One of the greatest benefits of Bitcoin is that there are no third-party interruptions. Governments, central banks or other financial institutions have no way to interupt transactions or freeze accounts. Bitcoin is purely peer-to-peer. Bob can make a payment to Alice without a middleman and once the transaction is settled on the blockchain the transaction is irreversable. Once you own it, you own it. No chargebacks.
Owning Bitcoin is different than 'owning' fiat money on a bank account. The money on your bank account is actually a loan to your bank. You don't own your money, the bank owns it. You own a claim on the bank, but if the bank goes bankrupt or decides to freeze your account you can't use the money you thought was yours. In a world of fiat money we have to fully trust the banks while in a world of cryptocurrencies we can put our trust in mathematical cryptography.
Besides Bitcoin and other cryptocurrencies, I am unaware of any other electronic cash system in which your account isn't owned by someone else. Paypal, for example, has the power to freeze the money you hold in your account if they have a suspicion your account has been misused. And remember what happened in Cyprus in 2013. The central bank of Cyprus wanted to recapitalize itself by taking back uninsured deposits larger than $100k.
This is all impossible with Bitcoin; a decentralized currency. No central authority has control, so no one can take it away from you.
Another benefit of Bitcoin is that anyone with an internet connection can use it. The software is open source and there are no restrictions to use it. No censorship. Compare this with opening a bank account.
Central bank backed cryptocurrencies
We don't know yet how central banks worldwide will deal with cryptocurrencies in the future. What we do know is that banks believe in the blockchain technology and are testing with private blockchains to facilitate bank transactions. Private blockchains can be very useful for testing purposes, but in my opinion a private blockchain is actually nothing more than an inefficient database. A private blockchain is not decentralized and doesn't have the benefits I described above. A private blockchain is absolutely not censorship resistant, because it has one or more central authorities that have control over the blockchain. It could be beneficial in some cases, but in case of making payments and holding savings I would rather trust in mathematical cryptography than a central bank (or even people in general).
This is what a "central bank cryptocurrency" looks like.
I think this picture is a good representation of a central bank backed cryptocurrency.
We invented a car (the blockchain), but let's get rid of the engine (decentralisation / the miners) so we can just keep using horses (fiat money).
The future is decentralized!
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The crypto world is still lacking of gateway for world use cases that is why bank are coming to help us to bring awareness to crypto. I am not sure if I am against for cryptocurrency bank but I believe on positive impact of it on crypto on the future.
That is without doubt, the funniest thing I have read on steemit - hell the entire internet - all day !
Thanks for making me smile...
😂😂
I think banks want crypto to work under them. which is not the right way crypto should be.
There are few if any sovereign fiat currencies which are not central bank backed "cryptocurrencies".
XRP is already such a thing.
And Tether is no better.
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Yes. @penguinpablo
There's a Jekyll Island 2.0 coming.
This is the reason Bitcoin is going to replace the complete financial system as we know it.
Money in the bank can be frozen without any notice on your part.
Yes, the change is coming. In fact, changes have been in motion since bitcoin was introduced, and the rapid increase in price last year was just an indication / continuation of those changes.
More changes – and more rapid changes and price increases – are on the horizon. Once the current financial system begins its inevitable implosion, the shift of societies and economies into acceptance of cryptos will happen with astonishing speed.
Unfortunately for many, there will be pain and misery.
Good read @penguinpablo :)
I agree that there should be no central bank cryptocurency. If there would be one, than the biggest benefits of crypto would go away. No more security, no mo freedom, and transactions participants will be no longer anonymous (I don't believe that a bank would allow that).
Allowing cryptotransactions in the banks is another subject though. I think it would be helpful and easier to convert crypto into fiat :)
Lets start with discussing the picture! I have never seen it and I really had to laugh!
These days,with all the blockchain technology taking hugh steps, ars very interesting! It is going to disrupt a lot of business models, economies and so on!
Lots of middle men will just see their reason for existance vaporize but they will not go down without a fight! They are much smarter than the old video stores, who didn’t see the change comming!
Banks will still be here for the next decades, they will just reinvent their business model! How that’s the big question! They will probably will turn into decentralized banks keeping in store the cryptos for their customers. Loaning out money, fiat or crypto, to give people the chance to invest in their lives. I just cannot imagine that all the people in the world will keep their own cryptos in own wallets!
The will probably by doing this, increase the speed of mass adoption! Because if we like it or not, most people still trust the banks and they will profit from this!
Centralization will never permit us to fully have the security of having monetary sovereignty (as Trace Mayer calls it). This is why Bitcoin will reign superior as blockchain technology continues to develop and expand globally. However, the thought of Central Banks considering private blockchains is promising as there are many projects focused on interoperability which would permit different blockchain to talk to each for transactional processing. This could lead to a good middle ground of the traditional financial system and the future decentralized one.
good information..you share a great news for us..
thank you...@penguinpablo
@upvote done
all will be cryptocurrency later
You are absolutely right, the idea is to get out of all state regulation.
But that a state intends to assume control of the cryptocurrency is a clear sign of the success of this initiative.
Governments with their anachronistic, obese and slow institutions are the past. the cryptocurrencies open the door of the future at the speed of light.
There is an example of this maneuver, the government of Venezuela presented a cryptocurrency called PETRO.
The petro will be totally controlled by a state under the excuse that it is backed by natural resources.
This is intended to mix current monetary policy models with cryptocurrencies.
Let's be aware of this.
Great article and very informative, thanks for sharing. I've smashed the upvote button for you!
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wow great post i always follow you for more good blog thanks @penguinpablo
Great information ,indeed i gain something from this post
great post thanks for sharing i will follow you.
Couldn't have said it better myself. As stated in the very first sentence abstract of bitcoin whitepaper, It aims to performing payments from one party to another without going through a financial institution.However, I still fail to see at its truest potential, in which there is no middleman. It appears that in order to adjust with the regulations, there is still middleman in the process. I would say it is still at earliest stage of mass development and will be looking forward to see what's going to happen in the next couple of years.
wow great post thanks for sharing
Nice post friend, good luck always
Great post friend
I don't know what happened in cyprus back in 2013 i might check it out to kNow more about it
a central bank is always bad
People want crypto currency on their own tags ,which will be in their control for sure.
The creature of jekyl island the richest men held a meeting to draft the plans of the central bank in America which passes over christmas when no one was paying attention. 1913
Good post...
hahaha 'central bank cryptocurrency' so funny!
This here is horrible, the truth is that this coin has not served at all in the country
Sorry @penguinpablo for using this very interesting post to ask you a thing about your fine app www.steemnow.com. Would it be a great trouble to insert SBD line into this graph?
All the best with your projects at Steemit.
The history of the price of the SBD token is not stored on the Steem blockchain so creating such a chart won't be easy.
OK, thanks and keep up a good work.
I really don't understand the central banks pushing for their own cryptocurrency, they are missing the point entirely. People want to move away from the period.
We couldn't have said it better ourselves! Private blockchains and centralised exchanges are not living up to what the underlying technologies were created for. Instead of fully embracing blockchain technology and all it has to offer, this is simply making the technology the equivalent of what currently exists, or worse. If you are more interested in this topic, we think you will enjoy, “Should government issue their own cryptocurrency?”.
follow me back please :) :)
Stop this