Is there room for a State Run Cryptocurrency?

[Scott-Maxwell]

Hi,

I've been asking for opinions about a proposal that's come up here in Scotland.  We're going to the polls in the next month to decide whether we want to split from England and become an independent country - basically the end of the United Kingdom that's lasted 400 years.

There's been plenty of discussion not only on whether we should, but whether we could (practically.)  One of the major stumbling blocks is the use of GBP - the Bank of England has said a post-independent Scotland can't use it.  Bit mean, but there you are.

So the question came up - If Scotland needs a new currency, why not set up a State-Run Cryptocurrency?

Here's my thoughts on the issue. 

http://cryptocurrencymadesimple.com/should-scotland-set-up-a-state-run-cryptocurrency/

Also, it appears that Ecuador got there first:

http://cryptocurrencymadesimple.com/ecuador-nationalise-cryptocurrency/

Would love to here what you guys think.

[1714854897]

1714854897

[1714854897]

1714854897

[tee-rex]

Hi,

I've been asking for opinions about a proposal that's come up here in Scotland.  We're going to the polls in the next month to decide whether we want to split from England and become an independent country - basically the end of the United Kingdom that's lasted 400 years.

There's been plenty of discussion not only on whether we should, but whether we could (practically.)  One of the major stumbling blocks is the use of GBP - the Bank of England has said a post-independent Scotland can't use it.  Bit mean, but there you are.

So the question came up - If Scotland needs a new currency, why not set up a State-Run Cryptocurrency?

Here's my thoughts on the issue. 

http://cryptocurrencymadesimple.com/should-scotland-set-up-a-state-run-cryptocurrency/

Also, it appears that Ecuador got there first:

http://cryptocurrencymadesimple.com/ecuador-nationalise-cryptocurrency/

Would love to here what you guys think.

State-run cryptocurrency would just be another form of fiat. Decentralization is what differentiates, say, bitcoin from dollar and other state-controlled currencies, that is absence of the governing body (central bank) which is given the privilege of emitting currency monopolistically.

[r34tr783tr78]

The problem with centralized currencies (digital or not: fiat currently is mostly digital, just a series of numbers on a database of the central bank, in favor of some commercial bank) is that they can be created out of thin air in unlimited numbers. Therefore, they are inflationary and can create some suspitions.

[devphp]

If it's created with a limited supply and no more can be added to that supply (a PoS coin most likely, because PoW is too costly and others would be mining if it was PoW) and then distributed among the population, I don't see why it wouldn't work, except it'd be utopia and the government would have to considerably shrink in size because they can't issue more of it, that's why they wouldn't do it in the first place, because they like to issue more currency when they run out of money

[Pente]

Why not just adopt Bitcoin itself as a main currency? You could even set up a fractional banking system based on top Bitcoin. The first government to do this is going to have a huge economic advantage for the rest of this century.

[alani123]

But ism't the point of cryptocurrency that there's no central authority? All the freedome it can offer stems from that.

[BtcGains]

Why not just adopt Bitcoin itself as a main currency? You could even set up a fractional banking system based on top Bitcoin. The first government to do this is going to have a huge economic advantage for the rest of this century.

There are still way to many liabilities for a government to implement bitcoin as a main currency
There are no cards and if there were you still can't trace payments in anyway like you can with a normal card unless bankers have accounts with their info on it which completely defeats the purpose of a decentralised currency.
If a government adopted Bitcoin, would you still call it decentralised? I don't think so

[Swordsoffreedom]

I would say it would be a bit unusual the mintchip is a project in Canada that was abandoned that had a similar aim
The Ecuador one will be interesting since it would process and secure transactions but if they are the main developers the supply of coins could be forked at any time so its hard to say what its standby value would be.

[Yakamoto]

Here's the perfect example;

Paypal, from the American government.

Modern banking, just run by a system of banks, regulated by the government.

Do we need cryptos that are state-run?

That takes away from the decentralization aspect.

[twiifm]

But ism't the point of cryptocurrency that there's no central authority? All the freedome it can offer stems from that.

No the point is no Central Bank. 

[twiifm]

Why not just adopt Bitcoin itself as a main currency? You could even set up a fractional banking system based on top Bitcoin. The first government to do this is going to have a huge economic advantage for the rest of this century.

The problem is they can't control the money supply.   In crisis,  things like Greece would happen

[Yakamoto]

Why not just adopt Bitcoin itself as a main currency? You could even set up a fractional banking system based on top Bitcoin. The first government to do this is going to have a huge economic advantage for the rest of this century.

You know, it's REALLY difficult to do FRB with Bitcoin, since you are REALLY relying on having more people funneling in Bitcoins. And guess what happens when some-one wants to withdraw? Either you start funneling Bitcoins out of other's accounts, and they're left with the IOUs. And what happens when they want to withdraw, etc. It's possible, but difficult.

That's why wallets were made, so people can be their own bank. And not have to go through the bureaucracy that comes with banks. And they can't be left with IOUs, ever. Either a Bitcoin is there or it's not.

[twiifm]

Why not just adopt Bitcoin itself as a main currency? You could even set up a fractional banking system based on top Bitcoin. The first government to do this is going to have a huge economic advantage for the rest of this century.

You know, it's REALLY difficult to do FRB with Bitcoin, since you are REALLY relying on having more people funneling in Bitcoins. And guess what happens when some-one wants to withdraw? Either you start funneling Bitcoins out of other's accounts, and they're left with the IOUs. And what happens when they want to withdraw, etc. It's possible, but difficult.

That's why wallets were made, so people can be their own bank. And not have to go through the bureaucracy that comes with banks. And they can't be left with IOUs, ever. Either a Bitcoin is there or it's not.

If you can do FRB w gold you can do it w bitcoins.  The difference is if people have wallets then they dont need to keep their deposits in a bank.

But loans would still exist and credit money would still exist.   Banks dont really need deposit accounts these days to create loans.

For example if you lease a car,  the leasing bank creates credit without any deposit accounts

[polynesia]

Hi,

I've been asking for opinions about a proposal that's come up here in Scotland.  We're going to the polls in the next month to decide whether we want to split from England and become an independent country - basically the end of the United Kingdom that's lasted 400 years.

There's been plenty of discussion not only on whether we should, but whether we could (practically.)  One of the major stumbling blocks is the use of GBP - the Bank of England has said a post-independent Scotland can't use it.  Bit mean, but there you are.

So the question came up - If Scotland needs a new currency, why not set up a State-Run Cryptocurrency?

Here's my thoughts on the issue. 

http://cryptocurrencymadesimple.com/should-scotland-set-up-a-state-run-cryptocurrency/

Also, it appears that Ecuador got there first:

http://cryptocurrencymadesimple.com/ecuador-nationalise-cryptocurrency/

Would love to here what you guys think.

The Ecuador cryptocurrency will exist in parallel to the existing currency.
It would be interesting to see if any country will ever get to having only a cryptocurrency.

[twiifm]

Hi,

I've been asking for opinions about a proposal that's come up here in Scotland.  We're going to the polls in the next month to decide whether we want to split from England and become an independent country - basically the end of the United Kingdom that's lasted 400 years.

There's been plenty of discussion not only on whether we should, but whether we could (practically.)  One of the major stumbling blocks is the use of GBP - the Bank of England has said a post-independent Scotland can't use it.  Bit mean, but there you are.

So the question came up - If Scotland needs a new currency, why not set up a State-Run Cryptocurrency?

Here's my thoughts on the issue. 

http://cryptocurrencymadesimple.com/should-scotland-set-up-a-state-run-cryptocurrency/

Also, it appears that Ecuador got there first:

http://cryptocurrencymadesimple.com/ecuador-nationalise-cryptocurrency/

Would love to here what you guys think.

The Ecuador cryptocurrency will exist in parallel to the existing currency.
It would be interesting to see if any country will ever get to having only a cryptocurrency.

Its interesting that USD has been legal tender in Eucador since 2000.  They dollarized their economy because inflation was 96.1% in 2000!  Dropped to 22.4% in 2001.  That is unbelievable

This move is because they are straitjacketed by the USD.   I hope it works out for them

[williamj2543]

If it were state run, it would be centralized, therefore it would be fiat, therefore it would be no different than cash. We could have per country cryptos that are decentralized, and bitcoin could be the international, but that wouldn't work for many reasons.

[twiifm]

If it were state run, it would be centralized, therefore it would be fiat, therefore it would be no different than cash. We could have per country cryptos that are decentralized, and bitcoin could be the international, but that wouldn't work for many reasons.

Thats correct.   The big difference is they might reduce manufacturing costs of minting/ printing.   And the clearing might be cheaper.

If we are talking about Eucador then they would want to have monetary controls on their currency to control inflation/ recession.   Using BTC for them is like using USD,  except its unstable and they can't import w it.   

[williamj2543]

If it were state run, it would be centralized, therefore it would be fiat, therefore it would be no different than cash. We could have per country cryptos that are decentralized, and bitcoin could be the international, but that wouldn't work for many reasons.

Thats correct.   The big difference is they might reduce manufacturing costs of minting/ printing.   And the clearing might be cheaper.

If we are talking about Eucador then they would want to have monetary controls on their currency to control inflation/ recession.   Using BTC for them is like using USD,  except its unstable and they can't import w it.   

The only problem with this, is that only people with technology could use the currency, unless there were bills with private keys on them, which would be annoying to import and you could just take the money off the bill before giving it to the store.

[giantdragon]

Govt-issued cryptocurrency is just another form of fiat money!

[twiifm]

If it were state run, it would be centralized, therefore it would be fiat, therefore it would be no different than cash. We could have per country cryptos that are decentralized, and bitcoin could be the international, but that wouldn't work for many reasons.

Thats correct.   The big difference is they might reduce manufacturing costs of minting/ printing.   And the clearing might be cheaper.

If we are talking about Eucador then they would want to have monetary controls on their currency to control inflation/ recession.   Using BTC for them is like using USD,  except its unstable and they can't import w it.   

The only problem with this, is that only people with technology could use the currency, unless there were bills with private keys on them, which would be annoying to import and you could just take the money off the bill before giving it to the store.

Id imagine Ecuador is similar to most 3rd world countries in that there is more mobiles penetration than landlines.   They'll probably implement something like M Pesa

Also I dont they will phase out physical currency completely.   What they're trying to do is wean off the USD as legal tender