What if? A government controlled digital currency

[keelba]

Could it be possible that the "US government", aka The Fed (notice I put the word government in quotes to denote sarcasm), would create its own digital currency in many ways like Bitcoin with the exception that instead of decentralized miners controlling the block chain, it was controlled centrally by "the government". They could charge a fee for all transactions, aka a tax, and they would own and distribute all newly mined coins into existence. They would have a paper trail of every digital coin in existence and where it went. Would the people accept it? Of course they wouldn't have a choice, though, would they?

Does this give them any kind of advantage? Sort of a "if you can't beat them join them, and then beat them at their own game" kind of a strategy? Would this eliminate the need for local banks and give them ultimate control of the currency? Is there any possibility that they could try to implement something like this over the current system they have created?

There would always be a need for lenders so banks wouldn't go away. But banking, in the traditional sense of storing your money for you, would have to change. The biggest concern would be defaults of those loans but the central bank, with its ability to create more of the digital currency, would be there to save the day.

Then again, how different is this from the current model anyway?

Discuss....

[BitCoinNutJob]

Could it be possible that the "US government", aka The Fed (notice I put the word government in quotes to denote sarcasm), would create its own digital currency in many ways like Bitcoin with the exception that instead of decentralized miners controlling the block chain, it was controlled centrally by "the government". They could charge a fee for all transactions, aka a tax, and they would own and distribute all newly mined coins into existence. They would have a paper trail of every digital coin in existence and where it went. Would the people accept it? Of course they wouldn't have a choice, though, would they?

Does this give them any kind of advantage? Sort of a "if you can't beat them join them, and then beat them at their own game" kind of a strategy? Would this eliminate the need for local banks and give them ultimate control of the currency? Is there any possibility that they could try to implement something like this over the current system they have created?

There would always be a need for lenders so banks wouldn't go away. But banking, in the traditional sense of storing your money for you, would have to change. The biggest concern would be defaults of those loans but the central bank, with its ability to create more of the digital currency, would be there to save the day.

Then again, how different is this from the current model anyway?

Discuss....

Well it certainly will be less distributed so less secure.  But yeah i think they will move from paper/coin money to digital over next 10 years.

[Madness]

How they won't have a choice mate , people will simply won't use it and stick to Digital currencies Decentralized like now . we are using Bitcoin for that reason , It's annonymus ,  zero or low fees & it's not controlled by goverment ... If Bitcoin didn't have that , we would've sticked to Paypal and the other crap payment methods . at least I would

[HarmonLi]

Well, it would effectively be just like any other FIAT currency than can be traded via electronic means like computers or mobile phones. The biggest advantage of Bitcoin is that it's not controlled by a single authority. A lot of people don't get why this is so important or such a big thing!

[Ektra]

It's totally possible. The question as you have pointed out is, what would be the purpose, and who would support such an idea? A big part of the advantage of crypto is that users can hold their own wallets and mimic online banking activity faster, cheaper and better. Presumably fed-coin would let you use your own wallet, so yes, banks would still be hurting just as much as in the case of worldwide bitcoin adoption.

Would people use it? I think yes, if it happened before people got used to using bitcoin or similar. The fed-coin could instantly capture a userbase of millions by swapping all dollars for fed-coins in one big publicity drive.

Will they actually do it? It seems to me the advantages for the powers-that-be are limited to killing bitcoin and its alts, with a side benefit of tracking currency, presumably with wallet software legally required to take personal information. Of course, this helps them to keep or increase their power, but my intuition is that this isn't yet a strong or obvious enough motivator for them to get organised and take such drastic action. It will take much more adoption of cryptocurrencies before they start to get worried enough to seriously consider it!

[Kazimir]

Exactly what is the difference between Euro or Dollar and a 'government controlled digital currency' ?

[SOAD]

Could it be possible that the "US government", aka The Fed (notice I put the word government in quotes to denote sarcasm), would create its own digital currency in many ways like Bitcoin with the exception that instead of decentralized miners controlling the block chain, it was controlled centrally by "the government". They could charge a fee for all transactions, aka a tax, and they would own and distribute all newly mined coins into existence. They would have a paper trail of every digital coin in existence and where it went. Would the people accept it? Of course they wouldn't have a choice, though, would they?

Something like this will likely happen. Paper money is a bit low tech even these days so money will evolve eventually. That being said unless it is decentralized then it's still just another piece of shit they get to control and manipulate.

[herzmeister]

Then again, how different is this from the current model anyway?

exactly, that's the point. The competition of Bitcoin however indeed may put some fire under their asses to replace a lot of legacy COBOL mainframe crap and abolish some bureaucracies to enable pretty-instant near-for-free money transfers across the US and elsewhere.

[coinpr0n]

Yeah, possible. And they'll include "backdoors".

[keelba]

The reason I bring this up is because I am trying to guess what TPTB might do. One thing I think we can say we know for certain is that The Fed will not willfully give up its power. It is going to do what is best for it but the banksters are going to have to be just as devious about it as was when it was created.

The United States Federal Reserve System was created at a time when people had had enough of the local bank runs and losing their money to them. The system was, of course, self serving in a huge way but sold to the people and Congress as if it was in the peoples' best interests. They all bought it hook, line, and sinker. Hopefully, if you're on this forum, you're smart enough to see how that worked out.

So now we find ourselves, roughly 100 years later, in another time of great turmoil. The world has changed, technology has changed, but the people, if not already, are very close to being sick of the current financial system. There is a need for a new Creature from Jekyll island to come into existence. But what will it look like? Whatever it is, it will be sold to the people as "the fix" for the current system but you know in the end it will have to benefit themselves more than any people or government.

The sheeple of the world do not really care about understanding Bitcoin or what makes it different or better than any other digital currency. They do not understand the evils of inflation and of controlling the currency supply. They will buy whatever bullshit is sold to them through mass media as long as they think it is good for them. So it is very possible, at least to me, that The Fed may try to win this battle this way, rather than trying to abolish virtual currencies altogether.

[pawel7777]

Could it be possible that the "US government", aka The Fed (notice I put the word government in quotes to denote sarcasm), would create its own digital currency in many ways like Bitcoin with the exception that instead of decentralized miners controlling the block chain, it was controlled centrally by "the government". They could charge a fee for all transactions, aka a tax, and they would own and distribute all newly mined coins into existence. They would have a paper trail of every digital coin in existence and where it went. Would the people accept it? Of course they wouldn't have a choice, though, would they?

Does this give them any kind of advantage? Sort of a "if you can't beat them join them, and then beat them at their own game" kind of a strategy? Would this eliminate the need for local banks and give them ultimate control of the currency? Is there any possibility that they could try to implement something like this over the current system they have created?

There would always be a need for lenders so banks wouldn't go away. But banking, in the traditional sense of storing your money for you, would have to change. The biggest concern would be defaults of those loans but the central bank, with its ability to create more of the digital currency, would be there to save the day.

Then again, how different is this from the current model anyway?

Discuss....

The whole purpose of blockchain is to support decentralised consensus. You don't need a blockchain if your currency is centralised and controlled by you.

None of the governments would be happy if every tx was recorded on the public ledger.

I do think that in future (when current monetary system collapse) they'll be forced to create some more transparent model, with clear new money issuance rules, but they won't copy bitcoin.

[keelba]

The whole purpose of blockchain is to support decentralised consensus. You don't need a blockchain if your currency is centralised and controlled by you.

We're getting dangerously close to centralized mining already. Why not run with that concept and try to make it work to your advantage with the full power of the US government behind you?

[pawel7777]

The whole purpose of blockchain is to support decentralised consensus. You don't need a blockchain if your currency is centralised and controlled by you.

We're getting dangerously close to centralized mining already. Why not run with that concept and try to make it work to your advantage with the full power of the US government behind you?

The fact that there are few major pools doesn't mean we're centralised. Key difference is anyone is free to mine, or start own pool, or switch to other pool (if you're mining).

Why run with concept of centralised, government cryptocurrency if we already have USD, what would be the difference?

[RodeoX]

I think you will see a lot of these in the future.

Canada has one now.
http://en.wikipedia.org/wiki/MintChip

[keelba]

I think you will see a lot of these in the future.

Canada has one now.
http://en.wikipedia.org/wiki/MintChip

I was not aware of such a device and I think you're on to something.

[pawel7777]

I think you will see a lot of these in the future.

Canada has one now.
http://en.wikipedia.org/wiki/MintChip

Apparently that didn't succeed:

Canada Puts Halt to MintChip Plans; Could Sell Digital Currency Program
http://blogs.wsj.com/canadarealtime/2014/04/04/canada-puts-halt-to-mintchip-plans-could-sell-digital-currency-program/

But it seems to me it's not a 'Digital Currency' as Wikipedia describes it, but just another way of processing fiat payments.

[RodeoX]

I think you will see a lot of these in the future.

Canada has one now.
http://en.wikipedia.org/wiki/MintChip

Apparently that didn't succeed:

Canada Puts Halt to MintChip Plans; Could Sell Digital Currency Program
http://blogs.wsj.com/canadarealtime/2014/04/04/canada-puts-halt-to-mintchip-plans-could-sell-digital-currency-program/

But it seems to me it's not a 'Digital Currency' as Wikipedia describes it, but just another way of processing fiat payments.

You are correct!
The funny part is that when they were developing this they held "the mintchip challenge". They asked the question  "What would you use mintchip for?" The number one answer was "To buy bitcoin". lol. So they picked another choice as winner and closed the contest. It was the beginning of the end for mintchip.

[countryfree]

Government control means localized currency. Any country which has its own fiat currency could get its own electronic currency, and you would have to pay a commission for change each time you travel from a country to another. So, what's the point?

[slaveforanunnak1]

I'm worried about them passing a law (pick a country) which states :

"here is your private key! if you wanna make a new one, you have to register it! If you generate your own key willy nilly, then you are a financial terrorist!!!!!!11"
Merchants will have to check the public address against some gov managed DB to make sure it's "valid"

totalitarian wet dream!!

[RodeoX]

I'm worried about them passing a law (pick a country) which states :

"here is your private key! if you wanna make a new one, you have to register it! If you generate your own key willy nilly, then you are a financial terrorist!!!!!!11"
Merchants will have to check the public address against some gov managed DB to make sure it's "valid"

totalitarian wet dream!!

This is where we have leverage. I go on about how minimal regulation is good for BTC. But make no mistake, once I have paid my taxes the government is done. I will not obey the laws you are worried about. If the gov wants to push that hard then they will push me underground. Then they get nothing and there is nothing they can do about it.