IBM Reported To Be Developing Blockchain-Based Currency Transaction System 78
An anonymous reader writes: According to a Reuters source, IBM is working with the U.S. Federal Reserve and other central banks to develop a digital currency transaction system using the same blockchain technology that underpins Bitcoin — but which will deal with existing national currencies. The anonymous source says: "These coins will be part of the money supply...It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain," Despite vocal community protest about the potential "co-opting" of a geographically-neutral cryptocurrency in favor of a centrally-controlled distributed transaction ledger, the IBM project, if true, is only one among hundreds seeking to leverage the blockchain for new transaction systems.
This is some serious sci-fi drama (Score:2, Interesting)
The technology invented by a still anonymous genius, being developed to underpin major parts of the world economy. All that's left is to reveal that he is a sinister mastermind and the blockchain has a critical weakness that lets him, and him alone, control any transaction.
Gives me shivers. The future has arrived.
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1) No evidence that the discoverer of Bitcoin is a genius;
2) No evidence that a single discoverer of Bitcoin even exists - it's as likely to be the product of or under the early auspices of a government agency;
2b) Either way, such agencies will have already spent much longer looking for flaws than any other organisation;
3) The technology underlying Bitcoin is hardly novel;
4) It's one proposed component of one technology used to record financial transactions. To suggest it will "underpin major parts of the w
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discoverer of Bitcoin
The word you are looking for is inventor. A discoverer is someone who finds something that was there all along.
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The word you are looking for is inventor. A discoverer is someone who finds something that was there all along.
While I agree with your definitions and word choice, there's really a vague area between the two terms: did Thomas Jefferson invent a better plough [monticello.org], or did he just discover a mathematical shape that offers the least resistant when passed thru a soil aggregate mixture? Did Thomas Edison invent the lightbulb, or did he just discover a filament that emits light when electrified (and then discovere a way to protect it from oils or direct contact with fabrics by housing it in glass... itself the result of a di
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discoverer of Bitcoin
The word you are looking for is inventor. A discoverer is someone who finds something that was there all along.
In that case, the correct word is "discoverer". The name Bitcoin was invented, but the fundamental algorithms with which Bitcoin solves the distributed ledger problem have always existed; it just took someone asking the right questions to discover them. You don't invent solutions to math problems, you discover them, and that goes for software algorithms just as much as any other form of math.
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No, mathematics like science is purely an invention of the human mind...
One could argue that the entire universe as we know it is nothing more than "an invention of the human mind", leaving no scope at all for discovery, but that is hardly a useful position to take in this context. Even if you did take that approach, mathematics should still be excluded, because mathematical relationships exist independently of human thought. The ratio of a circle's radius to its circumference is tau, and would remain tau even if no human ever existed to discover that fact.
Invention implies an
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There are no perfect "circles" to be found in nature, only things approximately circular. Circles are a platonic ideal, a human construct.
You then contradict yourself with Science is essentially the process of making observations and developing statistically consistent models. Only a human mind can do that. Such a process did not exist before human minds did. Science is a man-made endeavor.
No cryptographic processes for number existed before man invented them. The algorithms were devised not discove
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He chose the right word.
If you understood consciousness, you would realize Man only re-discovers.
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Bitcoin mining is only possible because it was designed that way. If you don't build this into the currency then you can't do it and any virtual coins you do manage to "mint" will simply been see as counterfeit. You can gaurantee that any government central bank using these will keep a central list to verify against - it won't just be in the block chain.
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Of course, it's the same reason they're basically outlawing cash.
Ummm...citation?
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The current financial system requires anybody who wants to exchange funds to go through a mutually trusted third party (a bank, a credit card company, a wire transfer service) who will then take a percentage of the transaction off the top. If you can cut that middleman out of the system you will save everybody a ton of money.
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Bitcoin still has a middleman. Somebody has to put the transaction in a block and find a good hash for it. That takes energy, and they would like to be paid for it.
In fact, for small transactions (less than $1) bitcoin is rather expensive.
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Paypal is rather expensive. But I can do bank transfers for free. And banks are now starting with contactless NFC payments, also free.
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Compare to Google Wallet for things like transferring money between users. Google does this for free (for now), Paypal charges 10%. Why anyone would seek that as a payment method at this point is mind numbing.
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- Is it faster? Most existing transaction systems are already fast (at least as fast as BTC transactions)
- Is it cheaper? This allows you to lower transaction fees, and makes microtransactions possible
- Does it have a lower barrier to entry for small time merchants? This is where existing systems often fall short. PayPal is not too bad (it's bad for other reaso
Sorry bitcoin fanboys... (Score:2, Insightful)
... but if you don't like governments monopolising money supplies you can hardly turn around and insist that only bitcoin can monopolise the use of the block chain algorithm. Freedom is a 2 way street.
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Well, if it's families, it's okay. Everybody's got a family.
The Wallet. (Score:1, Insightful)
How are they going to get past the part that we TRUST the Feds to give us an electronic wallet without backdoors?
IBM Mints Money (Score:3, Funny)
Step 1: Someone develops a cool open source technology
Step 2: IBM slaps their name on it
Step 3: IBM sells it to the government for millions of dollars
Step 4: Profit!
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How is that different from the standard IBM business model?
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Well, there was this one case in the past where they leased something instead of buying it.
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All your base belong to us...
FWIW, I have not heard any of this internally.
STOP SAYING BLOCKCHAIN (Score:3)
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Blockchain. Blockchain. Blockchain.
Also, blockchain.
Lorem ipsum blockchain sit amet, consectetur blockchain elit. Donec luctus nisl non tellus blockchain congue eget et blockchain. Proin et blockchain eget orci blockchain blockchain. Maecenas blockchain ligula eget blockchain malesuada facilisis blockchain id enim. In eleifend urna blockchain, sed scelerisque blockchain maximus vitae. Blockchain semper malesuada nulla. Duis blockchain gravida justo. Vestibulum blockchain leo blockchain. Nulla blockchain ac
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Blockchain sounds sexier.
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Let met guess. You're a "cracker" who run "gnu/linux" from a small dock on a lonely island, from which the ship has sailed.
Conversation went roughly like... (Score:4, Insightful)
Government: We really like the idea of being able to watch every currency transaction in real time...
IBM: We can sell you a bitcoin system.
Government: We don't really like terrorist money, or people mining free cash...
IBM: We can sell you an IBMcoin system. Please fill in the details on this rather large cheque.
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This is the genius of Watson....
it is negotiating deals for us now.
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It's really, really tricky to do - a decentralized peg to external fiat currency with no central/internal control on-chain.
Well, yeah. The get rich quick pyramid distribution is necessary to induce gold fever and guarantee hype (as seen in perpetual carousel or half-assed alts dangerously overselling their wares). People still wanted the stable fiat peg for other stuff, eg on chain fiat/btc exchange. Not going to
Re:Conversation went roughly like... (Score:5, Insightful)
Instead the community glommed onto a rather flawed version based on artificial scarcity...
Scarcity is a fundamental requirement for any currency. It's either natural due to physical scarcity, as in gold, or artificial, as in bitcoin or US dollars or most other currencies in common use. Any digital currency will have the property of artificial scarcity, because information is not naturally scarce. Ensuring that scarcity is maintained without reliance on a central authority is what the blockchain is all about. The only significant difference in the form of scarcity between bitcoins and dollars is that one is governed by a fixed and unbiased mathematical formula, while the other is dictated by politics and thus unpredictable and subject to corruption.
You can complain all you like about "unfairly" enriched early adopters, but I for one would much rather have that than unfair enrichment based on one's political connections. When bitcoins come into existence they're distributed by a scrupulously fair lottery with proportional odds to people doing useful work for the network. When dollars are produced they benefit first with the authority to order them, and then those who decide how they're distributed, then finally the banks and government contractors and employees who get a chance to spend them before prices adjust to the increased supply; at each stage there is plenty of scope for self-enrichment through manipulation of the flow of new money.
Anyway, if you really want to trade traditional currencies online (as credit—the closest you're likely to get to trading the actual currencies), the reference client and server for Ripple are open source under the ISC License [wikipedia.org]. Such a system can't be completely distributed, of course, since it's tied to external centralized currencies, so it's no substitute for Bitcoin; Ripple solves a different, and easier, problem by dealing in loans rather than assets, leaving it up to the users to decide how much credit to extend.
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The only significant difference in the form of scarcity between bitcoins and dollars is that one is governed by a fixed and unbiased mathematical formula, while the other is dictated by politics and thus unpredictable and subject to corruption.
Being able to adjust the money supply is a powerful tool. Like all tools it can be used for good and evil. You're pretending there is no good, which is clearly wrong. In spite of what some kooks believe, a fix money supply like the gold standard or bitcoin is much more horrible system than having to deal with something like the Fed.
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...a fix money supply like the gold standard or bitcoin is much more horrible system than having to deal with something like the Fed.
On the contrary, there is no need to adjust the quantity of money to reflect population growth or GDP or anything else. The value of the money will adjust automatically based on supply and demand; it's impossible to have a shortage or surplus, as the units are arbitrary and have no direct use apart from serving as money. Changing the quantity of money in an attempt to regulate the price ruins an extremely useful economic signal regarding the demand for money and the balance between consumption and investmen
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Real soon now:
"There's a negative interest rate on cash of 10%" (yeah right .. Transactions? Yeah right (as in yeah right for everywhere and everyone)) "you really should go digitally with your transactions."
Then again I hate cash. Kinda think only criminals benefit from it. But chances are it will not only make sure it's legal money everywhere but that they will also see where you spend your money, when, possibly on what, try to figure out why, ..
great (Score:1)
Combine the downsides of fiat money (unlimited printing by inner cabal) with the downsides of bitcoin (Everyone can see your transactions)
No, Actually how about you stay the hell away from me with this rubbish.
This is good (Score:3, Insightful)
EMP (Score:1)
Ok l I know this is an unlikely scenario, but my main concern is that cash no longer becomes physical and can literally magically disappear if there was a global EMP that goes off, eg that Revolution tv series.
Why is "the community" upset? (Score:2)
I don't see why "the community" would be upset about IBM developing a Blockchain-based system of their own to sell to governments. Did they really think the idea would never be used by anybody but crypto-anarchists?
And I thought that under the crypto-anarchist ethos, people were free to seek profit in any means they saw fit. Does that somehow not apply to large companies?
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I'm hoping it will be a pleasant surprise. There is history of decent open software output from IBM, I'm sure sendmail "community" was pretty butthurt about Postfix too, as IBM simply took good protocol with horrible implementation and re-wrote the daemon from scratch and got it right.
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How long will it take IBM to find it won't work? (Score:4, Insightful)
Unless they've figured out blockchain trimming, and how to vastly increase the transaction rate to traffic ratio, the blockchain simply isn't viable.
There's a reason all those 3rd party Bitcoin intermediaries popped up for 'off-chain' transactions (that solve all of Bitcoin's problems by removing Bitcoin from the equation).
While there may be some Bitcoin enthusiasts at IBM, it won't take very long for the rest of the organization to figure out the technology doesn't scale, isn't efficient, and has a short practical lifespan.
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So true. If this takes off, I can see it as a way to achieve microtransactions, but if a few billion people suddenly start using it to send 1p to each other every time they read a newspaper article or whatnot, then I can see that blockchain becoming as large as all the computer storage in the entire world in short order.
It has to be trimmed in order to be practical, and I'm not sure how practical it would be without the blockchain. I wouldn't worry too much about the transaction speed, visa and mastercard h
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Off the chain transactions are not a bad thing. They do solve to a large degree the problem of dust transactions.
Sure, they are not "official" and rely on a third party that may or may not be trustworthy, but the thing is... at any time you have the option to withdraw them and thus commit them to the blockchain.
There will be scams and people will risk losing money but in the end, legitimate organizations will prevail.
Another thing is that other coins with different blockchains also exist. You can use those
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Only allow one sided transactions that create new tokens to be signed by the reserve bank's key. Partition transactions into separate chains based on transaction hash. Validate the "official" blockchain in large data centers. Offer API access to submit or verify transactions without fetching the entire chain.
It really shouldn't be difficult to design the basic software changes to the bitcoin client. Scaling across a data center might be a bit more work though.