Topic: What is the problem with centralized currencies? - page 2. (Read 1417 times)

That is why a lot of people hates centralization because it means that they can easily control our account and do the things that they want to do with our accounts. Bitcoin is one of the solution to that problem and people now are just transferring their money from bank into bitcoin because governments cannot touch their money if it is on bitcoin.

People. That is the problem with centralized currencies. At this point, a select few people control the centralized currencies of the world and, as the saying goes, he who controls the wealth controls the people.

With an unregulated and peer-to-peer network like Bitcoin, the people with the currency controls the currency. It is up to US what the values are. Therefore, by definition of the saying above, we control ourselves.

Something that I don't like from centralised currencies is they can supervised our transaction and can make assumptions which they think is correct and froze our account, in centralised system we don't have the full power to control our money and there will authority that can make extra rules to seal our freedom

I wouldn't say that "Someone always has the ability to counterfeit" is a good argument when it comes to railing back against centralization, but it would make sense under certain other arguments. And while governmental bodies can change the rules when they see fit, it is typically uncommon for them to do something like that in most countries throughout the world. A majority maintain similar laws for long periods of time with minor changes or amendments to existing laws.

Beyond that you have a pretty good basis for an argument though. Good job, to say the least.

- in decentralized currency, bitcoin can't be counterfeited.
- this is why decentralized is better than centralized, no one can control and change the rules, i've tired when my banks change their tos.
- so far this is the problem for them to control the inflation.
- yeah they can lock or freeze our money if we against their Tos.

in additon:
- decentralized is good for those who want privacy like purchase porn, gambling etc.

that's true , it's not that easy to change any regulation regarding currency ,
but it's always better to use a decentralized currency like crypto when you have know well about it ,
as time goes by people will switch into decentralized currency if then the crypto project accepted well in general public , hopefully
governments are the only authority that most people know about who control of currency circulation , anyone else?

You really do not need to research anywhere else to know the problem when it comes to centralized currencies,lets take the example of Ethereum,hope everyone knows that there was a hard fork when there was a hack and everyone close to Vitalik Buterin lost some money with it and how he single handily took the decision to fork the entire chain without any consensus,if you develop something you need to stand by the general consensus and never take individual decisions according to your taste and not to forget the pre mine which is really huge and that is the biggest example i can give you for these sort of centralized currencies.

In my own view, trusting someone else or institutions like government is a very big problem when it come to the issue of centralisation of currency. This is because the government will be able to manipulate, print or influence its availability or holding its which can either lead to inflation or deflation in the economy.

Problems of centralized currencies is if the people delegated to manage it make wrong decisions we are likely to see a negative impact not only on the currency but the economy of that country. One of the biggest problems of centralized money to date is counterfeit and corruption which can only be minimized by adopting the blockchain technology.

The biggest ill I see with centralised money is ownership. If I pick any currency note, it is clearly written on top-
"Promised by Central Bank"
So in the end, I am just representative of that money, real ownership of that note is still with government, the government who proudly says,
"People's government "
But in reality we are the ones on bad side always and government kill our rights through regulation and we aren't free to use our own money.

Nice topic!

I believe the biggest problem with centralized currencies is how the actual use differs from the theoretical use. Theoretically a committee of experienced people managing the currency may be wise, but if those people are human (as they all are) they are at risk of becoming corrupt and then manipulating the currency to suit their own benefit. And there are likely more scenarios where centralized currencies are manipulated to "protect the people" or "protect from a greater evil"...like hyper inflation or recessive spending or to spark an economy. This type of rationale leads to a slippery slope of continued manipulation.

And Bitcoin isn't as decentralized as we all hope. There is a core group of developers that used to influence Bitcoin quite a bit and now we have a core group of miners that can impose their will over the future of bitcoin (see UASF and SegWit topics for more detail).

I read in Nathaniel Popper's Digital Gold book that only 15% of bitcoin's blockchain remains in the form that Satoshi deployed, due to the custom developing that has gone on. Would you think this is good for a decentralized currency or bad?

Here's an opinion article that may provide an interesting perspective: https://medium.com/metacurrency-project/national-currencies-arent-as-centralized-and-bitcoin-isn-t-as-decentralized-as-you-think-fa2afa022a2b

And can I request one thing - will you please share your research paper with us here? We all benefit from the different analysis, opinions, and research our fellow members are conducting.

I think the major problems with centralized currencies is inflation, manipulation, looting and higher interest rates. The financial problems we are facing today is due to centralized currencies. Decentralized currencies on the others hand ratified this issue.

You can't really do a lot of things if the currency is centralized because it is controlled by a certain group whether organization, government and many more. That is why people now are just looking for a currency that is decentralized that gives freedom to themselves and also give them a place where they can decide on what they will gonna do to their money without having issue from the government.

Maybe someday this problem will be solved. I think that is not difficult to come up with encrypted removable media for cold storage savings in bitcoins. Similar to a Bank card, but without reference to any Bank or e-wallet.

i completely agree with 1, 2 and 3 you nailed it. but you screwed up in number 4 because it is total nonsense.
there is nothing more secure than a properly created bitcoin wallet.

you can obviously use a web wallet, use a wallet on an online computer riddled with malware but that doesn't mean bitcoin wallet is insecure it means you had some cash with you and put it in a see through plastic and left it on a park bench and closed your eyes wishing nobody takes it!

a cold storage that is created right can not be penetrated. and it is SIGNIFICANTLY more secure than anything else you can ever imagine.

To be honest, I don't think any of the reasons you listed here are significant. The main reason that decentralization is appealing is because of trust. With crypto, people place their trust in the regulation of the currency into algorithms, as opposed to trusting a government that can be corrupt and manipulate the currency.

1. Counterfeit is an extremely minor issue.
2. The fact that a centralized authority can change the currency is actually arguably a positive, since it means the government guarantees a certain value for the currency.
3. The ability to print more money is necessary with any physical money.
4. I don't know what you are talking about with people's bank accounts being frozen or how that would not apply to bitcoin. In fact, bitcoin wallets are SIGNIFICANTLY less secure and reliable than bank accounts.

The main problem is not someone counterfeiting.

The main problem is that you are trusting someone else, no matter whether it's the government, your bank, whatever. Any sort of centralized framework, you are putting a lot of trust into others. As humans we have seen that others, no matter how trustworthy they seem to be can also turn around and stab you in the back. This isn't something that you would want.

Another problem as you said is the way that governments are manipulating their currencies to suit their needs, to fulfill the promises they made back in election. This often involved printing a lot more currency than the country could afford to in order to not tax more people(a very unpopular policy).

Bitcoin basically solves all this. You don't need to trust anyone.

In my own view, the biggest reason against centralized currencies is the fact that people manning the systems are corrupt and can't be trusted. You see, the financial and banking systems which issued those currencies have been in there for a long, long time and slowly the problem of human nature crept in. Had it been managed by people who have good intentions and clean conscience, then we may not need to have a decentralized system of currency as represented by Bitcoin.

Still, I believe that we can have the best of both worlds. Bitcoin can posed a big challenge to the centralized currency system to improve their structure and governance so that they can gradually restore the faith of their intended market...while at the same we are enjoying the benefits of decentralization.

In life, we would learn that not one single solution fits the big problems and challenges we faced as a human race.

Yes and the big problem with centralized currency are the inflation we are losing the values of money
 put the funds in fiat money is like burn the money slowly,
after couples years later the values of money is losing and our whealty is losing too, we can not become
 controller on printing fiat money and can not ask about it.

 The problem with this is the question of who will be the leading country who will launch the centralized currencies? What will be the basis to be qualified? Who will be the authorized persons to do this? But beyond those questions, the fact that clear rules must be set prior to that.  I guess, if we have centralized currency, the authority can manipulate the flow of money easily.  They can also control the production of money as well as its value.  More people will be having the idea of counterfeiting the money since there will be only one pattern of money.