Bank of Korea's research on crypto and FIAT currency

Barbarian

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Quote from: Iranus on April 29, 2017, 03:43:46 AM

Quote from: Hazir on April 27, 2017, 12:18:16 PM

I agree here. People are biased alredy, they don't want to spend coins because of a fear that in the future Bitcoin will be much more valuable.
Bitcoin community is suffering from our own 'Bitcoin Pizza' syndrome.

I don't think this is a problem at all. If people don't spend it, that just makes their dreams of price rises come true - there's less Bitcoin being thrown into exchanges and the price stays propped up.

People hold fiat and don't spend it sometimes as well. Some people hold millions in fiat. It just means that people get better off by holding Bitcoin. Good for them.

Correct money needs to fulfill both options, money can be spent but it can also be saved, and the fact people save bitcoins is a good sign since that shows they believe in bitcoin and its long term prospects.

michnelli6

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Quote from: JENREM on April 28, 2017, 02:23:50 AM

Quote from: mynhpark on April 27, 2017, 10:23:24 AM

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

@mynhpark ,i think digital exchange will be dominant in the near future. but not now maybe. because not all countries will see these as to what south korea have seen it. but there will always be a room for adaptation. if central banks of the world will really research for this and find something more beneficial from this, then maybe that is the time that digital currency will be dominant.

Yeah, the South Korean provided a shelter for the Bitcoin and the rest of the Digital currencies to be used as a medium of exchange. It is also a challenge for the economists to play their role in the development and adoption of the crypto currencies for the betterment of their countries. Also the research clearly predicts that the coming age is of the digital currency and digital exchanges.

lixer

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Quote from: cpfreeplz on April 28, 2017, 09:14:48 PM

Quote from: mynhpark on April 27, 2017, 10:23:24 AM

However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

Not at all. The majority of people I know that use bitcoins don't spend them ever or rarely spend them. I don't have anywhere local that accepts bitcoins and I don't trust online stores that accept them, so it's almost exclusively a store of value for me.

It totally depends on the region you are living in to. In Europe & America there are lots of places where you can spend the bitcoin. Even it has started in Japan. There are the websites who accepts the Bitcoin and you can buy anything from there. I do agree that it is a store of value for many people and looking at the current situation people are storing it for the reason that its value is going to be increased.

olubams

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Quote from: mynhpark on April 27, 2017, 10:23:24 AM

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

The outcome of this report is very on point which is something that have been subject to discussion even on this forum several times. Bitcoin has its advantages which has equally enumerated but the concern is the regulation as well the security because his do a company guarantee my returns if I keep my btc with them? In a case where there is crash in the price of bitcoin how do they even account for such losses? How do government even regulates the activities of such entities considering the anonymity. These are issues that are very much valid in which I believe are still standing in the way of bitcoin.

PokerFace3

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Quote from: davis196 on April 29, 2017, 12:14:55 AM

Quote from: mynhpark on April 27, 2017, 10:23:24 AM

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

Nothing new.The central bankers still think that decentralization is a problem.It`s not...
We don`t need a government to secure the currency.If the people trust a currency,they will use it without
premission from the government.

Yes exactly the bitcoin is too strengthen that id don’t need any security of the government. In fact there are the governments that came to it and accepted it because they know it better that the future is of the bitcoin and the alts will also survive with it.

No one is asking from any sort of security for the crypto the only demand of the people who have adopted the Bitcoin is to accept it as a legal currency. The government is why not adopting the crypto for the moment only is due to certain legal issues i.e. the major government agreement are for the fiat stuff and it will take them to switch.

beerlover

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Quote from: Idrisu on April 27, 2017, 02:08:24 PM

Quote from: Harlot on April 27, 2017, 11:34:34 AM

Im with them with their research as they are all right about making Cryptocurrency as a medium of exchange. Also South Korea is mostly a credit card dominant country nobody really needs to convert their money to Korean Won as almost always they accept Credit Card payments even the little shops. Adding Bitcoin into the scene might add another option for us tourist when going there, also it may actually boost the tourism itself. Koreans are actually thinking ahead aside from thinking the negatives of decentralized currency.

Not only you and your country, I am also with them as they try to make crypto currencies as they medium of exchange! Fiat currencies are too expensive, risky and venerable for looters. If any country can adopt crypto currencies as a medium of exchange then the sky will be they limit. However majority of the third world countries will benefit from bitcoin as dollars exchange is want keep them poor.

When you declare anything as a medium of exchange it means that you are making it money and money can be stored for the value that it has. It may take the governments for the acceptance of the crypto to deal in instead of the Dollar, but it will take decades for it and I am sure the bitcoin prices will be touching the sky at that time.

Supercrypt

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Quote from: mynhpark on April 27, 2017, 10:23:24 AM

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

Yes absolutely I do. It’s a very detailed and critically analyzed report. According to the report instead of inflation there will be deflation in the bitcoin I guess all those will agree with this that are connected to the BTC.

They have raised an issue of decentralization with no government insurance so in my point of view it is such a strong currency with all it characteristics that it don’t need to. The governments may not prefer to keep it as a security but people are.

ethereumhunter

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Quote from: Iranus on April 29, 2017, 03:43:46 AM

Quote from: Hazir on April 27, 2017, 12:18:16 PM

I agree here. People are biased alredy, they don't want to spend coins because of a fear that in the future Bitcoin will be much more valuable.
Bitcoin community is suffering from our own 'Bitcoin Pizza' syndrome.

I don't think this is a problem at all. If people don't spend it, that just makes their dreams of price rises come true - there's less Bitcoin being thrown into exchanges and the price stays propped up.

People hold fiat and don't spend it sometimes as well. Some people hold millions in fiat. It just means that people get better off by holding Bitcoin. Good for them.

i am agree too, even people hold their bitcoin and their money, i don't think that bitcoin price is also gets stagnan because i am sure that in out there especially in the market, there will be many traders that trading bitcoin no matter bitcoin-fiat or bitcoin-altcoin. i think it is a good news for us and maybe korea will approve bitcoin in their country so bitcoin will be spread in korean and korean people can use bitcoin with safe.

joshy23

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Quote from: surus on April 29, 2017, 04:17:18 AM

The biggest break-trough for cryptocurrencies will be when the first country will accept BTC or smth. for tax payments. Which country do you think is the most "open minded" to make this possible?

Well Japan officially recognizes bitcoin as legal tender. So it means that it is like fiat money for Japanese public. The privilege follows the implementation of a new law in Japan which categorizes Bitcoin as a legal payment option within the country.

surus

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The biggest break-trough for cryptocurrencies will be when the first country will accept BTC or smth. for tax payments. Which country do you think is the most "open minded" to make this possible?

Iranus

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Quote from: Hazir on April 27, 2017, 12:18:16 PM

I agree here. People are biased alredy, they don't want to spend coins because of a fear that in the future Bitcoin will be much more valuable.
Bitcoin community is suffering from our own 'Bitcoin Pizza' syndrome.

I don't think this is a problem at all. If people don't spend it, that just makes their dreams of price rises come true - there's less Bitcoin being thrown into exchanges and the price stays propped up.

People hold fiat and don't spend it sometimes as well. Some people hold millions in fiat. It just means that people get better off by holding Bitcoin. Good for them.

Kemarit

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Quote from: mynhpark on April 27, 2017, 10:23:24 AM

Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value.

Do you agree with this research result?

This caught my attention. I don't agree with the following reason why people should not invest in bitcoin as store of value. What has security or trust issue has something to do with it?

Let say, if one currency is inflationary and another currency is deflationary in nature, which do you think the general population rather store or save over the long term? Obviously, people will side with the one that rises in value over time, which is bitcoin.

Quote from: mynhpark on April 27, 2017, 10:23:24 AM

Instead, digital currency may be used as a medium of exchange dominantly.

Yes, definitely. With Bitcoin, it’s possible to pay for goods and services instantly by transferring the digital money straight from your wallet to someone else’s digital wallet. Easy as that.

Amph

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if they have concern about insurance and security, they can start to make those so called bitcoin bank and help the security level of anware citizen that are aproaching bitcoin for the first time, they would despoti their bitcoin in those online bank and have all the insurance they need

i mean this is not really an excuse to no allow bitcoin to grow, the real excuse which they will never admit, is that they can't control it

Quote from: panju1 on April 27, 2017, 08:17:23 PM

Quote from: mynhpark on April 27, 2017, 10:23:24 AM

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

I think it is the other way around. Cryptos, especially the leading ones like Bitcoin, will function better as a store of value because of their deflationary nature. Right now, because of the volatility it doesn't function as a store of value. But eventually, we will get there.

volatility is needed to have higher poitential value and to function as a store of wealth, if the price was stagnant forever your treasure will never grow, like it's happening to gold, i don't want only to have my money secured i also want to have them appreciate over time with a certain risk

davis196

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Quote from: mynhpark on April 27, 2017, 10:23:24 AM

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

Nothing new.The central bankers still think that decentralization is a problem.It`s not...
We don`t need a government to secure the currency.If the people trust a currency,they will use it without
premission from the government.

ASHLIUSZ

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Long back itself the plan got into the testnet. Their plan is to digitise the fiat and provide it the same value of the currency but every coin counts as a single token. This has been found successful for the transaction purposes within the country and further development is under process with few blockchain technology firms.

MingLee

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Quote from: mynhpark on April 27, 2017, 10:23:24 AM

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

Well, using Bitcoin as a medium of exchange could be one use of it, but it surprises me that their conclusion for Bitcoin/digital currencies not being a store of value relies solely on their comment that there is a lack of insurance and the presence of some minor "trust issues" that don't really have any major affect on something like Bitcoin right now.
Bitcoin's deflationary bias definitely makes it a less attractive investing medium, but to say that digital currencies will end up as a primary medium of exchange may be a little disingenuous. I don't know, maybe their research is a lot better than my opinions.

cpfreeplz

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Quote from: mynhpark on April 27, 2017, 10:23:24 AM

However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

Not at all. The majority of people I know that use bitcoins don't spend them ever or rarely spend them. I don't have anywhere local that accepts bitcoins and I don't trust online stores that accept them, so it's almost exclusively a store of value for me.

Barbarian

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Quote from: mynhpark on April 27, 2017, 10:23:24 AM

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

I will take it, of course they are going to say that bitcoin is lacking government oversight but that is the whole point, we want to avoid giving the power to corrupt politicians.

X-ray

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Quote from: iDice_io on April 28, 2017, 02:29:19 AM

Good to see banks are taking steps to improve the current system. The blockchain may help eliminate banking systems currently in place, and also allow the bankers to profit by taking those costs down.

it's not a good thing in my opinion. Let say the bank has tried to make his own crypto currency, and this will make a bad impact for the crypto itself. If their crypto can be related to cryptocurrency asset and it will good for us.

it just eliminating the useless cost.

iDice_io

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Good to see banks are taking steps to improve the current system. The blockchain may help eliminate banking systems currently in place, and also allow the bankers to profit by taking those costs down.

JENREM

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Quote from: mynhpark on April 27, 2017, 10:23:24 AM

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

@mynhpark ,i think digital exchange will be dominant in the near future. but not now maybe. because not all countries will see these as to what south korea have seen it. but there will always be a room for adaptation. if central banks of the world will really research for this and find something more beneficial from this, then maybe that is the time that digital currency will be dominant.

OROBTC

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Quote from: panju1 on April 27, 2017, 08:17:23 PM

Quote from: mynhpark on April 27, 2017, 10:23:24 AM

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

I think it is the other way around. Cryptos, especially the leading ones like Bitcoin, will function better as a store of value because of their deflationary nature. Right now, because of the volatility it doesn't function as a store of value. But eventually, we will get there.

(Bold highlighting mine)

That's a good observation. BTC is a bit too volatile to count on as a Store of Value for now. I agree that we will get there someday though.

* * *

My experience and reading would let me believe that South Korea's analysis of BTC prospects is pretty accurate. S Korea is a very advanced country, and they keep their word, HONOR still means something. I do business with Korea, their products are excellent quality at good prices.

panju1

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Quote from: mynhpark on April 27, 2017, 10:23:24 AM

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

I think it is the other way around. Cryptos, especially the leading ones like Bitcoin, will function better as a store of value because of their deflationary nature. Right now, because of the volatility it doesn't function as a store of value. But eventually, we will get there.

sportis

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Quote from: mynhpark on April 27, 2017, 10:23:24 AM

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

Would be interesting to give us a link, I believe this paper is written in English, so as to read their conclusions. But if the authors of paper support that flaw of cryptocurrency is decentralization and needs the insurance provided by governments then maybe they are joking or they are paid trolls in the payroll of the bank. As an example what the insurance of the Zimbabwe's government?

Idrisu

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Quote from: Harlot on April 27, 2017, 11:34:34 AM

Im with them with their research as they are all right about making Cryptocurrency as a medium of exchange. Also South Korea is mostly a credit card dominant country nobody really needs to convert their money to Korean Won as almost always they accept Credit Card payments even the little shops. Adding Bitcoin into the scene might add another option for us tourist when going there, also it may actually boost the tourism itself. Koreans are actually thinking ahead aside from thinking the negatives of decentralized currency.

Not only you and your country, I am also with them as they try to make crypto currencies as they medium of exchange! Fiat currencies are too expensive, risky and venerable for looters. If any country can adopt crypto currencies as a medium of exchange then the sky will be they limit. However majority of the third world countries will benefit from bitcoin as dollars exchange is want keep them poor.

Hazir

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Quote from: mynhpark on April 27, 2017, 10:23:24 AM

Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note.

I agree here. People are biased alredy, they don't want to spend coins because of a fear that in the future Bitcoin will be much more valuable.
Bitcoin community is suffering from our own 'Bitcoin Pizza' syndrome.

Quote from: mynhpark on April 27, 2017, 10:23:24 AM

However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value.

Government insurance is not worth anything, banks are lying, quantitative easing is rampantly growing bigger.
Fiat money is good only here and now, tomorrow we can have another global economic crisis.

forthewin

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Quote from: mynhpark on April 27, 2017, 10:23:24 AM

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

These results are pretty much what we already know but it's good that they agree that bitcoin is deflationary because that is something that most of us think is a good thing.

Harlot

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Im with them with their research as they are all right about making Cryptocurrency as a medium of exchange. Also South Korea is mostly a credit card dominant country nobody really needs to convert their money to Korean Won as almost always they accept Credit Card payments even the little shops. Adding Bitcoin into the scene might add another option for us tourist when going there, also it may actually boost the tourism itself. Koreans are actually thinking ahead aside from thinking the negatives of decentralized currency.

Iranus

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Having a fixed supply just means that the value of the coin is determined by how much people need to hold, and all transactions are just in between two people.

Unfortunately you couldn't actually measure the coin against another currency, because nothing is stable enough to judge the value of it. If you put it against the US dollar you'll find that it has a 1-2% deflation rate, when in fact it doesn't.

It certainly doesn't have a "deflationary bias" though. I see that as a misconception. If you found something with a stable value to compare it against, it would naturally be neutral and its value is only determined by the state of the economy and how much money people put into it.

mynhpark

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South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies. Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing. Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note. However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

Do you agree with this research result?

Topic: Bank of Korea's research on crypto and FIAT currency (Read 1578 times)