Big Financial Institutions will corrupt Blockchain Tech?


#1

A friend of mine and I were discussing how the Goldman-Sachs interest in Bitcoin tech could be a boon to the crypto world or it could mean that big financial will use the tech in a not so pleasant way.

His thoughts were that they would use it to corrupt the way money is controlled. A “one world currency” that could be controlled instead of decentralized.

What are some of your thoughts?


#2

Well I had this discussion with someone. The idea is that the bitcoin nodes all have a vote. I say this is not true. The ones that have a vote are the groups that control the most wallets. Let’s say that all the major exchanges decide to fork bitcoin and add some kind of feature. Will the people running the nodes be able to stop them? NO because if I can’t send my bitcoin to an exchange and they force me to upgrade the wallet I will have to comply. It’s a numbers game the people controlling the most wallets win not the people that run nodes.

So in that regard it could well happen that all the banks fork bitcoin and if you want to use it then you have to upgrade. This is an extreme example they will probably have to run with the standard bitcoin client a long time and gather as many wallets as they can. If they have the majority of the wallets in use then they can dictate policy.


#3

And that is scary. If this does indeed happen, it would be pretty good proof that decentralization can never truly exist unmolested.


#4

That’s what i thought. Thinking on how a lot of cryptos have a potential way of them being centralized; is there one out there that can’t be? Is that what devs need to being working on as a betterment to crypto? A crypto that is truly decentralized that can’t be corrupted or controlled.


#5

The only way to force decentralization is to have one wallet address per client. So that would mean that for every client you would have another machine. Well the banks surely have the resources to do that and I’m not sure it’s even technically possible without loopholes to implement such a client. Just look at all the cracked protocols look at DRM etc…

And even then if the banks control a lot of wallets they again could force a fork.


#6

fortunately you’re not forced to use said currency. The “one world currency” is part of the “one world government” under the “new world order” the Bildenberg group is striving to create. The European Community was pretty much one the first steps and the members of that group would very much like to apply the same model to north America and parts of Asia.

In case you get bored and you’ve got a few hours to kill… watch this…


Watch this too


#7

Another good documentary is Zeitgeist


#8

This is one of the most fascinating topics in cryptocurrency, in my opinion. There are so many aspects to it, and so much bias, that it always makes for an interesting discussion. :smile:

In my opinion, crypto-currency is poorly named. Crypto-coins definitely exist, as a quantity recorded on the associated block chain, but only very rarely do we use them as a direct measure of value, which is what a currency does.

This is where the English language sort of fails us, and sadly, I don’t have another one to use, so I’ll do my best to explain my take on the matter. In common parlance, we don’t make a distinction between a paper note in your hand and the measure of value that it represents. We simply use the word “currency” for both. This isn’t quite accurate, though, because there is a difference. A currency - a dollar, or a yen, or a euro, or a peso, is an abstract unit of measurement, much the same as a meter, or a second, or a liter. A meter stick isn’t a meter, it’s a stick one meter in length. I could give you a ribbon measuring one meter in length, but I could never give you an actual meter. Similarly, a dollar bill isn’t a dollar, it’s a bill, one dollar in value. I could never give you an actual dollar, only an item measuring one dollar in value.

The financial world uses the term “commodity” to distinguish between an item and it’s value. For example, one bushel of corn (a commodity) currently has a value of $3.65. A cow (also a commodity) in my region has a value of $150. If I wanted to trade a cow for an equivalent value in corn, I’d have to ask for 41.09 bushels. I might make that trade, swapping one commodity for another using a currency (in this case, the dollar) as a measure of value for each item, without ever involving the use of dollar bills. Dollar bills are simply another commodity, useful because I can only fit so many cows and bushels of corn in my pocket.

Understanding this, it’s fairly simple to see that cryptocoins don’t generally act as a currency, but as a commodity. When we buy items using Bitcoin, the prices we pay (the measures of value) are almost always in a fiat currency. I don’t pay 0.0216 BTC for 1 GHX valued at 0.0216 BTC. Rather, I pay $5 in Bitcoin for 1 GHX valued at $5. The currency of the transaction is in dollars, Bitcoin is simply a convenient commodity for making the exchange.

This, I think, is where the financial giants of the world see immediate utility in block chain technology. Exchanging value around the world is an enormous pain currently. A multitude of systems, processes, and middle men (like the US Federal Reserve) can cause a simple wire transfer to take days to complete, cost a significant amount in fees, and imposes risks associated with relative exchange rates and charge-backs. However, as we know, sending a properly designed cryptocoin anywhere in the world takes minutes, costs a pittance, and cannot be revoked. What bank, in it’s right mind, wouldn’t be interested in this technology?

Will banks attack Bitcoin? Perhaps one day, but I think it extremely unlikely that they’ll mount a direct attack on the network. There is simply no reason for it. A bank doesn’t want your loyalty or your obedience - it wants your money, and Bitcoin currently provides no significant threat to fulfilling that desire. It doesn’t matter how much Bitcoin you buy and hold, because sooner or later you’re going to use it for something, and once you do, all roads lead back to the bank. The banks have no more reason to attack the Bitcoin network than they have to attack gold or corn or cows.


#9

How about digital cash or digital currency or digital money?


#10

I mean it’s all imaginary. Fiat included. Anything that has value only has value because we place value on it. A rock off of the ground may not be valuable to most people but to a person who takes that rock and shapes it into a spear point to catch tonight’s dinner with; that rock may bee worth a lot.


#11

“Digital cash” is my favorite term. It seems to be the most accurate. Physical cash is a vehicle for transferring some amount of value between parties. We use cryptocoins for the same thing, only without all that cumbersome physicality. :smile:

True, value is often relative. There are also a difference between implicit value and explicit value.

Implicit value is the inherent usefulness of an item or commodity. Corn has implicit value in that you can eat it. It doesn’t matter how much someone is willing to pay for corn, it remains just as nutritious. A cow will produce milk whether cattle trades at $150 or $1500 per head. Most of our commodities work this way, in that they have some inherent utility, and the market price is driven by how much someone is willing to pay to gain that utility.

Explicit value is given to an item or commodity by some authority. A currency note, say, a dollar bill, is a fairly pathetic creature, with little more inherent usefulness than a similarly sized sheet of common paper (as anyone living in a mega-inflationary country can surely attest). However, the United States Government has declared that a dollar bill has the value of exactly one dollar, and they honor that declaration by wiping out one dollar of any debt you owe them for each dollar bill you hand over. Since I can always get a one dollar valuation on my dollar bill from the US Government, it would be silly of me to accept a lower value for it anywhere else, so long as the US Government is around. You could say that the US Government has successfully established a price floor for the dollar bill. :wink:

Bitcoin, and other cryptocoins, are interesting because they are a commodity with no implicit value. A quantity recorded on a block transaction really isn’t terribly useful by itself. They have explicit value, but rather than that value being granted and backed by a single authority, it’s granted by community consensus, via the various exchanges. I don’t know whether such a thing has ever existed before, but it’s very interesting to watch this experiment play out. :smile:


#12

I’m with you on that one.

“Cryptocurrency” might be the correct terms but it also sounds Geeky and “Altcoin” sounds like a knock-off to the much wanted mainstream anyway. I’m also growing tired of the term “coin”. It’s hard t explain but coin this and coin that and such coin and other coin is getting old. I know, the root of all coins is Bit"coin" but that doesn’t mean that every new “cryptocurrency” needs to have coin in their name.

and yeah, digital cash all the way in all forms and colors :stuck_out_tongue:


#13

I agree. I’ve never been of the opinion that there’s only room in this world for one cryptographic block chain, one coin to rule them all. I believe that the many different features, both currently available and to be developed in the future, can serve different purposes. Different flavors of digital cash ought to be tailored to their individual purposes - not everything needs or wants on-chain escrow or coin mixing Master Nodes, and that’s OK. No one feature set will meet every need.

The coin that I want to use to buy things online, and the coin that a conglomeration of banks wants to use to transfer monies between themselves, are two very different coins. And, if we’re going to have different coins, I see no reason to name them all the same thing. :smile:


#14

I agree. I just wish people would stop forking good coins to build on top of them and instead contribute their talent to take those coins to the next level. The talent among the coin developers is spread out to wide. I totally understand why some of them rather clone a coin than contributing to one but that is precisely one of the major problems in our small world… to many coins, to spread out, loss of talent and exposure. Not enough combined efforts to make one of the good coins succeed.


#15

This isn’t just a problem with cryptocoins, it’s a general problem with open source software. If the existing development team tends to be stodgy or hidebound, then developers contributing patches and new features will naturally give up on them, and start a fork. This doesn’t necessarily take away from the project, though, since the user community often pressures the original developers to incorporate useful features.

It’s a little more of an issue with cryptocoins, however, since there’s normally a Foundation to convince, and feature changes sometimes impose a fork.