[2015-03-13] IBM and Federal Reserve want to create a Bitcoin Knock-Off

[bitbouillion]

Yes, there are currency exchanges around the world.  The exchange rates are set just like the exchange rates of cryptos, mostly by supply and demand (buyer and seller) but there is some influence by media, some by the trading systems (bots, mgmt), and some by regulators.

This is just the technical solution, but will the central banks, who create and control such a Coin in general allow speculation? Or will they just set the exchange rate to their national currencies (similar to the IMF's SDRs)?

Gold was never "abolished" and still remains the most widely accepted tradable currency in the world. 

When the currencies were in a gold standard, you could demand gold for your paper note. Nowadays for a paper note you get just another paper note from the central bank, no gold. The central banks abolished the backing of their monetary base with gold.

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[Armis]

Yes, there are currency exchanges around the world.  The exchange rates are set just like the exchange rates of cryptos, mostly by supply and demand (buyer and seller) but there is some influence by media, some by the trading systems (bots, mgmt), and some by regulators.

This is just the technical solution, but will the central banks, who create and control such a Coin in general allow speculation? Or will they just set the exchange rate to their national currencies (similar to the IMF's SDRs)?

Gold was never "abolished" and still remains the most widely accepted tradable currency in the world. 

When the currencies were in a gold standard, you could demand gold for your paper note. Nowadays for a paper note you get just another paper note from the central bank, no gold. The central banks abolished the backing of their monetary base with gold.

You ask who WILL do what, of course I don't know that, but since the SEC and FINRA are the police of the current fiancial systems on behalf of govt I see no reason why their powers won't be further extended to cover the additional areas.


As for the gold standard, yes we went off of the gold standard when it became evident that we could achieve more with faith and promise than glittering gold. 

[cbeast]

I suppose that is possible if they found a way to break the laws of known physics. You could conceivably create instantaneous blocks that propagate globally through some entanglement network. That would solve the Byzantine General's Problem without requiring Proof of Work. Or perhaps they invented a device that rewards miners with magic wishes rather than scarce tokens that can be traded. Either way, I'll await their White Paper with breathless anticipation.

Mort, would you explain that in American (English) please

Essentially, banks can't run a Bitcoin-like network because they have no incentive to work. They want only free money because they feel entitled. There are only two ways to get free stuff and that's by stealing it or magic. I believe that IBM doesn't have magic wands. If I may be so bold, it will be a craftily worded scheme that belies a pyramid scheme that rewards banks at the expense of the users. It will not solve the Byzantine General's Problem and it will not be trustless. It will not be peer to peer.

Also, because no cryptographer worth his salt would work for such a scheme, it will not be secure. Samsung should be running away from IBM as fast as possible.

[deisik]

Yes, there are currency exchanges around the world.  The exchange rates are set just like the exchange rates of cryptos, mostly by supply and demand (buyer and seller) but there is some influence by media, some by the trading systems (bots, mgmt), and some by regulators.

This is just the technical solution, but will the central banks, who create and control such a Coin in general allow speculation? Or will they just set the exchange rate to their national currencies (similar to the IMF's SDRs)?

Gold was never "abolished" and still remains the most widely accepted tradable currency in the world. 

When the currencies were in a gold standard, you could demand gold for your paper note. Nowadays for a paper note you get just another paper note from the central bank, no gold. The central banks abolished the backing of their monetary base with gold.

You can always buy gold in free market with your paper notes. Since you are not rushing to buy up gold with all your piles of paper notes, not that many people would want to actually exchange a paper note for a fixed amount of gold...

[Kakmakr]

I can already see it ^worried^

a. It will be a centralized.
b. They will be able to manipulate it
c. It will run on IBM data centres
d. It will NOT be annonymous.
e. The taxpayer will pay the bill.

This ladies and gentlemen is not good news for Cryto's like us. There is no positive side of this for us. ^Sad^
Some would say, not having to print fiat will be a saving, but running a centralized network and infrastructure will absorb all of that. 

[Armis]

I can already see it ^worried^

a. It will be a centralized.
b. They will be able to manipulate it
c. It will run on IBM data centres
d. It will NOT be annonymous.
e. The taxpayer will pay the bill.

This ladies and gentlemen is not good news for Cryto's like us. There is no positive side of this for us. ^Sad^
Some would say, not having to print fiat will be a saving, but running a centralized network and infrastructure will absorb all of that. 

The positive side for us is the fact that they are moving in our direction ...

There was a time, long, long ago when there was only savings accounts, then they came up with checking accounts , decades later money markets, and CDs (Certificated of Deposit)  ...  At the time when CD came about many in the stock market trade cried then, as you are doing now, lamenting that they are not really market driven instruments. 

Sure they were not, but they did serve the purpose of being a gateways instrument to stock market consideration.  Just like stock market options was a gateway item that lead people to commodities and futures markets.

Cryptocurrency have absolutely no safeguards so look on the bright side they may not have jumped on the CC bandwagon, but take comfort in the fact that they are still traveling in our direction and to the same destination -- successville.