Do governments need a Blockchain?

[allthebitandbobs]

Actually mate, CBDC is a form of crypto too. It is because they share the same technology, you know the Blockchain. So they can in fact be transparent too. It is just that they are fully centralized, so may be manipulations can take place as well. In these kind of coins or tokens, freezing is so popular. But is freezing a kind of manipulation too? Hmm..

Yes, they can be called cryptocurrencies but that is technically. Like I have explained before, they make use of blockchain technology but the government of all countries that have created them will make it bold to their citizens that it is not cryptocurrencies but it make use of blockchain technology. I explained that.

Right, as you explained previously, cryptocurrencies does not necessary mean blockchain. Blockchain is the entire network on which the cryptocurrencies are built so I think government is not really interested about cryptocurrencies but the technology being used. Government have already studied and analysed the entire blockchain technology which makes them confident they can integrate blockchain in their economical system. They are still a bit sceptical though which might be delaying the process.

If government launches a new cryptocurrency built on their exchange than that coin might be called centralized crypto as the government would be involved in here. I doubt if that centralized crypto can ever gain traction.

[summonerrk]

Governments are keen on launching digital currencies of their own (aka CBDCs) in an effort to undermine Bitcoin. There's a lot of "buzz" surrounding Blockchain tech these days. But due to the centralized (permissioned) design of CBDCs, there might be no need for a Blockchain after all. Governments can just use an ordinary database system that would serve as the "ledger" for their very own digital currency. Or they can make a partnership with existing payment companies (eg: VISA and Mastercard) to help deploy CBDCs. All without the need for a Blockchain.

I mean, what use would a private Blockchain network have? The real security benefits exist on permission-less blockchain networks. Not the other way around. Why not build their CBDCs on top of Bitcoin instead (like a sidechain)?

Thoughts?

Government blockchains are an attempt to control the situation. But, as a rule, a national blockchain will be completely transparent. After all, the word "state" is synonymous with "non-anonymity," and in the country where I live, a national messenger was recently launched that acts completely like a virus, scouring all smartphone apps and demanding maximum permissions, even to read the owner's messages. This is disgusting. And I don't believe that any government in the world will create a completely honest blockchain that will serve the good. It will always be an attempt to monitor the actions and income of the population.

[Cryptomultiplier]

Actually mate, CBDC is a form of crypto too. It is because they share the same technology, you know the Blockchain. So they can in fact be transparent too. It is just that they are fully centralized, so may be manipulations can take place as well. In these kind of coins or tokens, freezing is so popular. But is freezing a kind of manipulation too? Hmm..

Yes, they can be called cryptocurrencies but that is technically. Like I have explained before, they make use of blockchain technology but the government of all countries that have created them will make it bold to their citizens that it is not cryptocurrencies but it make use of blockchain technology. I explained that.

Right, as you explained previously, cryptocurrencies does not necessary mean blockchain. Blockchain is the entire network on which the cryptocurrencies are built so I think government is not really interested about cryptocurrencies but the technology being used. Government have already studied and analysed the entire blockchain technology which makes them confident they can integrate blockchain in their economical system. They are still a bit sceptical though which might be delaying the process.

If government launches a new cryptocurrency built on their exchange than that coin might be called centralized crypto as the government would be involved in here. I doubt if that centralized crypto can ever gain traction.

I hope we are aware that if we remove PoW and decentralization from the Blockchain, we have made Bitcoin simply centralized and needing permission to function. It would be no different from fiat.

However, if government of any countries decide to build the CBDC and make it function on any high performance database with an API, it may then be controlled by the central bank because the Blockchain would obviously be slow and useless without PoW and decentralization.

[Royal Cap]

First of all, I want to say that Bitcoin is Bitcoin. No matter how hard the government tries, it will not be able to take control of Bitcoin. However as far as I understand blockchain is not mandatory for CBDC, the government can run it with a simple database if it wants. But I think they mainly want to show an image of transparency and auditability by using blockchain, although the control is in their hands, So it may not be for the whole technology, but rather to make the system look a little more modern. And building a CBDC on Bitcoin is actually difficult, because the government will not get full control here. The real goal of CBDC is to maintain control and tracking. So they will choose something where the rules, access will be in their hands.

[bitcoindusts]

I mean, what use would a private Blockchain network have? The real security benefits exist on permission-less blockchain networks. Not the other way around. Why not build their CBDCs on top of Bitcoin instead (like a sidechain)?

I think the government won't build their CBDCs on top of Bitcoin because it is way easier to create a new system if they are already familiar with it than integrating it to another system that they don't have control.  So I guess the main issue here is control since it will be way more complicated for the government if they don't have full control over the network since the nature are conflicting one decentralized and another one is centralized.  Why going on the trouble of having a half-controlled environment when they can just create an environment where they have full control.

[Oluwa-btc]

We all do for transparency but they don't even listen, they rebuff such conversations with advocates and journalists who attempts to throw it into their faces.
The UK politicians actually, this exactly how they behave. Utilising Blockchain increases privacy and reducing control from their regulations on citizens so the government will never be fully in support of it. It is the same reason why they keep on pushing CBDC's into our faces. Too many Pr and adverts about CDbs's right now, they know exactly what they're doing.

[tygeade]

Need is a big word, I would say that they avoid blockchain. If being transparent with their transactions was a thing, and if we could watch every money being moving around, we would be more mad. But the sad thing is, people are kidding themselves if they think that this could stop corruption and governments, politicians, leaders, would stop stealing our money.

Reality is that they are already out in the open with so many things, like USA clearly shows who bribes who, and yet they are all doing fine even though they are getting bribed by the same companies that they are making laws for. They are ok with world getting dirtier or worse, as long as they get paid from those companies, and we can see it, and yet people still vote for them.

[Abiky]

First of all, I want to say that Bitcoin is Bitcoin. No matter how hard the government tries, it will not be able to take control of Bitcoin. However as far as I understand blockchain is not mandatory for CBDC, the government can run it with a simple database if it wants. But I think they mainly want to show an image of transparency and auditability by using blockchain, although the control is in their hands, So it may not be for the whole technology, but rather to make the system look a little more modern. And building a CBDC on Bitcoin is actually difficult, because the government will not get full control here. The real goal of CBDC is to maintain control and tracking. So they will choose something where the rules, access will be in their hands.

Building a CBDC in Bitcoin is not as difficult as you thought it would be. Because governments can always take the "sidechain" or L2 approach to allow their CBDC to retain the security benefits of the main Bitcoin blockchain, while giving them full control of their currency. Why they haven't done this yet, is beyond me. My guess is that they're afraid their CBDC will collapse if Bitcoin ceases to function in the future. I mean, nothing is guaranteed to last forever.

Governments their own system does come with its benefits. But considering that governments are always striving for power/control, they're better off using a centralized database than Blockchain itself. While permissioned Blockchains exist (usually private chains), they're less secure and reliable than permissioned-less ones. China already has its own CBDC, but I'm not sure if it makes use of Blockchain tech. At least we know, CBDCs will replace cash in the long run.

[Patikno]

Governments are keen on launching digital currencies of their own (aka CBDCs) in an effort to undermine Bitcoin. There's a lot of "buzz" surrounding Blockchain tech these days. But due to the centralized (permissioned) design of CBDCs, there might be no need for a Blockchain after all. Governments can just use an ordinary database system that would serve as the "ledger" for their very own digital currency. Or they can make a partnership with existing payment companies (eg: VISA and Mastercard) to help deploy CBDCs. All without the need for a Blockchain.

I mean, what use would a private Blockchain network have? The real security benefits exist on permission-less blockchain networks. Not the other way around. Why not build their CBDCs on top of Bitcoin instead (like a sidechain)?

Thoughts?

Government will not want to use Blockchain, hence is not something they can influence, they won't bother investing, not only that, Blockchain will expose their dirty lining, hence they would just avoid such technology. at best CBDCs would be their best option, and if you notice the antecedent of various government, you see that they all want to tow towards CBDCs. So in answering your question, government do need Blockchain, especially to trace the transactions of government finances and for public scrutiny.

I completely agree with you, a bad government would definitely not want to use Blockchain. Because, Blockchain technology wouldn't benefit them, but a clean government would definitely want to use Blockchain. If, the government didn't see Blockchain as a threat, they would have already used it to increase transparency (to gain more public trust). I doubt the government is not yet literate in this technology, and I am sure they have realized its very useful existence, but they are avoiding it because they fear public scrutiny.

As far as I know, Georgia is a country that is eager to integrate blockchain into its government. From what I have read, Georgia has succeeded in reducing corruption in the country, and I think this has something directly to do with the blockchain implementation they are using, especially regarding its use for recording transactions on the Bitcoin blockchain. I believe this is what happens when a country is serious about increasing transparency, building public trust, and combating corruption. Cmiiw.

Georgia has previously used blockchain in government operations, including a 2017 agreement to record over 100,000 property transactions on the Bitcoin blockchain

Georgian authorities said transferring data from the National Agency of Public Registry to the blockchain could “ensure even greater protection of property rights, transparency and reliability of processes.” The of real estate is also under consideration.

References : - indozone.id - The True Story of Georgia, Which Successfully Eliminated Corruption Overnight ( You need to read it using "Indonesian" to "English" translation )
                      - financemagnates.com - Georgia Advances Land Registry and Real Estate Tokenization Following Dubai

[shinratensei_]

I mean, what use would a private Blockchain network have? The real security benefits exist on permission-less blockchain networks. Not the other way around. Why not build their CBDCs on top of Bitcoin instead (like a sidechain)?

I think the government won't build their CBDCs on top of Bitcoin because it is way easier to create a new system if they are already familiar with it than integrating it to another system that they don't have control.  So I guess the main issue here is control since it will be way more complicated for the government if they don't have full control over the network since the nature are conflicting one decentralized and another one is centralized.  Why going on the trouble of having a half-controlled environment when they can just create an environment where they have full control.

Clearly the government want database level control where they can modify it as they will. CBDC wasn't meant to be immutable, it's still an extension of government to control their economy through fiats.
That is the hint that I could pick up with how CBDC entire's system was designed. It is always because control.

[Rhow]

The purpose of blockchain and CBDC is reviewed well, then it will be possible to easily determine the difference. When such a digital currency is created under the Central Bank Authority, all the transactions there will be visible. If the authority wants, it can tempted any information. For some reason, it can stop the user's money or transactions. Sometimes, a situation like freezing an account can also arise. If a specific person wants, he can monitor those accounts and influence them. It will work like the conventional banking system. I don't think there is any need for blockchain for central banks to manage their currencies.

It is true if blockchain technology is used, there will be some changes in centralization. Because at that time, it is possible to reduce single control. You will not have to depend on anyone's trust. No one will be able to stop anyone's transactions. But there is no opportunity to be independent like Bitcoin. No one can stop Bitcoin if they want. Anyone can start a Bitcoin node from any part of the world and keep the Bitcoin network active. Even if transactions are stopped in a specific place, it will not be possible everywhere. The most important thing is that Bitcoin does not have a single control, but if the government makes it a central bank currency, it will be centralized.

[Vaskiy]

What is a government for? It needs to establish safety measures for its citizens, fulfilling the needs of the people. It can be jobs, infrastructure, transportation, education, or finance. Every government steers towards betterment, but they don't achieve it most of the time. Most of the time the reason behind the inefficiency of the government will be the corruption from the top to the bottom order of the government. How can this be corrected? A blockchain that gives transparency in fund allocation and the status of projects. Governments need a blockchain, but they never take such initiative. As an alternative, they took CBDC, which is completely a centralized system to give added power to the government.

[alastantiger]

I think the government won't build their CBDCs on top of Bitcoin because it is way easier to create a new system if they are already familiar with it than integrating it to another system that they don't have control.  So I guess the main issue here is control since it will be way more complicated for the government if they don't have full control over the network since the nature are conflicting one decentralized and another one is centralized.  Why going on the trouble of having a half-controlled environment when they can just create an environment where they have full control.

The government knows that they need the blockchain but they are still trying to identify which of the blockchain that they are going to use in creating their own new currency, they definitely won't want to use the decentralised blockchain because they know that with this they will have no power over the transactions going on on the blockchain but if they use a centralised blockchain then they can control and monitor everything.

The blockchain can be both decentralised and centralised it is not necessary a must that a blockchain must be decentralised but since Bitcoin is decentralised I don't think the government will want to create their new currencies on the Bitcoin blockchain. The government understands the power of the blockchain and they know that their current banking system can't compete with the blockchain hence they want to adopt this technology but still they want to do this while having control.

[Abiky]

What is a government for? It needs to establish safety measures for its citizens, fulfilling the needs of the people. It can be jobs, infrastructure, transportation, education, or finance. Every government steers towards betterment, but they don't achieve it most of the time. Most of the time the reason behind the inefficiency of the government will be the corruption from the top to the bottom order of the government. How can this be corrected? A blockchain that gives transparency in fund allocation and the status of projects. Governments need a blockchain, but they never take such initiative. As an alternative, they took CBDC, which is completely a centralized system to give added power to the government.

That's only true if the government is "clean" or "honest". But we all know most (if not all) governments are corrupt. They wouldn't want to use Blockchain because it's transparent by design. Their schemes will be visible by the public. Governments can either make their own sidechain which uses Zero Knowledge Proofs (for privacy) or a private chain of their own. Or they can just "ditch" Blockchain altogether and use an ordinary database system.

The hype/buzz surrounding Blockchain and crypto, is because they're a novel tech. It could be all over once CBDCs are rolled to the public. We can never predict what will happen in the future. So I'd hope for the best.