EBA: Investors should avoid Bitcoin, identifies 70 risks - page 2.

Anders

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Quote from: herzmeister on July 09, 2014, 09:05:01 AM

Quote from: Anders on July 09, 2014, 07:33:38 AM

Is it possible to have transaction speeds below a second and still have it secure? Huh

Bitcoin has a transaction speed of about 10 minutes per transaction.

if it's centralized, sure.

Also Ripple has instant transaction verification, and it's decentralized (in theory), as it's practically a web of trust. Banks could implement Ripple, or just rip (ahem) it off.

Only the standard for the protocol etc will be centralized; the actual operation of the virtual currency will be decentralized it seems:

"A governance authority may, at first, appear incompatible with the conceptual origins of VCs as a decentralised scheme that does not require the involvement of a central bank or government. However, the mandatory creation of a scheme governance body does not imply that VC units have to be centrally issued. This function can remain decentralised and be run through, for example, a protocol and a transaction ledger." -- pp. 40: http://www.eba.europa.eu/documents/10180/657547/EBA-Op-2014-08+Opinion+on+Virtual+Currencies.pdf

I wonder if the currency can remain decentralized and have super fast transaction times of under a second. Maybe it's possible! The miners don't have to function exactly as in Bitcoin. Some proof of work algorithm would probably still be needed though for security reasons.

herzmeister

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Quote from: Anders on July 09, 2014, 07:33:38 AM

Is it possible to have transaction speeds below a second and still have it secure? Huh

Bitcoin has a transaction speed of about 10 minutes per transaction.

if it's centralized, sure.

Also Ripple has instant transaction verification, and it's decentralized (in theory), as it's practically a web of trust. Banks could implement Ripple, or just rip (ahem) it off.

Anders

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Bitcoin has shaken up the thousand years old banking sector. That's pretty impressive. The EBA report makes it clear that the top banking authorities take cryptocurrencies very seriously. They even seem to want to implement their own virtual currency with strict regulations and personal ID requirements etc. Is it because the current EU currency, the euro, sucks?

If they will try to launch a mainstream cryptocurrency I hope they will make it peer-to-peer and that the tough regulations will be for banks and exchange services etc, not for us ordinary people who should be able to make transactions directly person to person (physical or legal), and with ZERO transaction fees. And with super fast transactions, say a fraction of a second for micro payments and payments in shops etc.

Is it possible to have transaction speeds below a second and still have it secure? Huh

Bitcoin has a transaction speed of about 10 minutes per transaction.

Beliathon

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https://youtu.be/PZm8TTLR2NU

Quote from: ljudotina on July 08, 2014, 03:34:47 PM

Quote

and warns financial institutions to keep their distance until the industry is regulated

What's so bad about it? BTC is not going anywhere (in large scale) untill there is legal background. USA, EU or anywhere else in the world. Yes, BTC does not need regulation as it has no boundaries, but legal infrastructure can greatly help and speed up adoption, and that's what we really want, isnt it? BTC lovers want it, BTC investors want it, there is practicly not anyone who doesnt want it....

The beauty (and true power) of any decentralized pseudonymous cryptocurrecy is that unlike banked fiat, but like cash and digital information, obedience to any regulation is strictly optional. These regulations are fundamentally unenforceable.

In other words:

Anders

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To be fair, here are the benefits of virtual currencies (VCs), such as Bitcoin, listed by the EBA:

"Economic benefits

-Transaction costs
-Transaction processing time
-Certainty of payments received
-Contributing to economic growth
-Financial inclusion outside the EU

Individual benefits

-Security of personal data
-Limited interference by public authorities" -- http://www.eba.europa.eu/documents/10180/657547/EBA-Op-2014-08+Opinion+on+Virtual+Currencies.pdf

ljudotina

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Quote

and warns financial institutions to keep their distance until the industry is regulated

What's so bad about it? BTC is not going anywhere (in large scale) untill there is legal background. USA, EU or anywhere else in the world. Yes, BTC does not need regulation as it has no boundaries, but legal infrastructure can greatly help and speed up adoption, and that's what we really want, isnt it? BTC lovers want it, BTC investors want it, there is practicly not anyone who doesnt want it....

Anders

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Quote from: bluemeanie1 on July 08, 2014, 01:08:38 PM

Quote from: Anders on July 08, 2014, 01:06:07 PM

The cryptocurrency regulated by an governing authority would then be a new kind of virtual currency, separate from Bitcoin and other unregulated currencies I guess. Huh

in other words, looks like Bitcoin, smells like Bitcoin- but isn't Bitcoin. They want to make a Bitcoin impostor to placate the masses so they believe they have the same monetary freedom as Americans.

-bm

Competing cryptocurrencies are good for the market. The problem is that the virtual currency regulated by a governing authority would have the unfair advantage of being accepted by ordinary banks and other financial services, while Bitcoin and other unregulated cryptocurrencies would be shunned by the mainstream financial markets in the EU.

bluemeanie1

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bluemeanie

Quote from: Anders on July 08, 2014, 01:06:07 PM

The cryptocurrency regulated by an governing authority would then be a new kind of virtual currency, separate from Bitcoin and other unregulated currencies I guess. Huh

in other words, looks like Bitcoin, smells like Bitcoin- but isn't Bitcoin. They want to make a Bitcoin impostor to placate the masses so they believe they have the same monetary freedom as Americans.

-bm

Anders

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Notice that the EBA wants Bitcoin and other cryptocurrencies to remain unregulated:

"Other things being equal, this immediate response will allow VC schemes to innovate and develop outside of the financial services sector, including the development of solutions that would satisfy regulatory demands of the kind specified above. The immediate response would also still allow financial institutions to maintain, for example, a current account relationship with businesses active in the field of VCs." -- pp. 44: http://www.eba.europa.eu/documents/10180/657547/EBA-Op-2014-08+Opinion+on+Virtual+Currencies.pdf

The cryptocurrency regulated by an governing authority would then be a new kind of virtual currency, separate from Bitcoin and other unregulated currencies I guess. Huh

LostDutchman

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Quote from: giveBTCpls on July 08, 2014, 12:39:32 PM

Quote from: Bogleg on July 08, 2014, 12:20:41 PM

Quote from: giveBTCpls on July 08, 2014, 12:17:31 PM

if they regulate bitcoin, it will become the opposite of what Satoshi envisioned
if they don't, it will always be seen as some crazy investment and not taken serious enough by most people

To join the mainstream, it will need to be regulated at some point.

So it becomes pointless as it becomes just another tool controled by the powers that be. This is not what satoshi wanted.

No but it IS what all those who advocate for Bitcoin "regulation" wanted.

Assholes, anyway.

giveBTCpls

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Quote from: Bogleg on July 08, 2014, 12:20:41 PM

Quote from: giveBTCpls on July 08, 2014, 12:17:31 PM

if they regulate bitcoin, it will become the opposite of what Satoshi envisioned
if they don't, it will always be seen as some crazy investment and not taken serious enough by most people

To join the mainstream, it will need to be regulated at some point.

So it becomes pointless as it becomes just another tool controled by the powers that be. This is not what satoshi wanted.

Bit_Happy

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A Great Time to Start Something!

Quote from: franky1 on July 08, 2014, 09:05:37 AM

blah blah bah

european announce incoming

"investor warning: trading in bitcoins is risky, investors can lose aswell as gain"

.. and now to get on with my life..

It is a refreshing upgrade from China "speaking" and having the market actually pay attention.

Bogleg

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Quote from: giveBTCpls on July 08, 2014, 12:17:31 PM

if they regulate bitcoin, it will become the opposite of what Satoshi envisioned
if they don't, it will always be seen as some crazy investment and not taken serious enough by most people

To join the mainstream, it will need to be regulated at some point.

giveBTCpls

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if they regulate bitcoin, it will become the opposite of what Satoshi envisioned
if they don't, it will always be seen as some crazy investment and not taken serious enough by most people

bluemeanie1

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bluemeanie

Quote from: Beliathon on July 08, 2014, 12:06:39 PM

Quote from: bluemeanie1 on July 08, 2014, 11:50:06 AM

The backstory here is that the EU is in serious trouble financially. Especially the PIIGS countries, thus they are trying to find a legitimate way to sell VC regulation to the public and keep the economic hostages in place.

ya most of these opinions are fairly predictable if you follow the discussions. The UK is caught between a rock and hard place, because if they install truly free markets they have to do deal with their much larger and powerful little brother- the United States of America, who have the tendency to make any industry they develop look like crap. Ireland of course chimes in with the typical wackadoo ranting they're well known for. Berlin is a fairly interesting contribution as always and no doubt you'll see interesting things come out of there- it's the only Western economy that has extensive relations with the ex-Soviet regions.

I tend to think the future is going to fracture Europe along north and south lines which will cause enormous stress to places like Belgium and Ireland. It's generally not looking good for Europe or the parts of the US that depend on European markets( ie NYC ). What most Euros dont realize is the US is a vast country with a huge productive interior that they know virtually nothing about.

France, Spain, Italy are going to have huge problems.

-bm

unpure

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The concern from EBA is not without baseless claim.

bluemeanie1

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bluemeanie

I don't think EU citizens have much to look forward to as far as monetary freedom goes. Mostly the activity will be in the US and ex-Soviet regions. Some spots in South America(eg. Uruguay) might have some interesting developments. Also Israel is bound to be a major center of activity.

In the US the states to watch are CA, NV, NH, AZ, TX, ND (maybe GA and SC).

There has been some relevant legislation- all it needs is some public support and we can move it through congress. EU is a lost cause(in more ways than one)

https://beta.congress.gov/bill/113th-congress/house-bill/77

-bm

Beliathon

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https://youtu.be/PZm8TTLR2NU

Quote from: bluemeanie1 on July 08, 2014, 11:50:06 AM

The backstory here is that the EU is in serious trouble financially. Especially the PIIGS countries, thus they are trying to find a legitimate way to sell VC regulation to the public and keep the economic hostages in place.

Nailed it.

Related:
http://bitcoinsberlin.com/bitcoin-doesnt-properties-money-changes/

http://www.pfhub.com/ireland-central-bank-official-warns-virtual-currencies-can-challenge-sovereignty-of-states-909/

http://www.zerohedge.com/news/2014-07-06/european-banks-are-trouble

http://www.theguardian.com/technology/2014/jun/17/bitcoin-privatise-pound-free-market-thinktank

European banksters: "Trust our system, it may not be decentralized but it's backed by loads of men with guns!"

The problem with that logic is that any violence-backed system is inherently unstable.

Anders

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Quote from: Noruka on July 08, 2014, 10:22:57 AM

Quote from: Anders on July 08, 2014, 06:15:34 AM

"The European Banking Authority (EBA) has weighed in on the use of virtual currency, and recommends that Bitcoin be avoided until regulatory systems are put into place.

A document prepared by the EBA for address to the European Commission and European Parliament sets out the regulatory body's opinion (.PDF) on virtual currency — such as Bitcoin, Litecoin and Peercoin — and warns financial institutions to keep their distance until the industry is regulated." -- Full story: http://www.zdnet.com/eba-investors-should-avoid-bitcoin-identifies-70-risks-7000031287/

who gives a F%$* what the EBA says. They have no weight on the legality of bitcoin.

The EBA may not have any legal authority to make laws but they can propose recommendations, such as:

"Until a comprehensive regulatory regime is developed, (if it is developed at all), only those risks can be mitigated that arise in the interaction between VC schemes and the regulated financial services sector (but not those that arise from activities within or between VC schemes). This would include risks of money laundering and financial crime, the risks to conventional payment systems, and some risks to individual users. To that end, the EBA recommends that national supervisory authorities discourage credit institutions, payment institutions, and e-money institutions from buying, holding or selling VCs, thereby ‘shielding’ regulated financial services from VCs." -- pp. 44: http://www.eba.europa.eu/documents/10180/657547/EBA-Op-2014-08+Opinion+on+Virtual+Currencies.pdf

bluemeanie1

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bluemeanie

The backstory here is that the EU is in serious trouble financially. Especially the PIIGS countries, thus they are trying to find a legitimate way to sell VC regulation to the public and keep the economic hostages in place.

-bm

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