banks co-signing to agree units into existence/transfer at top level..
 
all parties keep a log of this(DLT) which also chain/'taint path' back to the previous signed multisig. to have a transaction history of the reserves.
where the latest state is used as the funding reference for each commercials banks share of the currency. where those commercial bank then use their amounts to split down to agents/bank branches/ service levels of amount, which then split down to accounts of possible value for customers

central-bank 1,000,000,000,000        central-bank 350,000,000,000
comercbankA 0                                comercbankA 350,000,000,000
comercbankB 0                          ->   comercbankB 150,000,000,000
comercbankC 0                                comercbankC 150,000,000,000
^ banking partners co-sign the main reserves
^^ imagine this like genesis TX1 of creating 1trillion units, and then deciding which commercial bank gets what portion


v commercial banks then have reserves between each other independent of central bank
vv imagine this like using the output of main reserves as inputs of each commercial banks holdings
comercbankA 350,000,000,000         comercbankA 250,000,000,000
comercbankB 0                         ->    comercbankB 50,000,000,000
comercbankC 0                         ->    comercbankC 50,000,000,000
^only the 3 commercial banks sign between each other

comercbankB 150,000,000,000         comercbankB 50,000,000,000
comercbankA 0                         ->    comercbankA 50,000,000,000
comercbankC 0                         ->    comercbankC 50,000,000,000
^only the 3 commercial banks sign between each other

comercbankC 150,000,000,000         comercbankC 50,000,000,000
comercbankB 0                         ->    comercbankB 50,000,000,000
comercbankA 0                         ->    comercbankA 50,000,000,000
^only the 3 commercial banks sign between each other
^^so now they have their routes between each other to balance out the balance when doing cross-bank transfers

where the commercial banks use their own output as inputs for their own internal accounts of their agents/customers
the customer-route level of payments are monitored and co-signed between user and commercial bank ... not central bank

[mk4]

They can't even secure their databases and government IT infrastructure in general, of course, they're going to be far more likely to screw it up if they used blockchain for whatever reason lmao. They couldn't last a single year without a hack or a database breach.

[franky1]

They can't even secure their databases and government IT infrastructure in general, of course, they're going to be far more likely to screw it up if they used blockchain for whatever reason lmao. They couldn't last a single year without a hack or a database breach.

its still going to use cryptography. of multisig..
and distributed thus needs co-operation between banks..
just not using PoW blocks,

most CBDC are all the same design and will all communicate internationally at top level to a 'm-bridge' network the reserves can be viewed from

[Catenaccio]

Will it be accepted by other nations and will it have better future then digital Peso in Venezuela years ago?

Non-blockchain CBDC, it's joke and if they launch a blockchain CBDC, it will still be centralized and clone of another altcoin.

Clone: Not quality enough to create that CBDC by themselves.
Security: high risk as if an original coin has bug to be exploited, the Phillipines CBDC will be exploited too.

[legiteum]

Will it be accepted by other nations and will it have better future then digital Peso in Venezuela years ago?

Non-blockchain CBDC, it's joke and if they launch a blockchain CBDC, it will still be centralized and clone of another altcoin.

Clone: Not quality enough to create that CBDC by themselves.
Security: high risk as if an original coin has bug to be exploited, the Phillipines CBDC will be exploited too.

Why is is a "joke"? What is wrong with a country replacing its paper and metal money with digital money?

If you consider all sovereign currencies a "joke" (and if so I would assume you don't use such currencies in your everyday life), then I guess it would make sense that your view of a digitized version of that currency would also be a joke, regardless of it's technical implementation.

But every day, billions of people make tens of billions of transactions with national sovereign currencies using physical cash and coins, and there's no blockchain-based cryptocurrency that could come even within several orders of magnitude of handling that demand, let alone at a reasonable cost. Governments need a technical solution to replace physical currency, and blockchain ain't it.

[electronicash]

Philipine government promoted PayMaya.

but we do have Gcash also which is more adopted by merchants, these are digital peso payment apps that are widely used in the country. we use this every day in buying everywhere even in a store on the corner selling street food. give it another year even the people in the most remote islands will be able to use these two.

i doubt the government can develop something on its own. if they can develop something, it will come out to be no different from these 2 but only for the banks.

[m2017]

"Centralized blockchain" is a technical oxymoron and is a pointless waste of time, money and resources. Central banks--and central anything--should not use blockchain because they don't need this added complexity that will raise the cost to consumers while not adding any value. The blockchain architecture's sole incremental benefit--thwarting government oversight into transactions--is a feature that is only interesting to certain users in certain situations (e.g. public cryptocurrencies like Bitcoin).

The word “Blockchain” has become a beautiful wrapper under which governments are trying to slip all sorts of crap to the hamsters. Blockchain is not possible with centralization, because the basis of this technology is that copies of block chains are stored on many different PCs independently of each other. That is, there must be decentralization.

Just because Bitcoin has become an incredibly popular investment doesn't mean the technology behind it is the solution to everything.

Now this is how most government agencies and private companies (startups) see the future. Everyone thinks that life without pseudo-blockchain (that's exactly what they offer) will be impossible and they are trying to implement it everywhere. Even where there is no advantage from it. It's like they're fooling themselves (most likely us) or like they don't really understand what the technology is.

[legiteum]

The word “Blockchain” has become a beautiful wrapper under which governments are trying to slip all sorts of crap to the hamsters. Blockchain is not possible with centralization, because the basis of this technology is that copies of block chains are stored on many different PCs independently of each other. That is, there must be decentralization.

Well, sadly, you "can" create a centralized blockchain, and there are actually a lot of centralized cryptocurrencies out there, some of which are reasonably popular. It's a stupid idea, akin to buying a business jet and using it as a spare bedroom in your backyard, but people "can" do anything.

And I sorta get how they got there. Decentralization comes with an enormous cost in terms of computing and latency. There's no way around it--you are up against the speed of light as a limitation. A truly safe blockchain implementation will never scale beyond a few hundred transactions per second and still have a really slow latency even compared to a credit card transaction--to say nothing of being able to handle large numbers of overall transactions on a permanent basis.

So faced with:

1. The push to make everything "like Bitcoin" because Bitcoin has been so successful as an investment; and,

2. The insurmountable technical limitations of true decentralization;

People paint themselves into an architectural corner by speeding up their implementation the only way possible, which is to centralize it. But even that doesn't get you anywhere near where you need to be for mainstream transaction loads.

But of course if you were just going to create a centralized currency from the get go, you wouldn't do it that way (you would do it this way ).

Just because Bitcoin has become an incredibly popular investment doesn't mean the technology behind it is the solution to everything.

Now this is how most government agencies and private companies (startups) see the future. Everyone thinks that life without pseudo-blockchain (that's exactly what they offer) will be impossible and they are trying to implement it everywhere. Even where there is no advantage from it. It's like they're fooling themselves (most likely us) or like they don't really understand what the technology is.

Yes, definitely. But from what I can tell, many countries are simply in the middle of the learning curve--and many seem to be going the right direction. The limitations of the blockchain architecture are self-evident the minute to you beta test the product--if not well before that if the dev team is diligent and does the proper benchmarks. Governments do a lot of stupid things, but in the long run at least some of them get things right. There have been some good stories of self-service and automation of government functions in various countries. Sometimes it only happens on the third try, but it happens.

[franky1]

The word “Blockchain” has become a beautiful wrapper under which governments are trying to slip all sorts of crap to the hamsters. Blockchain is not possible with centralization, because the basis of this technology is that copies of block chains are stored on many different PCs independently of each other. That is, there must be decentralization.

blockchains are possible centralised/closed source/private
they are called centralised blockchains or private blockchains
as oppose to public decentralised blockchains

not all blockchains have to be open to the public

for instance to stop one employee at a small bank branch in texas from editing a next-gen banking system they can use blockchains where multiple bank branches of the same bank brand have their blockchain but its not advertised/accessed by the public, but also then not able to be edited by one employee
they prefer however to call them "distributed ledger technology" when it comes to closed sourced private blockchains, and such

[The Cryptovator]

If they don't use blockchain, then nothing is new. It will be like the MFS digital money that already exists. So they might just create a separate and new portal for their native currency. I am not sure if worldwide it will be accepted because there wouldn't be on-chain data. To use and see off-chain data have to use CDBC portal. So it will be just an internal algorithm. To be honest, currency is already digital. If I don't need cash, then I don't need to go to the bank. I can use my funds through digital banking and MFS. 

[franky1]

If they don't use blockchain, then nothing is new. .

its new(to banks) in the sense that although its not a block of multiple transactions where there is a hash of combined transactions with the hash of previous block to chain the blocks..

instead think of it as just a transaction chain(1tx=1block(the tx is the block)), using the hash(TXID) of previous multisig, in the newest multisig as input. which all private parties are archiving and wont collectively sign the newest multisig unless all agree on the current state/values of the current multisig value

the central bank + lets say a dozen partner commercial banks. all form part of a multisig. much similar to blockstreams liquid "federated transaction"

[Natsuu]

Philipine government promoted PayMaya.

but we do have Gcash also which is more adopted by merchants, these are digital peso payment apps that are widely used in the country. we use this every day in buying everywhere even in a store on the corner selling street food. give it another year even the people in the most remote islands will be able to use these two.

i doubt the government can develop something on its own. if they can develop something, it will come out to be no different from these 2 but only for the banks.

Yeah if you think about it, its pretty impressive how PayMaya and GCash have become staples in daily life in the Philippines, even for street food purchases. The government might have a tough time coming up with something different especially if it's just another app aimed at banks rather than everyday users. Let's see how it plays out

[legiteum]

If they don't use blockchain, then nothing is new. It will be like the MFS digital money that already exists. So they might just create a separate and new portal for their native currency. I am not sure if worldwide it will be accepted because there wouldn't be on-chain data. To use and see off-chain data have to use CDBC portal. So it will be just an internal algorithm. To be honest, currency is already digital. If I don't need cash, then I don't need to go to the bank. I can use my funds through digital banking and MFS. 

A central bank digital currency replaces physical cash and coins with an electronic payment. This is very different than a credit card transaction because bank accounts are not required, and there is no transaction fee (which enables very small transactions e.g. only a few cents), and the transaction would be identity-free just like cash is.

[thecodebear]

This shouldn't be a surprise to anyone. Govts / central banks are naturally going to use some of the concepts of Bitcoin to create their own digital money upgrades to the fiat banking system. It's a completely different thing than Bitcoin though, regardless of whether it is blockchain tech or not. It's just an upgrade for digital fiat.

[franky1]

This shouldn't be a surprise to anyone. Govts / central banks are naturally going to use some of the concepts of Bitcoin to create their own digital money upgrades to the fiat banking system. It's a completely different thing than Bitcoin though, regardless of whether it is blockchain tech or not. It's just an upgrade for digital fiat.

back in 2015 governments set up a coalition of devs (hyperledger) and those devs(blocksteam was part of) then started their hyperledger(prototypes of CBDC) by using bitcoin as the sandpit box for those sand box tests for hyperledger
its why CBDC uses feature of liquid and LN and why core devs paid by blocksteam were so utopian dreamy about creating those subnetworks and trying to make them famous.. they were sponsored, and yes in the 9 years since, instead of scaling bitcoin for bitcoin users benefit.. those core devs have been calling the subnetwork sandbox tests for hyperledger(cbdc) as "the solution to digital currency"
https://www.coindesk.com/markets/2016/03/29/blockstream-among-10-new-firms-to-join-hyperledger-blockchain-project/

[bbc.reporter]

This might be very much similar to how international pharmaceutical companies use 3rd world countries as their testbed for new drugs being developed before they declare them as safe for the people of first world countries. This is not because these pharmaceutical companies think that the lives of people in 3rd world countries are lower. This might be because the rules and regulations in many 3rd world countries are not strict enough and it is easier for them release new untested medicines commercially.

[franky1]

This might be very much similar to how international pharmaceutical companies use 3rd world countries as their testbed for new drugs being developed before they declare them as safe for the people of first world countries. This is not because these pharmaceutical companies think that the lives of people in 3rd world countries are lower. This might be because the rules and regulations in many 3rd world countries are not strict enough and it is easier for them release new untested medicines commercially.

many many countries are developing CBDC
nothing special or different when it concerns the Philippines, they are just another country added to a growing list
Philippines is not a special case first mover.. other countries are on the list of CBDC's, mostly all using the same model and are going to be inter-communicable with the m-bridge project of BRIC's commonwealth

[bbc.reporter]

@franky1. I was speculating on what they might do. These centralized government agents who are controlled by the rulers who put these people in government in power. CBDC might be Mayer Amschel Rothschild's dream on controlling a country's money to control everything. In the developed countries, the people are more open to express themselves against CBDC, however, in 3rd world countries I reckon the people are more manipulated easily to follow what the government tells them. This might be why CBDCs are being tested beginning in 3rd world countries.

[legiteum]

@franky1. I was speculating on what they might do. These centralized government agents who are controlled by the rulers who put these people in government in power. CBDC might be Mayer Amschel Rothschild's dream on controlling a country's money to control everything. In the developed countries, the people are more open to express themselves against CBDC, however, in 3rd world countries I reckon the people are more manipulated easily to follow what the government tells them. This might be why CBDCs are being tested beginning in 3rd world countries.

Put it this way, if these rulers wanted to control everybody, there would be a lot more straight-forward ways to do it than to digitized their currency. Dictatorships developed all over the world just fine long before there was digital currency.