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This should change the whole game soon
padington
Posts: 3,121 Forumite
... And it could be an enormous threat to London or at least the banking sector ...
http://www.telegraph.co.uk/business/2016/03/13/central-banks-beat-bitcoin-at-own-game-with-rival-supercurrency/
Not to forget the price of bit coins.
http://www.telegraph.co.uk/business/2016/03/13/central-banks-beat-bitcoin-at-own-game-with-rival-supercurrency/
Not to forget the price of bit coins.
Proudly voted remain. A global union of countries is the only way to commit global capital to the rule of law.
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Comments
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... And it could be an enormous threat to London or at least the banking sector ...
http://www.telegraph.co.uk/business/2016/03/13/central-banks-beat-bitcoin-at-own-game-with-rival-supercurrency/
Not to forget the price of bit coins.
Arrggghh!!!!!!It would erode the exorbitant privilege of commercial banks of creating money out of thin air under a fractional reserve financial system.
This does not happen. When I am ruler of the world there will be the death penalty for anyone using the phrase, "banks creating money out of thin air".
AEP. Dead man walking (when I rule the world).0 -
Arrggghh!!!!!!
This does not happen. When I am ruler of the world there will be the death penalty for anyone using the phrase, "banks creating money out of thin air".
AEP. Dead man walking (when I rule the world).
According to the banks of England it is ...
http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdfProudly voted remain. A global union of countries is the only way to commit global capital to the rule of law.0 -
I dont understand what he is on about, is he saying this tech will reduce the cost of sending and receiving money?
Its already free if you are a little MSE about it.0 -
I dont understand what he is on about, is he saying this tech will reduce the cost of sending and receiving money?
Its already free if you are a little MSE about it.
Think he's saying it essentially could cut out the retail banks full stop. A few lending alogorthyms would be left to determine what the customer could borrow.Proudly voted remain. A global union of countries is the only way to commit global capital to the rule of law.0 -
Think he's saying it essentially could cut out the retail banks full stop. A few lending alogorthyms would be left to determine what the customer could borrow.
how is that different from a bank using an algo to approve or decline a loan?
reading the article its not clear what the problem is that needs fixing and how the bitcoin technology alternative fixes it or improves it
The only thing I got from the article plus what I kind of know about the tech is that all transactions are visible? So you can literally follow an individual pound as it moves through the economy and various accounts. That would be a very powerful snooping tool and could have benefits in cutting the black market but im not sure that it offers that great a benefit. Any of the things it might catch will just move to other mediums of exchange.0 -
how is that different from a bank using an algo to approve or decline a loan?
reading the article its not clear what the problem is that needs fixing and how the bitcoin technology alternative fixes it or improves it
The only thing I got from the article plus what I kind of know about the tech is that all transactions are visible? So you can literally follow an individual pound as it moves through the economy and various accounts. That would be a very powerful snooping tool and could have benefits in cutting the black market but im not sure that it offers that great a benefit. Any of the things it might catch will just move to other mediums of exchange.
You wouldn't need banks, think how much of a cut they take out of the global economy. Just money mainlined into people's crypto accounts.
Could be terrible for London mind you.Proudly voted remain. A global union of countries is the only way to commit global capital to the rule of law.0 -
According to the banks of England it is ...
http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf
Where does it say that please?0 -
Where does it say that please?
Nowhere. Neither the word 'fractional' or the phrase 'thin air' appear in that document....AEP. Dead man walking (when I rule the world).
I'm with you on that one. When I'm in charge, anyone who even utters the words 'fractional reserve' will be shot. No ifs, no buts, no mucking about with a trial. Up against the nearest wall; two in the chest, one in the head; game over..... A few lending alogorthyms would be left to determine what the customer could borrow.
A few lending alogorthims eh? I thought it was the alogorthims in those dodgy CDOs that got us into this mess in the first place?0 -
Arrggghh!!!!!!It would erode the exorbitant privilege of commercial banks of creating money out of thin air under a fractional reserve financial system.
This does not happen. When I am ruler of the world there will be the death penalty for anyone using the phrase, "banks creating money out of thin air".
AEP. Dead man walking (when I rule the world).
To be fair, it's easy to see why people get confused, with the following direct quote from their document:Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.
This is a topic I actually don't know a lot about. I just tried to spend 5 minutes reading that document in my typical style, which is to skim over and see if I can spot the key points and understand it. I could not. I was pondering, how do we get inflation in a system where, if you get right down to the base of it skipping all fancy terminology and cruft, money isn't "created out of thin air". I tried to google but it appears there isn't a simple explanation for lazy people.
Can one of you just tell us who don't know, If all debts were settled completely tomorrow and everyone went to the banks to withdraw every GBP as notes (which in our hypothetical question would be made available), would this physical cash total be greater than the total if our hypothetical situation occurred 20 years ago? If so, where did the extra money come from? Does the central bank slowly print money?0 -
This is a topic I actually don't know a lot about. I just tried to spend 5 minutes reading that document in my typical style, which is to skim over and see if I can spot the key points and understand it. I could not. I was pondering, how do we get inflation in a system where, if you get right down to the base of it skipping all fancy terminology and cruft, money isn't "created out of thin air". I tried to google but it appears there isn't a simple explanation for lazy people.
Can one of you just tell us who don't know, If all debts were settled completely tomorrow and everyone went to the banks to withdraw every GBP as notes (which in our hypothetical question would be made available), would this physical cash total be greater than the total if our hypothetical situation occurred 20 years ago? If so, where did the extra money come from? Does the central bank slowly print money?
Physical cash is a tiny fraction of bank deposits and TBH is pretty meaningless in the C21st.
If you set up a new bank and everyone tried to withdraw their money physically or electronically to put it there then all the other banks would be bust. Banks only hold a small proportion of the deposits that people have hence the phrase fractional reserve banking.
The way it works is thusly.
A bank receives a deposit of £100. It has a reserve requirement of 10% so it needs to put £10 in its vaults (not literally but it's simpler to explain if we use the old ways) and can lend out £90.
That £90 is lent to someone to do up their house and is paid to a builder who puts it in his bank account.
That bank has £90 in new deposits and so can lend £81 to the builder who uses that money to buy a nice bottle of English not-Champagne........
And so it goes on. Ultimately (because maths) that £100 becomes almost £1,000. That is how money is created via fractional reserve banking.
If anyone says money is pulled out of thin air then they are either stupid or being disingenuous.0
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