China’s official digital currency is nearly ready

As much as China frowns on cryptocurrency, it’s happy to introduce its own form of virtual cash. The People’s Bank of China has revealed that its digital …

It’ll rely on a two-tier split, with the People’s Bank on top and commercial banks below, ostensibly to help deal with the sheer size of China’s economy and population. Also, it won’t rely entirely on the blockchain that forms the backbone of cryptocurrencies. It just couldn’t deliver the throughput needed for retail, Changchun said.

There’s no mention of just when the currency would be ready.

China does have a motivation to roll out the monetary format sooner than later. The nation has reportedly argued that cryptocurrency creates disorder, with speculators selling off regular currency and buying up the virtual kind. This new approach might create stability. It’s also no shock that the Chinese government would want a digital currency system it could control. Officials have spent years trying to increase China’s independence from foreign tech, and this would be the next logical step.

Related Posts:

  • No Related Posts

Some boring facts about Bitcoin, and why you should remember them

Yes, Satoshi Nakamoto is the name of the enigmatic creator of Bitcoin, the person who started the world that we live in today. The honour of being the …

It has been around ten years since the first time that Bitcoin came into existence. With this amount of time passing, we should do a quick review of some of the more boring facts about Bitcoin, which all determine, in one way or another, what Bitcoin is to us today. These facts need the occasional review, simply because they are important to the history of the currency. Although, the importance of these facts lies not just with the curiosity of their validity, but also to what they can tell us about our own attitude towards the currency today. They tell us where the currency came from and what it means to toe society in general. They are a way to contextualize Bitcoin and cryptocurrencies in general for us so that we can be self-aware of how we use them in our day to day lives and why we use them in those specific ways. In a way, they are a mirror to the cryptocurrency enthusiast of today, just one more opportunity to stop and consider where we stand after ten years with Bitcoin and now with other ryptos.

Value of Bitcoin at its launch

The first thing that I want to discuss is the value of the very first Bitcoin. The history of the currency starts very humbly, being worth so much less than it is today, that it is even funny to consider how it could have gotten from there to here. It is also not surprising that so many people hesitated, at the time, to in any way invest in cryptocurrencies or anything that was related to them. At the very beginning of its history, Bitcoin sat at the modest price of $0.003. Compared to today, that is nothing. The change that the value of Bitcoin has seen since is astronomical, with the decimal point moving 9 times to get to where it is now. It makes sense now why the first purchase ever made with Bitcoin was of Pizza, using about 5000 Bitcoins at the time. That is also when the real history of Bitcoin got started, May 22nd, the date that started the crazy journey that brought us to where we are now.

The growth of the value of Bitcoin has not been an accident, or the result of speculation. It is simply a sign of the times changing. The people are losing the trust they had in traditional payment systems, currencies and financial assets fast, and are demanding an alternative to the well established. Cryptocurrencies are offering users a chance to invest in an asset that can be an alternative in a world where everything is either controlled, tracked or even at the risk of failing. The modern global economy is not inspiring a lot of trust among the general population, and the demand for alternative ways of exchanging money is becoming high. Bitcoin is just one of the many, and the most popular, ways to keep yourself not bankrupt in a situation where the world is no longer able to guarantee your future to you.

The value of 1 Satoshi

If you know what Bitcoin is and have ever tried to pay for anything with it, you are aware of Satoshi. Yes, Satoshi Nakamoto is the name of the enigmatic creator of Bitcoin, the person who started the world that we live in today. The honour of being the person who created the currency has been further emphasized by the fact that one-millionth of a Bitcoin is now called a Satoshi. Satoshi has a relationship to Bitcoin similar to that of what cents have to the Dollar. Except, instead of being 1/100th of a Bitcoin, it is 1/1000000, making it a much smaller fraction. The initial reason for this is pretty simple – after reaching a certain value, it became hard to keep referring to fractions of Bitcoin as such, and the quantitative of Satoshi was introduced. But, anticipating that the value of a Bitcoin is going to keep growing, people decided to create a unit of Bitcoin that would hedge against that in the future.

So why is it important that one Satoshi is a millionth of a Bitcoin? Because it tells us of what the world and the cryptocurrency community is expecting the currency to achieve in the future. Many people are expecting that someday, Bitcoin will be valuable enough that one Satoshi will be a viable sum of money for everyday use. It tells us that the community is extremely optimistic about the value of Bitcoin and it also tells us that it has set itself a goal that is beyond the simple valuation and use of Bitcoin that we have today. The goal is to have the value be higher, yes, but it is also to keep the value steady so that it can be used for everyday applications without any kind of issue or fear.

Bitcoin Network computing power

When you take the top 500 supercomputers in the world, combine their computing powers and compare them to that of the computing power of the network that is currently mining Bitcoin, you will discover that the Bitcoin network is 7468 times more powerful, and getting more powerful every day. This information might be a little scary, after all, dedicating this much of our computing power to Bitcoin might not necessarily be the most responsible thing to do. But it is also information that can tell you a lot about what it means to be a Bitcoin society and a Bitcoin miner. Specifically, it is extremely hard to contribute to the community significantly. The amount of computational power that it takes to mine a single block, nowadays, is extremely high and extremely expensive to achieve. So, many miners working in the industry today, face issues such as not being able to make ends meet or have to quit, simply because they cannot afford to participate in the activity anymore.

But, on the other hand, it also shows how far the Bitcoin mining community has come. Once upon a time, the community was small, and the number of coins mined day today was pretty small as well. As the numbers of miners increased and the numbers of people participating in the industry increased, we have achieved a level of dedication that has not been seen before. Now, the Bitcoin community is one of the largest in the world, and that is something to be proud of and to be considerate of.

Limit on the number of Bitcoins

There are those who think the Bitcoin is an unlimited resource, but the fact of the matter is, they are not. The number of Bitcoins in circulation at one time is limited to 21 million at the same time. The reasons for this are many, some of them relating to the stress on the Blockchain Network in terms of the computational power needed in order to conduct transactions with more Bitcoins than that, and the others being related to the fact that the value of cryptocurrencies needs to be kept at a certain level of stability, and this is one of the many ways to do so. The fact that there are only 21 million Bitcoins allowed for circulation has many effects on the international cryptocurrency economy, some of them positive, others rather annoying. But one thing is for certain, there have been attempts to breach this limitation.

Specifically, in the starting days of cryptocurrency, a hack took place that allowed for a transaction of trillions worth of Bitcoins in a single transaction. While the Bug was quickly mitigated and fixed, so that it could never be exploited again, the system stress at the time was immense. The Blockchain network and the miners suffered quite a lot through that transaction, and the value of Bitcoin saw quite a bit of a drop because of that single occurrence. But, thankfully, the value of Bitcoin was already pretty low at the time, so the currency got a chance to rebound.

Ghost Bitcoins

This is something that is often forgotten, which is a little more than appropriate when speaking of Ghost Bitcoins. You see, a significant number of Bitcoins that have been mined and given to users are now inaccessible, either because the keys to the wallets they are store in have been lost, or the wallets themselves have been lost. When I say significant, I mean that 64% of all Bitcoins that have ever existed have been lost and become Ghost bitcoins, not being able to contribute to the crypto industry economy in any other way than just existing as a nonexistent resource. These are the coins that are keeping the value of Bitcoin pretty high, by making the resource as scarce as it is, it provides certain stability. The knowledge that a significant part of cryptos will always be inaccessible leaves Bitcoin being pretty stable in its value.

But it acts as an important lesson as well – many people forget to do the very basic thing when dealing with Bitcoin – keep track of it. Without the keys to wallets, you have no access to the Bitcoins, meaning that the Bitcoin is no longer yours. So, making sure that you don’t accidentally make ghost Bitcoins is important, more so than even buying them in the first place. Creating new Ghost Bitcoins is equivalent to creating additional issues for the industry. After all, Bitcoin is a finite resource, and getting rid of a significant part of it is only going to cause issues at some point in the future.

Related Posts:

  • No Related Posts

New World Through PRIZM of “Kremlin” Political Technologists

In some countries, digital money is already seen as a real and more stable alternative to national currencies. It is believed that these projects are …

The growing tension on the geopolitical map of the world directly affects the economy. The exacerbation of trade wars has led to growing discontent with the hegemony of us dollar, which is increasingly becoming an instrument of blackmail and political bargaining. The most effective strategy for countering the fed and its satellites at the moment is seen in the gradual abandonment of us dollar in mutual agreement between countries and in the increasingly widespread use of digital money, which is free from centralized control, but not all, only cryptocurrencies rid of the inherent “sores” of the first generation. In this sense, experts have high hopes for a new generation cryptocurrency “PRIZM”. In some countries, digital money is already seen as a real and more stable alternative to national currencies. It is believed that these projects are developing with the tacit approval and support of the Kremlin.

In order to clearly see what success can be achieved in the sphere of the digital economy with the correct formulation of the question in the shortest possible time, it is enough to look at the example of Belarus, where after President Alexander Lukashenko legalized digital money with his decree in 2017, there was a real cryptocurrency boom. Moreover, it is not so much about ICO, but about large infrastructure projects that are vital for the normal independent existence of the digital economy. So, since 2017, two large cryptocurrency exchanges have opened in Belarus. In addition to the ambitious project of Said Gutseriev, investments in which according to the most conservative estimates amounted to 10 million dollars, the second large cryptoexchange “iExchange” began to work in the Republic, investments in which already amounted to about 3 million dollars, and the team has more than 100 specialists from Ukraine, Russia, Belarus, Canada and China. According to some experts, the emergence and development of “iExchange” is associated with the interest of structures close to “Sberbank” in the stable conduct of international transactions bypassing existing economic sanctions, including with countries and contractors which are added by the financial regulators to the blacklist of FATF.

Simultaneously with the development of a parallel system of foreign economic mutual settlements, digital money is coming closer to getting the status of national currencies in those States where the state of local economies does not allow providing the traditional national currencies with the proper level of stability. The transition to decentralized currencies of the new generation will allow these countries, on the one hand, to get rid of the dominance of us dollar in their own economies, on the other – once and for all to solve the problem of galloping inflation.

Change the world together!

Ideas of getting rid of dollar slavery are rapidly gaining popularity around the world. There is an opinion that this is happening, in particular, thanks to the activity of political strategists ideologically close to the Kremlin. They and their organizations see their mission in the fight against the global financial system controlled by the us government, saving humanity from dollar slavery and popularizing cryptocurrencies as a real alternative to Fiat money.

The main points of application of efforts are intensively developing countries from the economic point of view: India, South Africa, Indonesia, East Timor, as well as Ukraine.

Ideas of the need to get rid of dollar slavery spread particularly intensively in India

And it should be said that this activity has not gone unnoticed by the us financial authorities. Thus, as part of the next replenishment of the list of people and organizations whose activities are subject to economic sanctions, the us Treasury Department along with the Deputy Minister of economic development of Russia Sergey Nazarov called the Chairman of the Board of the international public movement “Change the World Together” (CWT) Alexey Muratov. According to him, this step on the part of the financial regulator is actually a recognition of merit, confirmation of the correctness of the chosen CWT rate.

Active work of Alexey Muratov was appreciated by the Ministry of Finance of the USA

Re-development of Africa

Another close to the Kremlin political strategist, Andrei Kramar in 2018 contributed to the development of a multi-profile partnership between Russia and Madagascar. At one time, the USSR had a great political and economic weight in this island state, which, however, with the collapse of the Soviet Union was lost. Having lost the economic support of the “Big brother”, the socialist government of the island could not keep the situation in the country under control, which de facto became bankrupt. Since then and until now, Madagascar has been one of the poorest countries in Africa, with huge reserves of valuable natural resources. Russian companies such as Gazprom, ALROSA, Rosneft and Rosgeologia have shown a substantial interest in the subsoil of the island. Russian Railways is interested in implementing major infrastructure projects with the government of Madagascar.

Projects in the digital economy can take a special place in the structure of economic relations. Legalization and active use of cryptocurrencies for international settlements will help to cope with high inflation rates and optimize budget expenditures (at least in terms of reducing interventions on the currency market).

A good ground for the development of mutually beneficial economic relations is the good memory of the decades of cooperation between the island state and the USSR, in which thousands of Malagasy people received higher education in the universities of the Union, many of whom currently hold responsible positions in the structures of public administration and manage large commercial organizations.

The activation of contacts between Russia and Madagascar was facilitated by the fact that the Minister of foreign Affairs of the island state in 2018 – 2019 was Elua Maxim Davo, who for 15 years was the Ambassador of Madagascar to the Russian Federation

Military-technical cooperation between Russia and Madagascar is also promising. A large share in the air force of the country and its land army is the equipment produced at Soviet enterprises. These helicopters, tanks and planes are still on combat duty, but they already need deep modernization, which the Russian industry can carry out.

Similarly, Russia’s relations with the Sudan, the Central African Republic and a number of other countries on the continent could develop in the near future.

Digital path to freedom

Over the past few years, Pro-Kremlin political technologists have been working intensively in East Timor. Their activity is aimed at obtaining real independence by this state, which, according to CWT ideologist Alexei Muratov, should begin with the abandonment of the us dollar as the national currency.

These ideas fell on fertile soil. The local population and national elites have long been dissatisfied with the situation when most of the profits from the exploitation of the subsoil of this island state go to transnational corporations, while the Local Treasury receives only crumbs in the form of modest tax deductions. De facto, East Timor is now the raw material appendage of the Western world.

The appendage is rich, having promising from the point of view of the development of gold deposits, platinum, and offshore oil.

The abandonment of us dollar and the transition to cryptocurrencies in foreign economic activity is the first serious step towards obtaining real national independence, which will allow this former Portuguese colony to dispose of the natural resources of the island in the interests of its country and its own population.

Cryptocurrency Recognition

The use of blockchain technology in the economy makes it possible to remove from the agenda a list of acute problems that are currently relevant for dozens of countries and state entities. First of all, we are talking about countries and republics that are completely or partially unrecognized by the world community and for this reason do not have the ability to conduct full-fledged international economic activity. The hostages of this situation are hundreds of millions of people around the world, affected by a huge number of rights, including freedom of movement. The countries and regions themselves, even fully self-sufficient, are deprived of normal development due to economic sanctions and lack of access to international markets.

The digital economy and cryptocurrencies open a wide door to a new world for these countries. The development of digital technologies and the transition from the status of unrecognized to decentralized blockchain States gives the territories a chance for successful intensive socio-economic development without changing the current legal status, which is very important, because the process of official recognition by the world community can take years, if at all possible.

On the territory of the former Soviet Union, there are several state entities that have not yet received wide international recognition. But the most acute issue with the implementation of international financial activities is in the Donetsk and Lugansk people’s republics.

The basis for the breakthrough of the economic blockade, a ram designed to crush the citadel of the hegemony of us dollar, should be a new generation cryptocurrency “PRIZM”. It is a fully decentralized and self-regulating electronic currency, which is technically much more advanced than bitcoin. Its premining requires low computation time, and the blockchain ensures increased safety of operations, high download speed and a number of other extraordinary benefits. But, perhaps most importantly for the cryptocurrency that claims to be widely used, “PRIZM” at the “subatomic” level is free from the threat of reverse centralization, from which bitcoin and all its forks suffer today without exception.

More information about the ideology of the movement “Change the World Together” (CWT) and cryptocurrency “PRIZM” can be found here.

Related Posts:

  • No Related Posts

Could Bitcoin Someday Replace Fiat Currencies in Inflationary Economies?

The recent escalation of the U.S.-China trade war has brought currency … troubled nations look to Bitcoin as an alternative to peg their currencies?

The recent escalation of the U.S.-China trade war has brought currency manipulation back on the table. Many crypto-analysts are attributing Bitcoin’s price spike as a consequence of geopolitical instability. With the dollar and yuan embroiled in controversy, could troubled nations look to Bitcoin as an alternative to peg their currencies?

When most people think of Bitcoin as a hedge against hyperinflation, Venezuela comes to mind. After all, for much of 2017 and 2018, the country has been turning to cryptocurrencies as a solution to its monetary nightmare. It’s caused many analysts to ask whether Bitcoin could gain its first ‘test’ as a reserve currency through adoption in troubled countries.

Venezuela bitcoin

Venezuela As a Test for Bitcoin

The situation is not as easy as it seems. This year, despite still experiencing hyperinflation, Venezuelan interest in Bitcoin has plummeted. Today’s trading volumes are some 50% less than what they were in February in the country. Weekly, around 2,487 BTC was traded then on LocalBitcoins, for example; Now, that number is sitting around 433 BTC or so weekly. Has Bitcoin failed the so-called ‘Venezeula test’ as a reserve currency?

There are multiple reasons for Bitcoin’s now-declining success in Venezuela. One is likely Bitcon’s increasing fees, which have sharply increased since February. Another possible reason could be LocalBitcoin’s new enforced KYC measures, which have pushed many retail users off of the platform. Still, Bitcoin has not proven itself reliable in Venezuela, as its citizens flock to other cryptocurrencies like DASH or Litecoin. Frankly, transaction fees matter when your sovereign currency is worth a fraction of a penny.

Newcastle United FC

The Real Obstacle to Bitcoin

A hardcore skeptic might say that Bitcoin failed Venezuela. However, a geopolitical analyst might also ask: why would a nation suffering from hyperinflation want Bitcoin competing with its sovereign currency? This was partly the idea behind the Petro, intended to be Venezeula’s own native cryptocurrency but it failed.

The real test for Bitcoin is not whether or not it has staying power in countries suffering from hyperinflation. The truth is, Bitcoin cannot prove itself as a store of value until a country recognizes that pegging its inflationary currencies to Bitcoin is the best course of action. It’s then that we’ll know for sure that Bitcoin has proven itself. After all, Bitcoin is an apolitical entity—there’s plenty of reason to think that a struggling nation would prefer pegging its currency to Bitcoin as opposed to dollar or yuan, which always comes with strings attached.

The CEO of investment website ADVFN, Clem Chambers, writes in Forbes that “without doubt, the fear of Chinese yuan devaluation has driven Bitcoin prices up and this driver is on the ascendant.” Yet, he seems to misunderstand the geopolitical realities. Investments will not flock to Bitcoin from Americans or Chinese folks disgruntled with their fluctuating currencies. Instead, it will come from the peripheral nations who, having their currencies pegged to the dollar (for example), will begin to search for alternatives to this instability.

That solution may, in fact, be Bitcoin someday—if the leading cryptocurrency can convince a struggling government it is worth betting on, that is.

Do you believe that Bitcoin could someday be a reserve currency for trouble nations suffering from inflation? Let us know your thoughts below in the comments.

Images courtesy of Shutterstock.

Buy Cryptocurrency


Visa and Mastercard

I agree to the terms & conditions

You buy :

In dollars :

To email :

As a trusted news outlet in the blockchain and cryptocurrency industry, BeInCrypto always strives for the highest journalistic standards and adheres to a strict set of editorial policies. BeInCrypto is an independent website with authors and management that may personally invest in cryptocurrencies or blockchain startups.

Related Posts:

  • No Related Posts

BankThink Blockchain, crypto tech need clear rules of the road

I know from experience. Last year, I invested in a blockchain startup that was forced to shut down six months after launching. Its founders were acting …

It’s not regulation itself that acts as a barrier to innovation, but the lack of clear regulations that is impeding progress for digital currencies and blockchain technology.

I know from experience. Last year, I invested in a blockchain startup that was forced to shut down six months after launching. Its founders were acting in good faith and following the regulatory direction that was given to them in 2018. But by mid-2019 that direction took a drastic turn when the U.S. Securities and Exchange Commission notified the company that airdrop tokenization falls within its purview.

This is partly why leaders in the blockchain and cryptocurrency space are so vocal with their frustrations regarding the need for clear regulations. Lawmakers are also beginning to recognize this urgency.

In June, Rep. Warren Davidson, R-Ohio, criticized an SEC official during a hearing for what he called the agency’s “third-world” approach in formalizing crypto regulations. The result, Davidson warned, is a business climate where innovators are forced to move offshore to locales more welcoming of digital currencies.

Sure enough, Circle’s CEO, Jeremy Allaire, told the Senate Banking Committee during a July 30 hearing that his company had begun moving “international-facing products and services into a licensed Bermuda entity.”

This is due, in part, to the fact that countries such as Bermuda, Switzerland, France, Japan and Singapore are crafting policies — or already have such policies in place — conducive to crypto and blockchain innovation.

During the July 30 Senate Banking hearing, which focused on how to regulate digital currencies and blockchain, international trade and finance specialist Rebecca Nelson listed a slew of concerns that continue to haunt cryptocurrencies. Among these are crypto’s high volatility, its lack of consumer protections and its association with illicit activities, such as money laundering.

The panelists who testified also raised concerns that legitimizing digital currencies could create larger disparities for the financially disenfranchised — those classified as unbanked or underbanked consumers.

These are all valid concerns and only reinforce the need for concrete, clear regulations.

Building a solid regulatory foundation now — while cryptocurrencies are still in their relative infancy — is the only way to ensure market volatility is mitigated, illicit activities snubbed out and financial inclusion is mandated.

As one panelist reminded Senate Banking members, bitcoin — the first established cryptocurrency — emerged from the ashes of the 2008 financial debacle because its founders wanted “to offer a more efficient, confidential, and accessible payments system than the bank-operated payments system.”

“The problems of inequality and inefficiency that bitcoin and the cryptocurrency industry has set out to solve are not problems of technology, they are problems of policy,” Mehrsa Baradaran, professor of law at the University of California, Irvine, said in her testimony. “And it is in this chamber, and not in a tech startup office or anonymous white paper, that these problems must be addressed.”

Baradaran makes a good point. Unfortunately, the Senate Banking Committee already has a full plate, to put it mildly. In addition to overseeing the banking and payments sector, the committee oversees mortgage and deposit insurance, public housing, nursing homes, urban development and transportation, government contracts, export controls and more.

Even the 85-year-old SEC, which the Senate Banking Committee also oversees, still relies on laws that date back to the Great Depression to shape policy on digital assets and cryptocurrencies. These outdated laws are inadequate to address the roughly 2,200 cryptocurrencies now in circulation, or to govern technologies that are evolving daily.

Modern regulatory guidance is needed to ensure the cryptocurrency landscape is inclusive and honest, that innovative technologies can flourish, and innovators are not tempted to migrate overseas to do business.

As with every entrepreneur in any sector, one can only succeed if they clearly understand the rules.

Brad Robertson

Brad Robertson

Brad Robertson is founder and CEO of Polyient Labs, a blockchain incubator with offices in Phoenix, San Diego and Denver. He has been an entrepreneur in the technology sector for 25 years and earned his JD from Pepperdine University.

BankThink submission guidelines

BankThink is American Banker’s platform for informed opinion about the ideas, trends and events reshaping financial services. View our detailed submission criteria and instructions.

For reprint and licensing requests for this article, click here.

Related Posts:

  • No Related Posts