The [Gates] foundation is involved in digital money but unlike Bitcoin it would not be anonymous digital money. In Kenya M-pesa is being used for almost half of all transactions. Digital money has low transaction costs which is great for the poor because they need to do financial transactions with small amounts of money. Over the next 5 years I think digital money will catch on in India and parts of Africa and help the poorest a lot.
Business Insider — Clusterstock
Bill Gates Says Digital Currencies Could Be Huge
Jillian D'Onfro
23 comments:
Who is issuing It?
See Wikipedia/M-Pesa
Digital currencies mean EVERYBODY loses currency sovereignty.
I'm not saying it can't happen, there are plenty of stupid policy ideas being embraced, like the euro.
However, it is a stupid idea.
Gates either doesn't understand or doesn't give a shit. His life and the lives of his progeny for years to come will never be affected.
We'd all just have to become subjects of the cell phone companies...
"a nation of the cell phone, by the cell phone, for the cell phone...."
Hey, if the cell phone people promised to issue enough to allow full employment, it might be worth a look... ;)
Easiest way for global-scale capitalists to take over weak developing counties: take over their currency systems.
I guess Gates is hoping that he can weave some magic over the rubes with the word "digital" - as though digital currency is some exciting new thing that we haven't had for a couple of decades now.
The battle is on for the commanding heights of the 21st century global order - the fight is between democratic governments and corporate behemoths. The behemoths are currently winning the fight for the world because the naive anarcho-libertardian wing is eager to bend over and hand it to them.
I guess Gates is bored with his software empire and wants to build a currency and banking empire to go with it.
There is no reason a central bank can not strike digital coin in their normal fiat denominations. In fact the government should prohibit any other digital currency from being used. Central banks aren't exactly innovative but they will get the hang of it.
From Dirk Bezemer to Gang 8
D.J.Bezemer Feb 9 at 8:14 AM
To
gang8@yahoogroups.com
I will give a lecture about it quite soon, jointly with a bitcoin enthusiast.
We agree that if treated as an investment vehicle, it's no different fomr tulip bulbs and a complete waste of time analytically.
But if treated as new payment system, it is a sign of things to come: large scale settling without banks, not just for firms on trade credit but for everyone. That IS significant! So probably others (governments? firms? banks) will try to join in, and it will transform how we pay each others, and then probably how we borrow. Bitcoin itself may survive or thrive or go under, but the new developments in banking it signifies will be with us ten years from now.
The central bank already does issue digital currency.
But the central bank is not open to non-members. The rest have to go through established channels and pay the fees. And, of course, the unbanked are excluded.
Outside of black-market activity, I don't think we will get a lot of large-scale settling on any anonymous digital alt-currency platform in the long-run. The transparency of a currency to other eyes: regulators, legal systems and management systems is one of the main factors contributing to the utility, stability, safety and reliability of the currency in the first place, and the costs of excluding these factors merely for the sake of anonymity will outweigh the benefits for most people. The supposed cost savings of cutting out the middle man are proving to be illusory, as it is turning out than in order for the bitcoin platform to be really useful and insured against all the glitches, frauds and inconveniences to which it is susceptible, the platform has to be buttressed by a whole new army of service providers and exchange merchants that are building all those additional costs back in.
It seems every generation must re-learn the lesson of why we have governments in the first place.
Tom if you use Debit which sounds like the equiv. of what they are doing in Africa the interchange fees are lower than the Credit card fees of around 2%+
Here is some fed info on the debit card fees allowed for our current system:
http://www.federalreserve.gov/paymentsystems/regii-average-interchange-fee.htm
The Board’s Regulation II provides that an issuer subject to the interchange fee standard (a non-exempt issuer) may not receive an interchange fee that exceeds 21 cents plus 0.05 percent multiplied by the value of the transaction, plus a 1-cent fraud-prevention adjustment, if eligible.a The data that payment card networks reported to the Board for 2012 showed that the average interchange fee per transaction received by non-exempt and exempt issuers remained at the fourth quarter-2011 levels of 24 cents and 43 cents, respectively.b
So it only costs about 43 worst to do a Debit Card under the current system... not too bad... but imo the Credit is a big rip-off.... but I dont see how the bitcoin type things can get directly involved in the Credit side....
rsp
"Unbanked" just means people who don't have bank accounts Tom. There is no difference in principle between the "unbanked" and the "un-bitcoined." It's not as though either system is more inherently exclusionary than the other.
In the third world, the unbanked are the chief users of digital currencies. In the US, the unbanked use P. O. Money orders, which are inconvenient and come with a fee, instead of checks or electronic payments that are either free or cost much less — and they have to borrow at usurious rates from payday lenders, but that's another matter. That's millions of people in the US, including a lot of US service people.
It doesn't seem to be that there is any issue in principle with someone turning themselves into a Bitcoin bank. A person just needs to build up a big Bitcoin wallet and then loan bitcoins at interest. They can even be a "fractional reserve" bitcoin bank if they want. Nothing is stopping them. However, for such a system to be safe and viable for those who avail themselves of it, there will have to be contracts and records, and a willingness to expose oneself to legal recourse for violations of contract. And in that case, all the anonymity goes out the window.
It doesn't seem to be that there is any issue in principle with someone turning themselves into a Bitcoin bank. A person just needs to build up a big Bitcoin wallet and then loan bitcoins at interest. They can even be a "fractional reserve" bitcoin bank if they want. Nothing is stopping them. However, for such a system to be safe and viable for those who avail themselves of it, there will have to be contracts and records, and a willingness to expose oneself to legal recourse for violations of contract. And in that case, all the anonymity goes out the window.
Yes, the entrepreneurs get that. More importantly though, governments will not permit compete anonymity, which is tantamount to permitting tax evasion, money laundering and criminal activity, as well as evasion of capital controls where they are in place, e.g., China.
Outside of black-market activity, I don't think we will get a lot of large-scale settling on any anonymous digital alt-currency platform in the long-run.
The handwriting is on the wall. Anonymous transactions are out. There's a big kerfuffle over this going on in Bitcoin now, with the Libertarians committed to anonymity and the entrepreneurs putting up the investment make it work having acknowledged that governments are not going to allow an anonymous parallel system.
I said this from the get-go. Governments will not allow an anonymous system and they have the power to deal with it. That was obvious from the beginning.
But digital currency is here to stay and governments and the financial establishment will adapt. Entrepreneurs are also committed to a legitimate complementary currency, which is good in that it will provide the needed competition to reduce extraction of economic rent through imposition of excessive transaction costs.
Tom, I guess I don't really understand what your position is. Of course digital currencies are here to stay. We have had digital currencies for a long time. Most people hold most of their money in digital form.
But the only benefit of an alternative currency like Bitcoin is anonymity. Every other difference between Bitcoin and conventional state-managed and bank-managed digital currencies comes up advantage to the established currencies.
But the only benefit of an alternative currency like Bitcoin is anonymity. Every other difference between Bitcoin and conventional state-managed and bank-managed digital currencies comes up advantage to the established currencies.
I don't see anonymity being the sole or chief reason that digital complementary currencies are innovative.. With a complementary digital currency like Bitcoin, it's possible to complete an international transaction essentially for free if one has the digital equipment, which most people now do. The only issue now is if one wishes to convert the complementary currency into the state currency.
There needs to be some sort of exchange for currency conversion, and entrepreneurs know that. They are in the process of setting them up and talking to governments about how to do this legally. This means giving up total anonymity, at least in some jurisdictions. That's pretty well decided now. The details just need to be worked out.
The importance is in the payments system. For example, payments on eBay are almost exclusively handled through PayPal via with buyers using credit cards and seller's accounts being credited. There's a significant transfer/conversion fee associated with each transaction. about 3%.
Handling payments directly using a complementary currency could significantly reduce that fee and make payment instantaneous. This would likely result in credit card companies reducing their fee to compete.
Of course, government and financial establishment can compete if complementary currencies are permitted. But they won't unless they are forced to do so. So the alternatives are to either permit complementary currencies and compete by increasing convenience and reducing fees, or outlawing complementary currencies, i.e., outlawing innovation to preserve artificial pricing.
Even if government do decide on the latter course, digital currency is the wave of the future because it is much more efficient than cash. I doubt that anyone will be using cash before very long now that just about all younger people are equipped with device capable of using digital currencies. Cash will be an anachronism. And with cash goes traditional anonymity. But the black market will find a substitute for sure.
With a complementary digital currency like Bitcoin, it's possible to complete an international transaction essentially for free if one has the digital equipment, which most people now do. The only issue now is if one wishes to convert the complementary currency into the state currency.
But that issue is the big issue. Bitcoin is too erratic, unregulated and unsafe to use as savings vehicle, so it turns out people really want to convert it into and out of conventional currencies right away, and only use the bitcoins for the transaction. But in that case, the transaction really isn't free, because there are additional currency exchanges on each end of it. The bitcoins really just add an extra unnecessary step to existing digital currency transactions.
And Bitcoin will never be stable, because it is inherent in the Bitcoin system itself that there is no stabilizing monetary authority. What stability it can have relies entirely on the emergent self-regulation of a radically laissez faire system - and we have seen how well that works, haven't we?
The big "dream" of Bitcoin was to establish a viable non-state currency. All of its other alleged benefits were dependent on that central dream coming true. And that dream now appears dead as a doornail. Although the people who have bought into Bitcoin and have wealth riding on it keep trying to move the PR goal posts now as one piece after another falls apart, they can't stop the slow-motion death.
I can't take it anymore. If I hear one more person talk about bitcoin and anonymity, I'm going to shoot myself.
There IS ZERO anonymity with bitcoin!!! ZERO. NONE. ZILCH. NADA. It is nothing like cash or coins where your transaction is left without a trace. On the contrary, every transaction is completely public, the address of the transaction is recorded and EVERYONE has a copy of the record. Additionally anyone that wants to monitor any wallet address can simply watch the block chains for transactions to that wallet address. Take a minute and look at BLOCKCHAIN.INFO to disabuse yourselves of any notion of anonymity. Notice the addresses and amounts passing in front of you? Those are unique addresses. That is a Wallet Number and a bitcoin record. Everyone that has a bitcoin, has a bitcoin wallet where they store their bitcoins. It is probably the most traceable currency system ever invented in human history. We know the complete history of every single bitcoin from day one and we know exactly who has which and from where they came. bitcoins are NOT anonymous. They may not have your first and last name, just as your internet address isn't your name, but believe me, they are very, very traceable and easy to figure out who is transacting.
The focus is on Bitcoin now because it was first out of the chute and it is still the major player, with the most entrepreneurial interest.
The issues are, first, digital currencies and, secondly, digital complementary payments systems.
Money is most of its forms is being digitized, and complementary currencies, which have been around for some time, are also being digitized. This is a recent development and we are just at the beginning stages. Most people in the game think that digital money is the wave of the future because it much more efficiency that older systems.
Right now, things are just in the process of getting sorted out, and whether Bitcoin will continue to stay in the lead is in question. However, some big money is betting on it. However, there are rivals, and the game is only just getting underway. At this point we can only see the outlines. But there is enough momentum to suggest that this is a winner, and people putting money behind it testifies to that.
I am pretty sure this is not going away, although I don't see just what form or forms it will take. There are a lot of contingencies involved, not the least of which is what governments choose to do. From what I can see they are interested in digital currency and also realize its efficiency in payments. They are just beginning to grapple with where they want this to go.
Russia has already made its decision, which is forget about innovation. That's a big reason that Russia is an economic backwater other than what mining and armaments contribute. Their big innovative successes were the MIG-21 and the Kalashnikov.
China is out due to capital controls, not to mention endemic corruption that government is trying to curtail.
The US seems to be much more sophisticated about innovation though, and so it is not surprising that government has taken a wait and see approach, while sending signals that it will not permit the use of crypto currency for illegal purposes.
I can't take it anymore. If I hear one more person talk about bitcoin and anonymity, I'm going to shoot myself.
There's an illusion of anonymity, and some people are apparently overly credulous about it, considering NSA has access to all digital communication.
To succeed as a payments system, Bitcoin must overcome exchange risk from the time a quantity of Bitcoin is purchased to the time it is sold. This suggests the evolution of a swap market for Bitcoin, which for all I know may already exist, not unlike what has existed in conventional FOREX since before Bretton Woods was abandoned. In other words I agree to buy Bitcoin today for spot value and simultaneously agree to sell it (repurchase my $s) at some later date with a designated counterpart who wants to receive Bitcoin from me in exchange for $s (or some other currency, to settle some underlying transaction in commodities, industrial goods or whatever.
Post a Comment