The Bank of England is taking a major step in the digital currency direction. However, rather than recognizing Bitcoin or other digital currencies, the BoE is going to create their own regulated currency which will accompany paper money.
After a three year research into blockchain and cryptocurrency, the BoE finalized their report and stated that the addition of a cryptocurrency to their system would help speed up large contracts. While many would consider Bitcoin as the future of the world’s economies, what they have not done is placed Bitcoin in the currency map in the way the world transacts.
Bitcoin has viability only because some people are willing to trade in it for real currency. In other words, what gives Bitcoin value is real regulated currency that is used to buy and sell bitcoins. While miners might amass large amounts of bitcoin, they cannot value these amounts without referring to legal tender values.
The BoE already has digital transactions in place, adding a Sterling cryptocurrency trading platform would enhance their performance and enable the BoE to close contracts in seconds rather than in days. Now for some explanation as to why current reporting of cryptocurrency is fake reporting.
Cryptocurrency is a digitized value given for every second a PC calculates a transaction. In other words, if you were to let your PC stay online working with a blockchain platform, “hashing” calculating the transactions, you would get paid for your computing power and time in cryptocurrency. The actual “buying” power of the cryptocurrency is set by the finite amount available and the demand set by speculators. However, the “coin” is not a currency; it is a concept that sits outside the monetary markets and gets its “buying power” from people that are willing to buy it in real currencies.
The BoE (and all other national banks) will effectively destroy the Bitcoin market by joining the blockchain technology platform and allowing standard currencies to be traded in two forms, the physical paper and metal from and the digital form. The paper and metal will continue to be used for daily transactions on a street level until the world becomes 100% digitized. After all, can you buy a Coke from a street peddler in Mumbai? Once you can do that, then there will be no need for physical currencies. In the meantime, if you want to buy a car or a house, or if you want to use a credit or debit card, you will be able to link it up to a current digitized version that the BoE and any other national bank will recognize and offer. These new forms of the currency will be the currency and not a replacement. In other words, the BoE cryptocurrency will be sterling and traded as such. The only difference will be the platform that trades in the currency, not the currency itself.
Why is it important for governments to own their own cryptocurrencies and ignore Bitcoin? Anarchy and regulation, once you allow every citizen of Earth the right to create their own currency, you will effectively create an anarchy of currencies that cannot be regulated. You also allow criminal elements access to trading in shadow economies, enabling terrorism and serious crimes to flourish. There is a need to maintain the regulated boundaries of currency and trade, and if that means national banks must integrate a cryptocurrency version of their money, then so be it.
