14 ms·

Senegal to Introduce a New Blockchain Based National Digital Currency

146 points by tefo-mohapi 10y ago

mathiasrw 10y ago
It will be interesting to see who may + how they will procuce new "coins". Blockchain is only better if it can deprive privat parties to deflate the value by "printing" more... Also interesting how much anonymity users will have.
Kinnard 10y ago
I spent a semester abroad in Senegal during the financial crisis of 2008. I wonder what the details are. The CFA is pegged to the Euro, so this could mark Senegalese monetary independence. A different sort of liberation than most in the blockchain space are going for, but a liberation nonetheless.
laurent123456 10y ago
I wonder who is mining the blocks? Since this is launched by the government, are they the one doing all the mining? In that case, isn't the currency vulnerable to the 51% attack (i.e. the government could essentially "print" digital money as they wish)?
- Kinnard 10y ago
  Well, it wouldn't be "vulnerable" to a 51% attack, this would just be controlled by a mint which was the model for cryptocurrencies until Satoshi figured out mining: http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1389&context=aulr http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?a... https://static.aminer.org/pdf/PDF/000/120/358/universal_electronic_cash.pdf https://static.aminer.org/pdf/PDF/000/120/358/universal_elec...
Avshalom 10y ago
Alternate head line: "Senegal to introduce national database of all financial transactions"
pierre_d528 10y ago
Senegal eCurrency = digital currency + centralisation? Can someone explain the advantages of that currency for the people and not the banks nor the state? I thought all the magic relied on decentralisation and removal of intermediaries. Isn't it a progress, but backward?
- dogma1138 10y ago
  Decentralized currency isn't something anyone is taking seriously in the financial sector as its antithetical to their needs. When banks talk about block chains they are talking about private ledgers that will handle concurrent banking, account consolidation and clearinghouse functionalities not about bitcoin. A bank has to be able to control the currency and honestly it's not like bitcoin is decentralized its in the hands of large miners instead of banks but effectively it can be just as beurocratic.
- gesman 10y ago
  This has nothing to do with decentralization or giving people any advantages. This is to reduce expenses and dependency on cash or other currencies such as US dollars. And of course to have central "push button" control over monetary instruments.
  - deleted 10y ago
    [deleted]
- deleted 10y ago
  [deleted]
wyager 10y ago
As a huge proponent of Bitcoin and other decentralized currencies, I really don't understand this. The entire point of going through the rigamarole of using a blockchain is to attain a large degree of byzantine fault tolerance in an adversarial, trustless, and most importantly unprivileged environment. That is, there are no "master nodes" or any sort of centralized hacks like that. If you're Senegal, presumably you want control over your national currency, so you're going to need some sort of centralized authority anyway. Since you've already done away with decentralization, why waste the time and effort on using a blockchain? There are any number of simpler architectures you can use when you have a central authority.
- pierre_d528 10y ago
  Did you get downvoted as I did? Are you guys seriously proponents of centralisation and useless intermediaries?
  - RobertoG 10y ago
    I'm a proponent of centralization in money. Not so much of useless intermediaries. But I up-voted the grandparent because his question makes total sense. What is the point of this except, as another commentator say, to keep a registry of all the transactions? When the Internet started we all though that it was the start of the age of freedom through anonymity, but instead is the age of "I'm only a click away of knowing everything about you". It seems that blockchain technologies are going to follow the same pattern.
- CyberDildonics 10y ago
  I don't think that is the WHOLE point. An anonymous currency based on private keys, even if centralized, allows you to use electronic money without banks, which means without permission.
  - notahacker 10y ago
    But if they're having the centralised authority anyway, can't they just allow anonymous accounts to transact through a more traditional secure electronic payments system provided by that central clearing house, without the resource consumption overheads and limits on concurrent transactions associated with blockchains? I can't see true anonymity being a goal of a system introduced by governments either, though I can see why they wouldn't want an electronic payments system to rely on financial intermediaries in an economy where many people don't use banks.
Null-Set 10y ago
A better article with more detail. http://www.businesswire.com/news/home/20161103006949/en/eCurrency-Mint-Limited-Banque-Régionale-De-Marchés http://www.businesswire.com/news/home/20161103006949/en/eCur...
- davidgerard 10y ago
  That's literally the press release. Has there been any coverage in proper news outlets? Surely this would be huge financial news.
loxadim 10y ago
COOL
nickik 10y ago
Im a fan of crypto currencys, but they are simply not ready for primetime. In order to have a monatary system thay correcly works for a complex economy with many stages of production you need a way to grow and shrink the money supply. Some people like to compair Bitcoin to gold and then the make the argument that gold worked well for a long time. That argument however is flawed because gold usually was used ontop of a banking and coinage/note system. Take for example the old Scottish banking system during (17/18th century), they on avg had reserve ratio of 2%. That essentially means that the circolating money (feduciary media) is much higher then the gold stock. It also means the the broad response to changes in money demand (velocity). As long as crypto currencies can not figure this out, the will not be able to run a full modern economy. One way to do it, would be to use Bitcoin as a gold replacement, and then have 'banks' create Shaum-style E-Cash to people. Then these 'banks' could increase or decrease the supply based on the money demand. That is however far from optimal. The tricky thing boils down the system being able to buy and sell assts in order to create or destroy money.
- popol12 10y ago
  Can you explain why it is needed to grow and shrink the money supply ? I don't get that. In my view, the only problem with gold was that it was not practical to use. That's where bitcoin is better, you can divide a single unit into much much smaller unit (up to 10^-8 Bitcoin for instance) so everybody can use it.
  - erebus_rex 10y ago
    Most central banks in the world do a lot of open market operations to keep the economy in check. It is how they affect inflation, interest and exchange rates. Most cryptos are still commodity currency; the commodity is computation. Because we don't decide how many coins get "minted" our ability to affect the money supply is reduced. So we're castrating one of our major interventional instruments. Practicality isn't the issue. During the Gold standard, the bars were kept in vaults and we traded in convertible paper notes. The mint could always print notes of smaller or larger denominations if needed, but couldn't print more than it had bars to convert to. And that is the problem.
upofadown 10y ago
>The other interesting point to observe is how both Tunisia and Senegal's digital currencies use the blockchain as part of their technology but don't use BitCoin as a currency. That's a silly thing to say. Tunisia and Senegal already have Bitcoin. If they didn't declare some sort of national currency they would in effect be withdrawing from any sort of control over money in the countries entirely.
runeks 10y ago
I can't help facepalm when I read news like this. The value proposition of blockchain technology, combined with proof-of-work, is distributed trustlessnes. Why would a national, centralized issuer need anything of this sort? All they need is a PostgreSQL database or, preferably, letting their citizens use whichever medium of exchange they prefer, rather than try to pretend that there isn't plenty of foreign currency that their people would probably prefer using.
chubs 10y ago
Does anyone know if "it still relies on the central banking system" means it can be inflated away to worthlessness by a poorly run government?
known 10y ago
Decentralized + Private + Cloud + Immutable on top of AUDIT TRAIL
davidgerard 10y ago
I'm seeing no news coverage of this that doesn't reprint this article or the original press release. Surely this would be big news in proper media, particularly given the buzzword status of "blockchain". What are they actually doing?
draw_down 10y ago
Good luck!

146 points by tefo-mohapi 10y ago

It will be interesting to see who may + how they will procuce new "coins". Blockchain is only better if it can deprive privat parties to deflate the value by "printing" more... Also interesting how much anonymity users will have.

Kinnard 10y ago

I spent a semester abroad in Senegal during the financial crisis of 2008. I wonder what the details are. The CFA is pegged to the Euro, so this could mark Senegalese monetary independence. A different sort of liberation than most in the blockchain space are going for, but a liberation nonetheless.

laurent123456 10y ago

I wonder who is mining the blocks? Since this is launched by the government, are they the one doing all the mining? In that case, isn't the currency vulnerable to the 51% attack (i.e. the government could essentially "print" digital money as they wish)?

Kinnard 10y ago
Well, it wouldn't be "vulnerable" to a 51% attack, this would just be controlled by a mint which was the model for cryptocurrencies until Satoshi figured out mining: http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1389&context=aulr http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?a... https://static.aminer.org/pdf/PDF/000/120/358/universal_electronic_cash.pdf https://static.aminer.org/pdf/PDF/000/120/358/universal_elec...

Avshalom 10y ago

Alternate head line: "Senegal to introduce national database of all financial transactions"

pierre_d528 10y ago

Senegal eCurrency = digital currency + centralisation? Can someone explain the advantages of that currency for the people and not the banks nor the state? I thought all the magic relied on decentralisation and removal of intermediaries. Isn't it a progress, but backward?

dogma1138 10y ago
Decentralized currency isn't something anyone is taking seriously in the financial sector as its antithetical to their needs. When banks talk about block chains they are talking about private ledgers that will handle concurrent banking, account consolidation and clearinghouse functionalities not about bitcoin. A bank has to be able to control the currency and honestly it's not like bitcoin is decentralized its in the hands of large miners instead of banks but effectively it can be just as beurocratic.
gesman 10y ago
This has nothing to do with decentralization or giving people any advantages. This is to reduce expenses and dependency on cash or other currencies such as US dollars. And of course to have central "push button" control over monetary instruments.
- deleted 10y ago
  [deleted]
deleted 10y ago
[deleted]

wyager 10y ago

As a huge proponent of Bitcoin and other decentralized currencies, I really don't understand this. The entire point of going through the rigamarole of using a blockchain is to attain a large degree of byzantine fault tolerance in an adversarial, trustless, and most importantly unprivileged environment. That is, there are no "master nodes" or any sort of centralized hacks like that. If you're Senegal, presumably you want control over your national currency, so you're going to need some sort of centralized authority anyway. Since you've already done away with decentralization, why waste the time and effort on using a blockchain? There are any number of simpler architectures you can use when you have a central authority.

pierre_d528 10y ago
Did you get downvoted as I did? Are you guys seriously proponents of centralisation and useless intermediaries?
- RobertoG 10y ago
  I'm a proponent of centralization in money. Not so much of useless intermediaries. But I up-voted the grandparent because his question makes total sense. What is the point of this except, as another commentator say, to keep a registry of all the transactions? When the Internet started we all though that it was the start of the age of freedom through anonymity, but instead is the age of "I'm only a click away of knowing everything about you". It seems that blockchain technologies are going to follow the same pattern.
CyberDildonics 10y ago
I don't think that is the WHOLE point. An anonymous currency based on private keys, even if centralized, allows you to use electronic money without banks, which means without permission.
- notahacker 10y ago
  But if they're having the centralised authority anyway, can't they just allow anonymous accounts to transact through a more traditional secure electronic payments system provided by that central clearing house, without the resource consumption overheads and limits on concurrent transactions associated with blockchains? I can't see true anonymity being a goal of a system introduced by governments either, though I can see why they wouldn't want an electronic payments system to rely on financial intermediaries in an economy where many people don't use banks.

Null-Set 10y ago

A better article with more detail. http://www.businesswire.com/news/home/20161103006949/en/eCurrency-Mint-Limited-Banque-Régionale-De-Marchés http://www.businesswire.com/news/home/20161103006949/en/eCur...

davidgerard 10y ago
That's literally the press release. Has there been any coverage in proper news outlets? Surely this would be huge financial news.

loxadim 10y ago

COOL

nickik 10y ago

Im a fan of crypto currencys, but they are simply not ready for primetime. In order to have a monatary system thay correcly works for a complex economy with many stages of production you need a way to grow and shrink the money supply. Some people like to compair Bitcoin to gold and then the make the argument that gold worked well for a long time. That argument however is flawed because gold usually was used ontop of a banking and coinage/note system. Take for example the old Scottish banking system during (17/18th century), they on avg had reserve ratio of 2%. That essentially means that the circolating money (feduciary media) is much higher then the gold stock. It also means the the broad response to changes in money demand (velocity). As long as crypto currencies can not figure this out, the will not be able to run a full modern economy. One way to do it, would be to use Bitcoin as a gold replacement, and then have 'banks' create Shaum-style E-Cash to people. Then these 'banks' could increase or decrease the supply based on the money demand. That is however far from optimal. The tricky thing boils down the system being able to buy and sell assts in order to create or destroy money.

popol12 10y ago
Can you explain why it is needed to grow and shrink the money supply ? I don't get that. In my view, the only problem with gold was that it was not practical to use. That's where bitcoin is better, you can divide a single unit into much much smaller unit (up to 10^-8 Bitcoin for instance) so everybody can use it.
- erebus_rex 10y ago
  Most central banks in the world do a lot of open market operations to keep the economy in check. It is how they affect inflation, interest and exchange rates. Most cryptos are still commodity currency; the commodity is computation. Because we don't decide how many coins get "minted" our ability to affect the money supply is reduced. So we're castrating one of our major interventional instruments. Practicality isn't the issue. During the Gold standard, the bars were kept in vaults and we traded in convertible paper notes. The mint could always print notes of smaller or larger denominations if needed, but couldn't print more than it had bars to convert to. And that is the problem.

upofadown 10y ago

>The other interesting point to observe is how both Tunisia and Senegal's digital currencies use the blockchain as part of their technology but don't use BitCoin as a currency. That's a silly thing to say. Tunisia and Senegal already have Bitcoin. If they didn't declare some sort of national currency they would in effect be withdrawing from any sort of control over money in the countries entirely.

runeks 10y ago

I can't help facepalm when I read news like this. The value proposition of blockchain technology, combined with proof-of-work, is distributed trustlessnes. Why would a national, centralized issuer need anything of this sort? All they need is a PostgreSQL database or, preferably, letting their citizens use whichever medium of exchange they prefer, rather than try to pretend that there isn't plenty of foreign currency that their people would probably prefer using.

chubs 10y ago

Does anyone know if "it still relies on the central banking system" means it can be inflated away to worthlessness by a poorly run government?

known 10y ago

Decentralized + Private + Cloud + Immutable on top of AUDIT TRAIL

davidgerard 10y ago

I'm seeing no news coverage of this that doesn't reprint this article or the original press release. Surely this would be big news in proper media, particularly given the buzzword status of "blockchain". What are they actually doing?

draw_down 10y ago

Good luck!