Topic: Bank of England Releases Report Digital Currencies (aka Bitcoin) (Read 399 times)

It was selective cut and paste without changes, I chose points that I felt people would be most interested in here after a brief scan, but it's well worth reading the whole thing for a wider view. It's essentially the bullet points of a conference speech more than an in-depth report.

If that's text verbatim from the report, then it can indeed be seen as largely an endorsement. Possibly the precious metals crowd will dismiss this as anti-gold propaganda, but it's curious how candid the Old Lady can be when quietly publishing reports on it's website (i.e. they published a report recently that essentially corroborates the "monetary conspiracy" view)

I'm no big fan of the Bank of England, but this report is interesting. They are basically saying digital currency/Crypto/Bitcoin is better than gold.

http://www.bankofengland.co.uk/research/Documents/conferences/ah0515.pdf

A few bullets:

• Digital currencies as a new form of (token-based) money
– They are money (in all three functions) for at least for some people, and potentially
for a great many more
– Their monetary regimes are based on hard money (harder than the gold standard),
with all of its corresponding problems
– New tokens go to operators of the payment system

and,

• Digital currencies as a new payment system
– Distributed: greater resilience, no central control, a coordination problem
– Pseudonymous (and possibly anonymous)
– Push-only (no ‘direct debits’): payments are final and cannot be imposed
– Individually cheap, but socially expensive (but this could be fixed)

On distributed payment systems,

• Payments are direct and ‘push only’
• Pseudonymous (possibly anonymous)
• No centralisation
– (Massively) increased resilience
– No central control of who pays whom
• Massively reduced counterparty risk
– Final settlement in minutes or seconds
– Therefore less (or no?) need for collateral
• No single ‘master’ ledger
– How do (potentially untrusted) parties
agree on the validity of a transaction?

on Bitcoin:

• The prices of digital currencies have
been extremely volatile
–
σ(BTC/USD)
= 17
x
σ(GBP/USD)
• But the more important point is that they
have, and continue to have, a non-zero
value at all
• This seems to be self-sustaining order
without any state backing

and,

• Transaction rates are extremely low, but
definitely non-zero
• Many companies ‘accept bitcoins’
– Probably several thousand worldwide
– Includes Dell, Microsoft, Expedia, etc.

Anyway, there's a lot in there and I recommend everyone takes a look at it. It's quite big news.

First saw this mentioned here: http://cointelegraph.com/news/115155/bank-of-england-says-digital-currency-is-harder-money-than-gold-nigerias-bank-calls-for-bitcoin-regulation

Note: I just noticed this report is dated 19th May 2015. No idea if it's just been released or if this is old news. Sorry if it is. Coin telegraph states that it was published on August 19th.