Chinese Digital Currency Will Not Be Cryptocurrency after All

Coinspeaker
Chinese Digital Currency Will Not Be Cryptocurrency after All

Last week we reported how is preparing their own dubbed CBDC after five years they have been working on it. However, after the analysis of over 50 patent applications that were filed by the People’s Bank of China, it has become clear that the pattern of this digital currency will only appear as a cryptocurrency.

As the deputy director of the People’s Bank of China Payment and Settlement Division Mu Changchun announced, this currency should depend on a two-tier split, with the People’s Bank on top and commercial banks below, all in order to help deal with the size of the country’s economy and population. And even though the two-tier operating system helps to avoid excessive concentration of risks, it seems that it will not be fully decentralized.

After Changchun’s announcement, representatives hurried up with the process of creating the state’s digital money on Aug. 2. Allegedly, the new currency will pass round trade sanctions given by the United States, and should be able to expand investments in the country.

However, there is one thing Changchun said and nobody seems to notice and this thing is that “the two-tier issuance system will be helpful to restrain the public’s demands for assets and strengthen the country’s sovereign currency.”

Let’s just mention that Changchun hasn’t explained how would a common user interact with this suggested mechanism or to what range the CBDC employs distributed ledger technology. It is also pretty unclear when exactly the central bank plans to test and roll it out and, when it happens, will its usage be voluntary or obligatory for citizens.

The PBoC’s Digital Currency Research Lab started with its work back in the summer of 2017 guided by Yao Qian who later left the position.

With more than 50 patent applications, all either invented or co-invented by Yao, 20 of those focus on design specifications of a so-called digital currency wallet.

The goal is to build a wallet for storing digitized yuans. However, as per patent application, this wallet should act only as an extension of assets held in custody at a bank account. That approach seems to be similar to the one of Bitcoin’s – acting as a peer-to-peer transaction system where users possess private keys to control the asset.

However, there is a legit question about to what degree the PBoC’s digital currency system may include the features of blockchain.

Even though some patent documents filed shows that the central bank once had been exploring the idea of using a distributed network to manage nodes for verifying transactions, Changchun added that the strategy has been quite changed over the years.

He said:

“Since we are using digital fiat currency to replace M0, to reach a retail-level adoption, the first issue that we can’t bypass is the demand for high-volume transactions.”

As an example he presented a shopping holiday and wanted to show how blockchain isn’t meant to be for mass adoption:

“Our payments network during last year’s Singles’ Day sale at its peak handled 92,771 transactions per second. In comparison, bitcoin and ethereum handles seven and 10 to 20 transactions per second, respectively. [Facebook’s] Libra, based on its recently released white paper, is 1,000 transactions per second. For a country as big as China, it’s impossible to achieve high scalability by purely relying on blockchain. As such, we have decided to remain technologically neutral and do not necessarily rely on one fixed technological path.”

Changchun ended with a conclusion that even though crypto assets have the natural feature of decentralization, the PBoC’s Digital Currency, under the two-tier system, has to stand by a centralized management model.

Chinese Digital Currency Will Not Be Cryptocurrency after All


Source: coinspeaker
Chinese Digital Currency Will Not Be Cryptocurrency after All

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Replacing in game currency with Eth based token

I manage a number of apps and would like to explore options to replace the in currencies with an ethereum based token that can be moved across app.

Rather than doing this in a private server I’m interested in Ethereum as I’d ultimately like to open up the to apps outside of my ownership and foster an ecosystem for game developers.

There are some issues as far as I can see – wallets need to be created per user and as much of the complexity involved abstracted away.

Wallets need to be seeded with a small amount of Eth to enable transfers. Another layer of friction.

Would working with a plasma chain solution such as Loom help to solve some of these issues?

I’m aware that coins such as Kin provide an off the shelf SDK to enable integration of the kin currency but I have concerns over centralisation and issuance of kin tokens and would like to understand options available on ethereum.

Any input or suggestions would be greatly appreciated.

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Source: ethereum
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Currency Wars Bullish for Bitcoin Price? Optimistic Investor Thinks So

While Bitcoin (BTC) in the wake of the Great Recession, the cryptocurrency has never lived through a macroeconomic imbroglio or geopolitical spats.

Related Reading: Goldman Sachs Predicts US-China Trade War to Continue into 2020, Will It Benefit Bitcoin?

But, ten years after the recession that shocked the world, Bitcoin is about to experience all the motions of a global crisis. And according to a number of prominent investors and analysts, this can only be good for the price of a decentralized, scarce, asset like BTC.

Bitcoin to Gain Steam in

Over the past few months, has been duking it out with the United States. The two economic superpowers have been imposing tariffs on each other, resulting in dramatic tumult in the stock market and the relative value of their respective currencies.

Throughout all this, Bitcoin has managed to stay strong. As reported by NewsBTC previously, since this latest trade spat started in May, BTC has gained over 100%. During the same time frame, the average asset class that Grayscale Investments analyzed has shed 0.5%.

According to Brian Kelly, the in-house cryptocurrency bull and investor on the CNBC “Fast Money” panel, this is far from the end of Bitcoin’s outperformance.

Speaking to the panel on Monday, the BKCM chief executive officer claimed that macro funds and other investors in this class have begun to use Bitcoin as a “hedge” against a currency crisis. 

What’s interesting is that analysts are currently charting a currency crisis. Just yesterday, this outlet reported that the Argentinian Peso had shed approximately 20% of its value. Raoul Pal, a former Goldman Sachs hedge fund executive, claims that this is just the tip of the iceberg.

The Bitcoin bull noted that the Fed Broad Trade Weighted Dollar Index, which tracks the performance of the U.S. Dollar, is about to break past 130 for the first time ever. Simultaneously, the Asia Dollar Index, which tracks the region’s biggest currencies, is on the “CLIFF OF DEATH”, and is poised to fall by over 20% should a long-term head and shoulders pattern break.

Also, there has been talk of a devaluation war between the U.S. and China, which will see the two nations try and devalue their currencies.

Should the crisis happen, BTC should surge, according to the theses of Kelly, Pal, and their peers on Wall Street and on Twitter.  As Kelly explained to CNBC viewers:

“This is the perfect storm for Bitcoin. You have multiple currencies around the world breaking down at the same time that institutional investors are actually embracing this asset class. So the combination of the two things has funneled all the money into Bitcoin.”

Not the Only Macroeconomic Factor to Boost Crypto

The currency crisis that is currently storming isn’t the only macroeconomic factor that may be a boon for Bitcoin.

Here’s a brief list of some of the many issues (most of which deserve their own articles in and of themselves): over $15 trillion worth of negative-yielding bonds (debt), most of which is high-grade; a dovish Federal Reserve that recently cut rates for the first time since the Great Recession; Brexit and other turmoil in the European Union; and currency crises in places like Venezuela, where Bitcoin has already taken grip of the economy.

According to Fundstrat’s Tom Lee, all this is preparing Bitcoin to experience new all-time highs in the near future.

Featured Image from Shutterstock

The post Currency Wars Bullish for Bitcoin Price? Optimistic Investor Thinks So appeared first on NewsBTC.


Source: newsbtc
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China’s Virtual Currency Won’t use a Blockchain due to Lackluster Throughput

Rumors regarding various countries looking to create their own Bitcoin competitor have persisted for some time now. Until this week, there was no indication any major country would go through with those plans. , on the other hand, is looking to shake up the financial markets once again. By creating a stablecoin of sorts, the country might be able to make the Yuan slightly more stable in the future. 

Five Years of Work

For those who have kept tabs on what China is trying to do in terms of , this news might come as a surprise. Despite announcing their plans many years ago, most people had assumed the plan would not necessarily come to fruition in the end. Five years later, and the currency – which still hasn’t been named officially – is ready to be put into circulation over the next few months. Doing so may prove to be quite difficult, as there are still several hurdles waiting to be overcome. 

The main hurdle to overcome is whether or not the people’s Bank of China will gain the necessary approval to create their own currency. The current goal is to bring it to market fairly soon, but there is still no official timeline by any means. As such, no one knows for sure how serious the is about its currency plan, especially given all of the delays and uncertainties surrounding it over the past few years.

A Complex Structure

Under the hood, China’s up-and-coming virtual currency will require a fair amount of participation from banks. The People’s Bank of China will be the main entity in this equation. Additionally, commercial banks will create the necessary infrastructure to ensure this virtual currency can be used throughout China accordingly. For the time being, it remains to be seen which requirements the commercial banks will need to adhere to in this regard.

No Blockchain Involved

Not too many people will be surprised that this virtual currency isn’t a cryptocurrency. It should never be looked as such either. There is one crucial difference: China’s new currency doesn’t use a blockchain. It is unclear which backbone is put in place as a replacement, however. The choice of not using a blockchain was rather straightforward. PBoC officials claim it simply can’t offer the required throughput for retail. A bit of an odd statement, albeit one that also makes sense. Cryptocurrencies have often been scrutinized for their lack of scaling and performance. 

Financial Stability Remains a Problem

There are many reasons as to why the PBoC is looking to issue its own digital currency. Just last week, the bank decided to devalue the Yuan once again. This is all part of the ongoing “financial ” between China and the United States. Since China can’t do much in terms of tax tariffs, devaluing the Yuan is the only logical course of action. It creates even more financial instability in the country at the same time.

This new virtual currency might offer some relief. Creating stability for an inherently unstable currency will not be easy. Additionally, there is the growing concern over how long President will try to hurt the country financially. A virtual currency would give the government more control over China’s financial sector as a whole. Whether this is a good thing or not, is up for debate. It would give the country a way to rely less on the US Dollar as a global currency.

Image(s): Shutterstock.com

The post China’s Virtual Currency Won’t use a Blockchain due to Lackluster Throughput appeared first on NullTX.


Source: nulltx
China’s Virtual Currency Won’t use a Blockchain due to Lackluster Throughput

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Trump’s Currency War With China Could Be Bitcoin’s Do-or-Die Moment

Donald is stoking the flames of a new , creating a do-or-die moment for the cryptocurrency movement, writes Michael J. Casey.
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China’s Digital Currency Is Ready, Central Bank Says

The People’s Bank of says a prototype of its has been fully developed, and it is now ready to launch


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China’s Digital Currency Is Ready, Central Bank Says

China’s Digital Currency Is Ready, Central Bank Says

This article was originally posted on Cointelegraph – an independent publication covering cryptocurrency, the blockchain, decentralized applications, the internet of finance and the next gen […]
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PBOC’s Digital Currency Nearly Ready After 5 Years of Development

Coinspeaker
PBOC’s Digital Currency Nearly Ready After 5 Years of Development

It’s already widely known that is very strict when talking about cryptocurrencies. However, it seems they have nothing against creating their own.

The People’s Bank of China () announced that their dubbed CBDC is finally ready after five years they have been working on it. According to deputy director of the People’s Bank of China Payment and Settlement Division Mu Changchun, the will be using a more complex structure.

Changchun added that the POBC Digital Money Research Group made a prototype completely adopting the blockchain architecture. Changchun, however, tried to explain that the issuance of digital currency in a big country such as China, using a pure blockchain architecture, could not achieve the high concurrency performance required by retail.

Therefore, it was finally decided that the People’s Bank maintains technical neutrality without requiring technical routes.

The currency will depend on a two-tier split, with the People’s Bank on top and commercial banks below, apparently in order to help deal with the size of China’s economy and population. There are a few reasons why the two-tier operational structure is good for the complex community as China. As per Changchun, it will deal with difficulties concerning improving accessibility and increasing public willingness to use, more efficiently.

Secondly, the People’s Bank of China two-tier structure is good to adopt because it will get full chances to the resources, talents and technological advantages of commercial organizations, promote innovation, and compete for excellence.

Also, the two-tier operating system helps to resolve risks and avoid excessive concentration of risks.

And, last but not least is the fact that single-tier operational architecture could lead to financial disintegration.

However, the bank hasn’t mentioned the exact time when the currency would become available.

In spite of its mining ban, China is considered to be one of the most important players in the cryptocurrency market. Because of its volume, decisions, that the government does, have an influence on the entire industry. Be it as it may, cryptocurrency laws are pretty strict. Financial institutions are not allowed to use Bitcoin for trading. ICOs are illegal as well.

In January 2018, the People’s Bank of China, its top financial authority, advised that Bitcoin mining should be moderately suspended on miners through the influence of local authorities. Chinese media did everything to show cryptocurrencies as a tool for criminal actions that created a bad image that had badly manifested on the Chinese Bitcoin ban.

However, China has an inspiration to begin with the monetary format sooner than they wanted at first. The new attitude could create a more stable environment. It’s no wonder why the Chinese government wants to have a digital currency system it could control. Government executives have spent years and years trying to increase China’s independence from foreign tech, and this would be the next logical step.

At the same meeting, China UnionPay Chairman Shaofu Jun said that the goals of China’s digital currency will be hard to reach. While it could resolve some questions about cross-border transactions, long lag times and legacy inefficiencies, he said that “the lack of clear operational processes and a detailed regulatory framework across countries will be challenging to overcome.”

PBOC’s Digital Currency Nearly Ready After 5 Years of Development


Source: coinspeaker
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