The Bank of England's Digital Currency proposal is part of the War on Cash
The
digital blockchain behind the digital Bitcoin this proposal: Bank of England Economist Proposes National Digital Currency is based upon,
prevents new Bitcions from being issued unless an increasingly difficult
set of mathematical queries based on previous transaction are answered quickly enough. Already, only
wealthy players with custom made computers can afford to become Bitcoin
"miners." Now who does that sound like? If you answered JP Morgan,
Goldman Sachs and the like, you're right, as this related article points
out: JPMorgan CEO Issues Cautious Remarks on Blockchain Tech (Hint: Jamie Dimon is not THAT cautious).
digital blockchain behind the digital Bitcoin this proposal: Bank of England Economist Proposes National Digital Currency is based upon,
prevents new Bitcions from being issued unless an increasingly difficult
set of mathematical queries based on previous transaction are answered quickly enough. Already, only
wealthy players with custom made computers can afford to become Bitcoin
"miners." Now who does that sound like? If you answered JP Morgan,
Goldman Sachs and the like, you're right, as this related article points
out: JPMorgan CEO Issues Cautious Remarks on Blockchain Tech (Hint: Jamie Dimon is not THAT cautious).
Bitcoin has had as much volatility in value as the stock market
and and
like stocks, it is primarily a speculative vehicle at this point, since
it can be directly spent in very few places (most of the stories you
here about it being accepted are really about it being converted to
dollars just prior to a purchase, either by the buyer or the seller, not
Bitcoin being used directly and unconverted). Sellers are not yet
willing to take a chance on Bitcoin's future value to transact business
in Bitcoins. And since there are such few spending outlets, large
holders of Bitcoin cannot readily convert their holdings without moving
the Bitcoin markets themselves.Now,
why would the Bank Of England be willing to gamble on such an unstable thing?
Maybe they think having the Central Bank somehow behind a digital
currency would stabilize it by making it legal tender, but more likely
it is part of the escalating war on cash implied in the article first
cited. Central banks can't go below Zero Interest Rate Policy (ZIRP) effectively as long as there
is a cash alternative that is effectively at ZIRP already - or less only
if that form of cash ceases to be printed, much like United States Notes have been, which now sell for 3 to 5 times face value on eBay
(it used to be just 2X a few years ago; U.S. Notes are a good
investment!).
