3 ms·

This is interesting, but I'd not focus on Bitcoin too much. This could be a test-bed for Goldman for something much bigger, because central banks are seriously

by zhte415 12y ago

This is interesting, but I'd not focus on Bitcoin too much. This could be a test-bed for Goldman for something much bigger, because central banks are seriously thinking about digital, potentially Bitcoin style, currencies. From the Circle announcement oska linked, emphasis mine: "As the financial services industry continues to become more digital and open, we see significant opportunities in companies and solutions that have the promise to transform global markets through technical innovation. We think that Circle’s product vision and exceptional management team present a compelling opportunity in the digital payments space.” What is the Connection to China? IDG Capital Partners likewise brings a strategic capability to Circle as we bring our products and services to China. We believe in a hybrid digital economy in which value moves freely around the world and converts into other currencies -- including both crypto and fiat currencies -- seamlessly, safely, and instantly." I'd like to link this to the Bank of England's recent report, the One Bank Research Agenda http://www.bankofengland.co.uk/research/Documents/onebank/discussion.pdf http://www.bankofengland.co.uk/research/Documents/onebank/di... [PDF, 50 pages] posed topics related to digital currencies, including the question "Why might central banks issue digital currencies?" [on page 31] Again, emphasis mine. "The emergence of private digital currencies (such as Bitcoin) has shown that it is possible to transfer value securely without a trusted third party. While existing private digital currencies have economic flaws which make them volatile, the distributed ledger technology that their payment systems rely on may have considerable promise. This raises the question of whether central banks should themselves make use of such technology to issue digital currencies. There are two parts to this question. The first is whether there is any rationale for a central bank to issue a digital currency supported by some form of distributed ledger payment system. The second addresses the economic, technological and regulatory challenges of doing so." Goldman are getting experience at the second question with this largely before anyone else, and waiting (for now) for the first question to answer itself.

drcross 12y ago
|This is interesting, but I'd not focus on Bitcoin too much. This could be a test-bed for Goldman for something much bigger, because central banks are seriously thinking about digital, potentially Bitcoin style, currencies. So bitcoin without the bitcoin? Have a think about what you said and what attributes bitcoin lacks that don't qualify it for widespread adoption. The narrative that's being pushed by the media is that bitcoin is almost perfect but unfortunately the big guys can't use it. The reason is that they can't print more of it, for free, on a whim.
- ggguntha 12y ago
  Exactly. The mechanism that makes bitcoin what it is - which is that mathematically it cannot be 'printed' without substantial effort and complications - is the only 'issue' to the old guard, the elite, the current power structure. The media is either diligently covering the given talking points or they know that bitcoin is a threat to the power structure and play up doubt about bitcoin to appease. Its only a matter of perspective between thinking this one 'weakness' is a fundamental flaw or a feature that offers the most significant contribution to human financial liberty in the last six thousand years. The cat is out of the bag and the privileged few will NOT be liking this cat!
- yc1010 12y ago
  Well banks used to use gold as an asset and then give loans on top of that, nothing stopping anyone making Bitcoin IOUs on top of bitcoin holdings. The problem is the same that was solved by banks hundreds of years ago, why would someone store gold with them instead of storing it at home, replace gold with bitcoin in previous sentence ;) Anyways this might explain Goldman Sachs involvement, when one puts bitcoin into Circle you do not control the keys (the "gold" is no longer yours) you get a Bitcoin IOU and you put your trust in Circle, down the road once Circle have millions of users they could offer a lending service and/or make it easier for people to get into stocks (and hence Goldman Sachs profit) and other investments
  - imaginenore 12y ago
    > why would someone store gold with them instead of storing it at home 1) Security 2) Insurance There's insured Bitcoin storage already: https://www.elliptic.co https://www.elliptic.co
  - jasonisalive 12y ago
    You can't send perfectly divisible quantities of gold halfway around the world in seconds. You also can't store gold in your brain and thus move unlimited quantities of gold across national borders undetected. Furthermore, unlike gold, Bitcoin storage and transaction signing needs can and will be satisfied by low-cost dedicated computing units, opening the freedom to store bitcoin to any who wish to use it, and the chance of possessive governments successfully trying to prevent people from doing so is about as likely as governments stamping out smartphone use.

by zhte415 12y ago

drcross 12y ago

|This is interesting, but I'd not focus on Bitcoin too much. This could be a test-bed for Goldman for something much bigger, because central banks are seriously thinking about digital, potentially Bitcoin style, currencies. So bitcoin without the bitcoin? Have a think about what you said and what attributes bitcoin lacks that don't qualify it for widespread adoption. The narrative that's being pushed by the media is that bitcoin is almost perfect but unfortunately the big guys can't use it. The reason is that they can't print more of it, for free, on a whim.

ggguntha 12y ago
Exactly. The mechanism that makes bitcoin what it is - which is that mathematically it cannot be 'printed' without substantial effort and complications - is the only 'issue' to the old guard, the elite, the current power structure. The media is either diligently covering the given talking points or they know that bitcoin is a threat to the power structure and play up doubt about bitcoin to appease. Its only a matter of perspective between thinking this one 'weakness' is a fundamental flaw or a feature that offers the most significant contribution to human financial liberty in the last six thousand years. The cat is out of the bag and the privileged few will NOT be liking this cat!
yc1010 12y ago
Well banks used to use gold as an asset and then give loans on top of that, nothing stopping anyone making Bitcoin IOUs on top of bitcoin holdings. The problem is the same that was solved by banks hundreds of years ago, why would someone store gold with them instead of storing it at home, replace gold with bitcoin in previous sentence ;) Anyways this might explain Goldman Sachs involvement, when one puts bitcoin into Circle you do not control the keys (the "gold" is no longer yours) you get a Bitcoin IOU and you put your trust in Circle, down the road once Circle have millions of users they could offer a lending service and/or make it easier for people to get into stocks (and hence Goldman Sachs profit) and other investments
- imaginenore 12y ago
  > why would someone store gold with them instead of storing it at home 1) Security 2) Insurance There's insured Bitcoin storage already: https://www.elliptic.co https://www.elliptic.co
- jasonisalive 12y ago
  You can't send perfectly divisible quantities of gold halfway around the world in seconds. You also can't store gold in your brain and thus move unlimited quantities of gold across national borders undetected. Furthermore, unlike gold, Bitcoin storage and transaction signing needs can and will be satisfied by low-cost dedicated computing units, opening the freedom to store bitcoin to any who wish to use it, and the chance of possessive governments successfully trying to prevent people from doing so is about as likely as governments stamping out smartphone use.