Written by Guest Contributor for Bitcoin Financial.
The Bank of England boasted to have developed “their own Crypto currency”. The think they have found a good way of firing up a few nodes operating some blockchain-like network. Claims like these have been met with caution though.
Even from Forbes, there is far-going criticism of “RSCoin” with the magazine’s Tim Worstall pointing out that the requirements of payments processing and banking are quite different and that “RSCoin” has no use at all for the latter, http://www.forbes.com/sites/timworstall/2016/03/14/the-bank-of-englands-rscoin-would-be-useful-for-payments-but-not-banking/#63750357373f
Essentially, this means that our own initial view of “RSCoin”– published here, http://bitcoinfinancial.info/central-planners-rscoin-bank-england-now-laughing-stock-technology-experts-worldwide/ — is (strangely enough) shared beyond “just Technologists”, and the same views are held even in banking and the general Wall Street vicinity (albeit less polemic, maybe).
Worstall explains in Forbes that a payments system needs to be “fast, cheap, makes sure that the person the payment is flowing from actually has the resources to make payment, gets the payment to the right person, doesn’t allow double payments and records who ends up with the payment”. He observes that “Bitcoin has its attractions in this sense”.
Thus far, he is right, but it suddenly ends here.
He then claims that “RSCoin” looked even better than Bitcoin in these respects and then claims that “RSCoin” seemed to “scale up to the size and speed of the Paypal or Visa networks without too much effort”. The latter proves the overall ignorance of conventional “wisdom” when it comes to Bitcoin. Claiming PayPal, Visa, and now “RSCoin” to be effortless is a joke: credit card processors spend over 41% of their revenue on “fraud prevention”, including stolen cards, forgery, fraudulent cancellations and refund requests, and much more.
The only valid point that can be raised against Bitcoin is its relatively slow network and limited transaction volume per second and limitation to a total of 21 million bitcoins, along with the infamous 51%-attack problem.
All these issues have long been addressed, and solved, though by people who are far more competent than your average central banker cashing in top salaries every month. There are Alternative coins that have different parameters and even different methods of securing their block indeces, like proof-of-stake and other variants, resulting in both faster transactions and an elimination of the risk of 51% attacks as known in proof-or-work blockchain systems.
Whether or not Bitcoin-the-coin succeeds in the end or will one day stop working does not really matter because Bitcoin-the-idea can always been improved and re-deployed. There are literally hundreds of Alternative cryptocoins. New coins can be set up literally in a matter of hours.
By comparison, BoE officials have said that the “expect” their “RSCoin” to be “ready within 18 months”.
This is further proof of Wall Street and banks in general, let alone governments, still not getting it: they still fail to understand the true implications of Bitcoin (which is a good thing) and are trying to build Bitcoin-clones in cloudcookooland. We wish them a lot of fun doing so.
Trouble is, they’re blowing taxpayers’ money in the process.