The advantage of virtual currency is not that it is an electronic currency. Today, the dollar, the euro, the yen, and the yuan are all electronic currencies.
Rather, its advantage is that blockchain technology provides a self-contained alternative to traditional payment and remittance systems. It's as if all Bitcoin users are paying at the same bank. Initially, cryptocurrencies were not regulated, so there was no need to go through any regulatory process to start as a bank equivalent.
The problem is that when using virtual currencies such as Bitcoin, users have to deal with other currencies, exchange rates, and any uncertainties of value associated therewith, which in turn leads to concerns about the value preservation function of currency. It is. This inevitably reduces the appeal of start-ups like Circle and Ripple.
Technology linked with the bitcoin
That's why the companies are looking for ways to step back from cryptocurrencies and apply the technology to traditional currencies to connect directly to banks and central banks.
So, if people want to integrate payment systems, do there need to be multiple intermediaries? Instead, why not just send payments through a central banking function? If everyone has an account at a central bank and they are connected across borders, a centralized ledger for the economy as a whole should be created. It can certainly improve the speed, security, and efficiency of payments. You must be aware of all bitcoin features if you are willing to start bitcoin trading.
The banking system and bitcoin
Several central banks are exploring this idea, but at the moment conclude that the risks to the financial system are so great that the benefits are uncertain. But if that happens, the financial system will change.
Banks are not involved, and there is no single issuer as we did earlier, so when it goes down, the Bitcoin network is built up by more than 10,000 nodes. Then, another point is that the Bitcoin mechanism itself survived despite the collapse of Mount Gox. He thinks these two points are very important.
This is because Japan has a very common misunderstanding about this point. They often say, but let's say you travel to the US and take some dollars.
As said at the beginning of the presentation, the most notable thing about Bitcoin technology is that it has no operator. Therefore, in that sense, it is different from conventional currencies and electronic money.
So this problem must be solved by a completely new technology called blockchain technology. This is a problem traditionally called the Byzantine General Problem in the field of computer science.
In other words, in a decentralized network, untrusted subjects and people operate, and as a whole, it works well. Whether such a system is possible is a long-standing problem of computer science, and until now it was thought that there was no solution to that problem.
Bitcoin is the first solution to that problem. In that sense, it's a huge breakthrough in computer science. He thinks it is very important to recognize that first.
Right. For Bitcoin to become widespread, the banking system must be manageable. You think it's the most appropriate because banks are trusted by consumers. They have to be able to handle Bitcoin
The appearance of the outlaws, who left their hometown and headed west to make a fortune. Soon, however, too many people dreamed of getting a lot of money, and money was not easily available. Mining operations were resource-intensive and required water to blow the mounds away. In other words, the scale has expanded so that only a few people can install pipes and water conduits.
The key was to be "open." Bitcoin wasn't that valuable at the time, but it could be a boon to anyone. The underlying technology blockchain seemed to secure it by eliminating the need for intermediaries. The platform would have maintained our independence and decentralization.
In turn, Bitcoin has become a financial product. Together with the pension fund, it became an investment target of banks. The Commodity Futures Trading Commission (CFTC) in the United States has defined Bitcoin as a commodity, just like gold.