Jan 11, 2023
Where do I even start with this one? Welcome to my post about CBDCs also known as Central Bank Digital Currencies. I plan on talking about the cons of CBDC's and the pros?
Let's start with the good... CBDCs will move the cash based system to being 100% digital just like using your bank account but for everything. This could be a con for some but digital in my opinion is better as it can't be lost and you can hold large amounts easily on your person (and yes I understand bitcoin is better as you actually own your assets etc I'm getting to it...). You may have also heard that a CBDC will be a safer version of cryptocurrencies since the government in charge this can also be a pro depending how you look at it. I will debunk that theory later on as well. Other than that not much good those 2 good points aren't even really that good as you will soon find out.
Now let's get into the thick of it I'm going to add a Table of contents below here to make the points clear and easy to read without needing to read every section incase your pressed on time.
CBDC or Central Bank Digital Currency is a digital or virtual cash that is based on an electronic record similar to thank of a database. It is managed by the country issuing it through the Central Bank instead of through the private banks. A CBDC is not a blockchain even though you may think it is as its a digital currency. A blockchain is a publically accessible database in simple terms it to does not mean it is decentralized because its a blockchain. A database will always be faster than any implementation of a blockchain as you have central control and don't need to have any consensus mechanisms like Proof of Work (PoW), Proof of Stake (PoS), Delegated Proof of Stake (DPoS), etc. A CBDC uses this model similar to how your current bank keeps track of transactions.
With a centralized ledger Central Banks will have the power to see all of your transactions, this is small privacy issue due to the fact that they can already demand records from your bank and even see your transactions in things like crypto currency due to it's public ledger. The only way to avoid that would be to use Monero (XMR) or some similar privacy coin or try Litecoin with the Mimble Wimble function and to use address that aren't linked backed to your I.D. through any transactions.
The concern is mainly that the Central Bank controls the currency and allows you to spend it so for example if they don't like your views on something or you aren't following the rules (Will talk more about in the CCP Section) they could just ban that address/account and prevent your funds from moving. Before you say to yourself that's just some crazy conspiracy that would never happen to me good for you your a model citizen but it does happen I will get into more throughout this post but here's an example.
Here is just an example it doesn't matter if you agree with the protest or not, the point remains that the government will go after the money you need to survive if they do not like you or your views. Now you might be saying well look they blocked crypto transactions to and yes your correct I will lightly touch on this here and may dedicate an entire post later on it, however this is because they are using a crypto exchange to hold these coins on. So basically a short summary of how an exchange works is that they hold all the funds in 1 wallet sometimes a few more but mostly 1 wallet called a cold storage wallet in most cases. When you sign up and they give you an address to receive crypto with for different coins right every network has separate addresses. The problem is that you don't have the private key to those addresses think of it like having the username to login but not the password. At the end of the day the money is not yours and when you move the funds it's not your either if you trade say ETH for BTC on an exchange nothing changes on the blockchain all that happens is they say ok X person sold BTC minus that in the database from their account and Y now has the ETH add it to theirs. The money doesn't move at all it remains in the cold storage account sometimes when you deposit coins like ETH to the exchange and don't move them they will remain in the address listed this doesn't matter though as again you don't have the private key to move them yourself. This is why exchanges are cheaper to transact on than the blockchain itself because nothing is moving the fee they charge you is for themselves it's just a database entry, so if the government says block withdraws on that account that's simple as they own your account. This includes Bitcoin if you own it on an exchange you don't own anything the exchange does the only real way to own Crypto is to download the wallet directly to your PC like Bitcoin Core or to use a hardware wallet like a Ledger or Tezor.
Now yes the last point did touch on this point as well a little bit however there are more issues to discuss. The government still retains the control of the monetary system meaning they can constantly keep adding new money into the system so they can retain control anytime people get close to making money to make change they can inflate you back down to nothing. To think the government would "reset" the economy and start over is a very stupid idea they are interested in retaining their power not giving people more funds to speak out. A poor society is an obedient society. Why? because you have no money to fight back you will starve to death if you don't follow the rules (again ties to CCP section coming up).
They openly want to control these financial markets because they know this already. There is an old quote which may or may not be true but it is said in 2 different ways the first being "Let us control the money of a nation, and we care not who makes its laws" and the second being "Give me control of a nation's money and I care not who makes it's laws" — Mayer Amschel Bauer Rothschild. True or not the point is fairly accurate maybe you believe it's a conspiracy that's fine. But those who control the money supply at the end of the day control the people. The elite of the world already know this and that's why they like things like Ethereum and Cardano because they uses PoS and DPoS masked as PoS in Cardano's case which basically allows the one with the most tokens to control the network. Well I wonder who can afford the most tokens? That's right... They dislike things like Bitcoin because it's harder to control. You could argue sure they can buy all the miners in the world and then block transactions. Now there are many possibilities we can go from here the most obvious being we can hard fork and even change the mining algorithm but let's just say we don't and say the fed pushes a new update to Bitcoin cause they have consensus now and control the vote well all the disagreeing nodes and miners would automatically be hardforked and in the eyes of the people that would the real BTC even if it's not called BTC. So making changes to the network very tough to do so much so that since launch in 2009 there has only been 23 major revisions as the current node is on Bitcoin Core 23.1. The next thing is that hardware capability increases drastically year over year this means people and companies are buying faster miners and need less of them to catchup to the fed or whoever's hashrate. This means the fed needs to collect massive amounts of tax from the people to keep attacking the network which just doesn't make sense. They would be at the mercy of the people rioting or stop paying tax as a way to take back the network. It doesn't make sense for them to do that when they can have a PoS system or their own coins/tokens.
Ethereum already has tokens that have been blocked on certain addresses as a global effort, basically collusion between all the dapps. You can find a list of that below.
822 Addresses banned from even moving said USDT token at the time of writing, but not only that dapps like Uniswap have also blocked such addresses.
I don't know if any of you were around when ETH Launched back in 2014 but I remember the slogan being "Code is Law" now besides the other crap lies that I can get into in another post of why Ethereum is centralized this doesn't look like Code is Law to me...
This is a stupid thing non-coiners (people not into crypto) say, that these coins are to volatile to become currency. Well your incorrect and I'm going to explain why.
How do we look at the current system? If I say I have 5$ what do you think of? 5$ right? So when we think of Bitcoin for example why do we think of value in dollars? I mean 1 BTC = 1 BTC right it's only when we compare it to something else that we say it's volatile right? So then it goes without saying we should also compare the dollar to something like stocks that get more expensive every year are we really making money or is most of the "gains" just inflation? Lets compare the dollar to other assets then and see how it stacks up vs something like Bitcoin then shall we.
Please watch just 5 minutes of this video literally it saves me a lot of retyping what has already been said here and lots of space not needing to fill this post with tons of images. Basically it shows charts comparing the dollar (fed balance sheet) to real estate, stock market and gold. If you don;t understand the federal balance sheet a basic overview when the fed balance sheet grows in size they are pumping money into the economy in a way by stimulating it. When they sell off assets they are adding risk of downturn as those assets need to get resold to someone else. The fed has unlimited money to spend on this and can choose how much to spend at anytime... It's a scam system really to keep this garbage paper "worth" something.
If you look at Bitcoin you can see it's beaten every asset class meaning if you held Bitcoin you can buy more with that then you could a few years ago... but of course you probably knew that just based on the fiat (dollar, euro, etc) price of Bitcoin. In a way the dollar isn't volatile you would be correct if you made that assumption it's rather predictable it will always be worth less and less over time as is the history with every single government issued currency since man kind and you know what? They all end the same way dead.
In case your some anti crypto person here's a nice read for you every currency has failed even bitcoin will fail at some point hopefully in future generations when they no longer understand the meaning of free money rather than now. Bitcoin is volatile because it's treated as an asset people sell and trade it if it fully replaced the dollar it would be much stronger due to the lack of inflation. I won't get into this here but if you don't think a deflationary economy is a good thing or would work I would suggest reading the book The Price of Tomorrow by Jeff Booth. So a CBDC being not volatile is really up to you to decide In my opinion it's just a never ending downward trend even if it goes up in the short term doesn't matter the purchasing power long term will always be less.
While irrelevant I just want to talk about failed crypto currencies cause I know someone out there is going to think they are smart and think that all the cryptos failed proves it's a scam or something. Here is a link for others to see an estimate of failed currencies be that rug pulls (where founders run with the money) or just no more activity (like people won't buy the coins you want to sell).
Most cryptos are scams I am talking about bitcoin which isn't a scam if you actually look into it I may do a post on this in the future. Any project that has a road map has a centralized group of developers than control what code is pushed to nodes. For example look up ETH Merge to PoS. There was no vote you upgrade your node or it won't work anymore if you want to fork to say ETH Proof of Work you have to change versions. On Bitcoin anyone can post code to Bitcoin Core and even make there own version of the node like Bitcoin XT and those failed forks become their own coins people vote in Bitcoin by upgrading to that new version on their node. Nobody upgrades reset that change and push another one. This is how changes like Segwit and Taproot were made. This is again another large topic where companies wanted larger blocks where Segwit removes witness information in transactions allowing more to fit within the same block size. Either change could have been pushed at the time but Segwit won majority and the "big blockers" moved to the Bitcoin Cash fork.
Anyways the point I was trying to make is that most of these ICOs and coins and tokens especially running on something like Ethereum or another smart contract platform are just fast scams it's up to people to do their own research before buying things, sadly they make the whole space look bad while they try to make a quick buck like most people buying crypto. The people buying these coins are sadly those most vulnerable, look at people who play the lottery they are mostly in lower income brackets willing to risk money to strike it rich these coins are no different. It sucks but more teaching needs to be done in this space to prevent people from even buying these things. We live in such a social media hyped up world everything in the newest trend etc. So people see all these others buying so why not them. There's a good meme video on this exact thing I will link below but I just want to say Bitcoin is not the same as these Cryptos.
With a CBDC it's the same as having money in the bank it's not yours. Here's a good clip from the show Years and Years.
The money isn't covered that insurance all the banks tell you up to whatever 100k is only there in certain cases not if they scam you and shut down. CBDCs are no different the government can take it from you if they want, freeze your funds as they own the network.
What a topic this is... No offense to Chinese people I just dislike your government to first understand what I am talking about you need to see for yourself the "social credit" system and how it works in China. I would advise watching the short video provided below.
If you do things they don't like your score drops and when it drops you lose access to bank accounts, jobs, travel etc. They don't even let you leave so what happens to those 1M+ on the blacklist (probably more now that video is from 2020). But you may think it will never happen here right?
What is this Digital I.D. program we don't know yet but it's in the works USA also has the Real I.D. program which is going to be required to fly domestically within the states in 2025. The difference being you can't use your Driver's License for example because it's a State level I.D. and you will need a Federal Real I.D. to board planes because they are Federal regulated. But Canada wants a digital one what will this mean we don't know yet but it's clear that all governments are pushing for more and more control even if these are minor things to you.
Honestly look at China look at that video and think about it if you don't follow all the rules and be a model citizen they have the power to own you literally. I can't find the exact video right now but there is a video on youtube of a guy J-walking and about 15-30 seconds later he gets a notification not to just let him know about the fine but to also let him know they already took the money automatically out of his bank account. This is what a CBDC can do.
Not just that look at how they block you from doing things like getting a job or paying rent they can lock your whole account and yes they can do that in the current privatized system with more paperwork, but in a Central Bank system no need they have control themselves to do it. What happens to these people on the blacklist? they can't even work or rent a place the government is forcing them to be homeless and basically steal and keep their score lower to survive then what they go to jail as a criminal or die of starvation, the government is indirectly killing people off they don't like. This is very scary China has a government run bank system and this is just 1 factor that allows them to do this. But hey you know if your that model citizen nothing to fear for you right? Just like computer privacy you got nothing to hide right? Such a stupid statement back in the 80s we were concerned about this stuff but now its common why is that? Because we grow up around it and get used to it think for example the next generation growing up around social media will they even listen to any news or get all information from their feed? They will become literally walking zombies who talk about the latest trends and agree with whatever is shown on their feed, why? Because firstly peer pressure on social media, and secondly it's the new thing being hyped up. No offense to Ukraine either but I'm going to use it as an example here most people don't even know where this country is or who is around it let alone even a portion of the history. But they do know the media told them Russia is bad and that we should be anti-russian. Don't believe me?
We are literally cutting people off of their lively income because of something happening indirectly that they have no control over is happening. I'm not siding with Russia or Ukraine I think both sides are at fault (NATO mainly), but this shouldn't be promoted people wanted these sanctions not to long ago it was hyped on social media McDonald's and Starbucks closing locations removing people from these jobs. It's inhumane we are taking away people's lively hood for something they can't change, and it's supported because of hype of social media don't want to be left out.
Anyways that is off topic the point is that with a CBDC things can get out of control very quickly and start looking like China's CCP. Even if you are a good person and don't break the rules it shouldn't matter because others will be greatly affected and potentially killed off in such a situation we need to avoid that by opting out and choosing something like Bitcoin. There is no standing still sticking with the current system, change is coming we either move backward on the freedom scale or move forward the choice is up to us. For those that think just them opting out isn't enough my final link for you will be and article about Nigeria opting out of their CBDC for Bitcoin.