Suppose someone innocently bought something, from a seller who later turned out was selling materials deemed by China as against the government. With ordinary cash you will not be viewed as part of the anti-government conspiracy. With electronic payments you will betraced and may be forced to prove your innocence.
In the times of Stalin or Pol Pot instant execution would deny the innocent the time and opportunity to prove innocence.
6
Standard Oil was broken up, The Bell System was broken up, because they were monopolies that were detrimental to the health of the economy and consumers. With Facebook's myriad of past abuses and mistakes, and an entry into cryptocurrency, the reasons behind those previous actions seem pretty quaint in comparison to the respective dangers they posed.
6
Currency is stable only when all parties agree on its value, meaning they have to trust each other to some extent. That alone is enough to suppress crypocurrency. But China is trying to centralize surveillance of all spending no matter how small. Their purpose is blatantly authoritarian and they don't care who knows it because their citizens will eventually have no choice.
12
It's refreshing to hear that the Chinese Government is just as gullible as the rest of the world when it comes to crypto currencies. The Libra failed once Facebook realized that the whole block chain concept is an unverifiable scam. For example, there's nothing to prevent someone from duplicating a BitCoin 'bank note'.
2
This move by China... while inevitable, and probably postive overall for it's citizens in the long run.... is a poster child reference example of why FaceBook cannot be allowed to successfuly proliferate Libra in the world.
In reality... everything we purchase today with any mechanism other then actual paper currency.... can and will be subject to authorized surveilance by a government. What does vary by nation is what laws govern what a government can and cannot suveil and what written authority they require to do so.
The fundamental problem with cryptocurrencies is they lack any actual financial foundation (be it a gold standard, or a trusted currency in the world) which protects holders from fraud and manipulation (right now, mainly speculation in the crytocurrency markets). As such.. the only cryptocurrencies that can actually thrive are going to be government backed and hence not actually "crypto" at all... simply digital.
1
Let’s not forget that all countries in the world would use crypto currency to eliminate US sanctions. US sanctions are only possible because US banks dominate the global monetary clearing house market.
I see large banks (and the US) as initially reluctant to adopt crypto currencies for this very reason, lack of control. Unless of course they can replace it with another form of control.
And as sure as I write this, when the world finally adopts a crypto currency like Bitcoin, some hacker, or a group will devise a way of substituting or hacking the Blockchain (Transaction Log), the foundation of any crypto currency.
Probably best to start stuffing your mattress now.
9
@PC
The real issue is it is used (other then the preper crowd) for illicit and illegal transactions.. because it is essentially untraceable. As such.. it can and will be used by arms dealers and their customers, terrorists, drug dealers, etc.
2
If I go to CVS and buy a pain reliever with my credit card, the knowledge that I purchased a pain reliever is already out there somewhere. The only thing keeping it a secret is the good will of the transaction handler. Does anyone seriously think, anymore, that this data isn't secretly and not so secretly sold to the highest bidder?
Libra and all these other 'virtual' currencies just streamline the process of transferring funds. "Controllable Anonymity" produces a massive spit-take on my end. Let's hear another load of drivel from the great Pooh Bear of China!
I don't get excited about any of this now that regulators have finally woken up. These virtual currencies, until now, were used for two purposes: illegal activity, and tax evasion. I would like to see the end of both.
3
@CF This is why Bitcoin is the one and only digital currency that provides a reasonably amount of privacy (although with significant effort transactions can be tracked in the event it’s required on a case by case basis), borderless and decentralized.
I hate to break the news to you but your USD is still the king champion for illicit activity and tax evasion by a long shot (ahhh Panama papers just to scratch the surface). It has also been dying a slow death due to the insatiable desire to keep printing more irresponsibly (hence the need to move away from central financial authorities). Let’s talk about the banks who every year are fined billions for “breaking rules” but they can afford it on the backs of their customers. Bitcoin helps one un-tether one from this cesspool of greed, irresponsibility and control.
5
@Gary bitcoin will ultimately fail as governments put more restriction on it's use.
Basically bitcoin is a speculative (ie: it trades at varying prices) electronic method of barter exchange. Nothing more, nothing less.
Governments tolerate bartering to a point.. but will clamp down overall because it is a mechanicsm (like all batering) to avoid paying taxes to the government.
1
@Chuck Bitcoin is still in its infancy and has accomplished the impossible so far. Agreed it is speculative at this point but the fundamentals are getting stronger. I don’t believe it will be a currency in the near future but has the potential long term. As for governments banning Bitcoin.....they can try but will ultimately fail. It’s open source and unleashed into the internet Wild, Pandora’s Box cannot be closed. If one or two governments will begin to fully adopt Bitcoin and drive up there reserves, then it will be a domino effect as countries move to secure their position. Remember, the current financial system is crumbling and they don’t have a Plan B. But actually there is a plan B, they just don’t know it yet. Speculative on my part of course.
2
Whenever you buy something with a credit or debit card you are in principle using an inflationary digital currency that is tracked by a central authority (your bank) and accessible to law enforcement on demand. Every transaction is censorable and reversible. Oer time the money gradually becomes worthless if saved. This is the current status quo. In contrast to this situation.... the whole point of cryptocurrencies is that they are DEFLATIONARY and reside on a PUBLIC LEDGER which is both IMMUTABLE and UNCENSORABLE. Do you think any corrupt government would use a public ledger that would hold them accountable to their people? Or use a money with a limited supply that they can't manipulate for political gain? Or give up their power to ban people or reverse transactions? No, I didn't think so either. Cryptocurrencies are for people and smaller organizations who truly want to save value and bypass banks. They are definitely not for banks and large organizations. The whole point of cryptocurrencies is to take power from the state and return it to the people. And the governments are most likely a little scared. So they invent spyware shitcoins and hope no one will know the difference. Anyway, that's my viewpoint.
7
@Lars, why would a debit card be inflationary and a cryptocurrency deflationary?
2
@Lars wrote: The whole point of cryptocurrencies is to take power from the state and return it to the people.
That is the narrative of course of the bitcoin crowd. It is a theme hijacked from 19th/20th century anarchists.
The reality is.... it is mostly an illicit transaction mechanism to avoid taxation and oversight of legal vs illegal. It is in effect, a digital bartering mechanism. The problem is it is not underwritten by any actual solid financial backing.. and as such.. it harkens back to the days when anyone could open a bank and lend and borrow... which ultimately led to the crash of the 1920s world wide and forced governments to step in with stronger central banking. In other words.. it is ripe for corruption and crime.
Which is why it will ultimately come under the thumb of most governments.. and in particular your countries government. Your tax funded social programs require transaction transparency for both taxation and for legal compliance purposes.
8
@Giovanni Ciriani
It's not.. he is simply pushing a narrative convenient to his desire to "stick it to the man" and avoid transparent transactions. Anyone that wants a lack of transparency in what they are purchasing in this digital data era.... wants to hide something illegal.