University Researcher Says Bitcoin Can’t ‘Grow Up’

University Researcher Says Bitcoin Can’t ‘Grow Up’

By jamieredman -
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The Bank of England and a group of computer scientists say they have created a centralized cryptocurrency intended to have the very opposite philosophical aspects of Bitcoin. The “proto-currency” known as RSCoin will be controlled entirely by state officials, but claims that it will also curb the problems with fractional reserve banking. Dr. George Danezis is designing the digital token at the University College London and believes many incumbents will be disrupted.  

Also read: Bitcoin’s Cosmic Threat: Beware the Magnetic Field 

Dr. Danezis tells the TelegraphUK:

“Whoever reacts too slowly to these developments is going to take it on the chin.— They will lose their businesses Deep in the markets there are dark pools buying and selling shares, and entities that facilitate that foreign exchange. There are Visa, Master, and PayPal. These are the sorts of guys that we are going to disrupt.”

University College London: ‘Bitcoin is a Peter Pan System’

Bank of EnglandThe project started last year when the Bank of England began researching the implications of cryptocurrencies and blockchain technology. At first, the central bank thought of Bitcoin as a threat but soon realized they could extract the technology and modify it in a centralized way. The university then took its findings to the System Security Symposium (NDSS) in San Diego. Dr. Danezis believes the pilot could be launched within 18 months.

Ben Broadbent, the Bank of England’s Deputy Governor, gave a speech at the London School of Economics explaining his position on blockchain technology. The Governor sees potential in digital ledgers but it’s more likely in his opinion that a centralized version will succeed. Broadbent feels a central bank-issued digital currency could allow many individuals access to a bank account and could even remove the need for commercial finance firms. Broadbent and other central bankers take issue with Bitcoin’s permissionless blockchain and also its scalability. The University College of London believes RSCoin will address this problem stating in their research paper:  

“We present RSCoin, a cryptocurrency framework that decouples the generation of the monetary supply from the maintenance of the transaction ledger. Our design decisions were largely motivated by the desire to create a more scalable cryptocurrency, but were also inspired by the research agenda of the Bank of England.”

UniversityThe University believes its RSCoin can be safer to use, faster, and will be less volatile with central banking. The researchers agree blockchain technology will still cut costs by eliminating the need for individual middlemen and also scale easily with its growing user base. They think that because RSCoin will be centralized it will ensure a trust factor between customers and banking officials. The currency will not be very much different than its digital fiat counterparts, but with blockchain technology, it will give a better sense of confidence to citizens. Dr. Danezis agrees that a centralized token would be a superior method in contrast to the current Bitcoin protocol. He believes the free market digital currency is a childish version of libertarian ideals and also has technical deficiencies. Dr. Danezis tells the Telegraph publication, “(Bitcoin) is a Peter Pan system, and it doesn’t really grow up.”

What do you think about RSCoin? Let us know in the comments below!

Images courtesy of Shutterstock & Pixbay

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  • Unknowxn Facexbook

    bitcoin could grow up but the developers may not – our assessment remains that the lunatics have taken over the asylum.

  • Russell Spears

    “RSCoin’s ledger is solely in the hands of the central bank, which would also retain a special encryption key that could be used to control the money supply—for example, to take actions like the quantitative easing programs the Federal Reserve and other central banks put in place after the 2008 financial crisis.”

    QE all day, every day…. sounds like a winner for wage earners, I can hear them lining up right now, for the fisting and fistulas…..

    With each economic crisis and fiat crash, you’re going to see Bitcoin continue to be adopted: not because it is perfect, or that there is not some better cryptocurrency available…. that doesn’t matter, because Bitcoin was the first mover and it has billions of dollars of market capitalization and hundreds of Millions in Investments.

    the best thing about Bitcoin is that it is malleable and adaptable and we already have the network effect.

    I don’t want anyone controlling my currency, and soon we will be able to have full control using Bitcoin, not fedcoin or citicoin. ..
    The bankers reputation has yet to be further tarnished we will head into another crisis people aren’t considering what that will mean on the tail of the last 2008 there’s simply going to be no confidence in anything that they do
    There’s no easier way of swiping value than quantitative easing and if my math is right, we’re on number 4 already and then we are committed to number QE5.

    that won’t happen under Bitcoin..

  • JRocBaby

    Well while central banks are busy tarting themselves up in order to try and get people to trust their new centralized currency, anyone with half a brain will continue to transact peer to peer using the trustless ledgers currently being built, including Bitcoin. Why would anyone with any modicum of intelligence trust a central bank with all their history of screwing people over by devaluing and bailing out fraudsters en masse with public money? What, we’re supposed to believe they can suddenly now be trusted, all of a sudden, just because they’ve gone and pinched a super new technology and turned it into a form which suits them? Give me a break!

    They are patently running scared, they see the writing is on the wall for them and they are hurriedly scrambling to save their asses because they can see a financial tsunami rushing towards them that’s going to royally fvkk them. Good luck trying to sell your state money to the masses you dummies. You don’t have a cat in hell’s chance and you know it.