Cryptocurrency

[VirtualMonkey]

think stellar is off again.

[Lance]

The next "big thing" in crypto's, apparently. Though I know less than nothing about them.

Looks interesting. I've bought a small amount to hold.

[deebeegee]

think stellar is off again.

Scooter a few moons ago, you were dolling out a few stellar to anyone who had a wallet. I'm sure you won't miss it but out of interest what would they have been worth now? You must be owed a few beers at least!

[IR35 Avoider]

You fail to understand the fundamentals.

A run on a bank is when everyone tries to get their money out as they fear the bank doesn't have enough to pay everyone.
With a cryptocurrency the amount of coins is the amount. There cannot be a 'run' on them as there are no more than there are. If everyone tried to sell that would be a price 'crash'.

I'm just repeating Bank of England views. You'd better write to them and tell them they don't understand.

(Unless I've misrepresented their view.)

Just googled, here's an article from yesterday saying more or less the same thing I originally read elsewhere:-

Bank of England could issue crypto-currency within a year | Daily Mail Online

In December, bank governor Mark Carney told politicians that using blockchain technology which underpins crypto-currencies could improve the way banks carry out transactions.

But he warned there could be financial stability risks if such an approach were rolled out across the whole economy.

Central banks already use electronic money but this is exchanged in a centralised fashion, across accounts at the central bank.

Cryptocurrencies allow parties to transact payments directly without a central intermediary, by means of technology that uses a shared ledger that verifies, records and settles transactions in a matter of minutes.

With no need for a central intermediary to facilitate and track transactions, consumers holding central bank-issued cryptocurrency could open accounts at any bank, including the central bank.

'You (could) create a situation where you can have an instantaneous (bank) run.

'So as soon as there were any concern, people can switch in their account at the Bank of England,' Carney said.

[Lance]

I'm just repeating Bank of England views. You'd better write to them and tell them they don't understand.

(Unless I've misrepresented their view.)

Just googled, here's an article from yesterday saying more or less the same thing I originally read elsewhere:-

Bank of England could issue crypto-currency within a year | Daily Mail Online

Fair point.

It seems the scenario suggested by Carney is that customers could move all their money from one bank to the BoE, if all GBP was using a blockchain. That's the run he describes.

It's interesting that he sees blockchain being used simply as a transaction ledger for the current banking system. And that the risk is simply down to the transaction speed causing the high street banks an issue.

It's oddly a very limited view of the potential uses of blockchain. And certainly a long way removed from the current usage by Bitcoin et al.

I'm not sure of the point of using blockchain to keep the money in the same banks. Kinda defeats the point of the technology.

I presume that as part of the banking institution he's not going to suggest anything more revolutionary.
Personally I'm not sure that it will happen in the way described as it would simply be replacing the current transaction methods that already work. SO would be an awful lot of money spent for no real gain (like HS2......... oh hang on..... )

I'll stop rambling now

[IR35 Avoider]

no. It's going to be like gold. Gold is never used as a means of payment but in so doing it does provide anonymity for those that must use it. After the 'great crypto bubble crash' of 2019 the price will stabilise and become a recognised value. There's only ever going to be around 19 million of them, the supply will always keep the value high for those that want to say I own a bitcoin.

It's said that the reason that legal tender (pounds, dollars, whatever) still has value after coming off the gold standard is because it can be (has to be) used to pay taxes. The need to pay taxes creates demand and props up its value/credibility. (Not entirely sure if I believe that.)

I've been assuming bitcoin had credibility because it was the (a) the first and largest cryptocurrency and (b) it would (one day) be useful as a currency. If it doesn't have usefulness as a currency to prop it up, why would a bitcoin have any value?

A "currency" (ignoring that it now isn't) can have value just because people believe in it, but why would people believe in bitcoin if there were better alternatives?

If the Bank of England (or Federal Reserve or Barclays or whoever) were to issue a crypto that could be exchanged for gold, or pounds/dollars/euros, or shares in the FTSE 100, why would anyone prefer bitcoin to those?

If everyone prefers one of those, surely bitcoin goes to zero?

Speaking as a consumer, I guess I would probably only ever use a crypto whose value was directly linked to the pound, guaranteed by the Bank of England. (Guess because I may not be understanding the future: I'm thinking crypto will have no direct effect other than being a replacement for Paypal. Though if there's a way to hold shares in a crypto so I don't have to trust that my broker really holds the shares they claim to hold for me when they print my pension statement, that might be an example of where it has a bigger role than I'm able to foresee at the moment.)

[Lance]

If everyone prefers one of those, surely bitcoin goes to zero?

As I alluded to in my previous ramble..... The blockchain use described by Carney for the BoE is nothing like Bitcoin.
It would still be a FIAT currency and the most unique part of Bitcoin is the lack of a central bank.

[scooterscot]

Scooter a few moons ago, you were dolling out a few stellar to anyone who had a wallet. I'm sure you won't miss it but out of interest what would they have been worth now? You must be owed a few beers at least!

It was this thread here:

https://forums.contractoruk.com/gene...xperiment.html

I see I sent 100 lumens to a few takers, which are now worth $52

[Jog On]

It was this thread here:

https://forums.contractoruk.com/gene...xperiment.html

I see I sent 100 lumens to a few takers, which are now worth $52

My Lumens are up 850% - I think they have quite a way more to go.

Stellar has given me a great lesson in just hodling.

[northernladuk]

My Lumens are up 850% - I think they have quite a way more to go.

Stellar has given me a great lesson in just hodling.

Can't beat a bit of hodling.