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Bitcoin (BTC) and CBDC on the agenda of the EU and the World Economic Forum

The President of the ECB has once again paid for bitcoin (BTC) while promoting what promises to be the worst currency of all time: the CBDC. From the World Economic Forum to the European Commission, everyone is talking about it.

“Bitcoin is not based on anything, unlike the digital euro”…

Last year, the European Commission launched a popular consultation on the digital euro. The consultation ended with a record participation rate (47% for the Germans, 15% for the Italians and 11% for the French) and a clear mandate in favor of maximum privacy protection.

Problem: it is obviously impossible to make anonymous digital payments without an anonymous account.

The European Commission knows this. For European Commissioner Paolo Gentiloni in charge of economic and monetary affairs, “a completely anonymous digital euro is not desirable”.

Irish Finance Minister Paschal Donohoe, who chairs the Eurogroup, told him last month that he would “Maybe possible to allow more privacy for small transactions”.

” More “ of confidentiality… A transaction is anonymous or it is not. There is no in-between.

It is possible to carry out anonymous transactions in BTC precisely because the wallets private are anonymous. But it goes without saying that the ECB will never authorize hypothetical anonymous CBDC accounts.

Quite the contrary. Anonymity is one of the reasons the powerful hate bitcoin. Christine Lagarde has also recently worried about people who do not “do not understand the risks and who will lose everything”. “My humble opinion is that it is worth nothing (bitcoin), that it is not based on anything”. “The day we have the digital euro, the central bank will be behind it, and I think that’s very different”.

Lies… Bitcoin is all about energy, democracy and scarcity. Conversely, the euro is created indefinitely, ex nihilo. It is also overseen by a woman convicted by the Court of Justice of the Republic…

Watch Christine Lagarde being interviewed on the Dutch TV show ‘College Tour’ about cryptocurrencies and the expansion of the ECB’s balance sheet.
How are you going to bring it back down? “
“He will come down. “
“But do you sleep at night when you see this? “

What will the CBDC look like?

Will the CBDC have a fixed money supply? If created on the model of bitcoin, what assures us that this promise will never be broken?

Will the CBDC replace money created by private banks? Will these eventually disappear? Otherwise, will we be able to exchange our BNP Paribas euros for CBDC without any limit?

Will it be programmable? And then basically, why a CBDC?

These are all questions that the European Commission has tried to answer in the report “Digital Euro: policy implications and perspectives“, published at the beginning of the year. A report containing all the same six times the word bitcoin…

In particular, the committee concedes that “currency has entered an era of competition”and that the stablecoins will introduce competition between currencies both outside and inside borders”.

Funny enough to be underlined, the authors of the paper recognize that bitcoin is a technological breakthrough: “Bitcoin is very innovative in its consensus method.” “It is also very safe […]but the price to pay is very low transaction throughput”is it however written. “Bitcoin is hardly scalable and turns out to be extremely power-hungry. “

A little more research and the Brussels technocrats will understand that the “very low transaction throughput” is not a bug, but that it is essential to its decentralization.

Bitcoin can handle millions of transactions per second through the Lightning Network:

“The #LightningNetwork has a theoretical throughput of 40 million transactions per second. This is the equivalent of a 14.4 TB block every 10 minutes. Lightning allows Bitcoin to be a decentralized means of payment on a planetary scale. “

Hence the uselessness of altcoins which have been able to attract the customer by the promise of a high transaction rate by sacrificing decentralization which is obviously crucial.

In addition, note that the bitcoin protocol is extremely scalable (SegWit, Taproot, etc.).

The energy consumption of bitcoin is also a false debate. Nearly 60% of the energy used by BTC miners comes from renewable sources. Miners need cheap energy and this reality ensures that they will all end up consuming surplus energy that would otherwise be wasted.

A CBDC instead of cash

Very interestingly, we learn that the primary motivation behind the CBDC is to anticipate the end of cash: “If cash were to disappear, the general public would no longer have access to central bank money.” “The main reason for developing a digital euro is therefore to preserve the role of public money. “

In other words, the powerful have the ambition to make cash disappear. Christine Lagarde smokes us up when she claims not to want to end it. She will tell us one fine day: “You misunderstood me, the CBDC IS cash”…

By the way, bitcoin was never meant to replace cash. Its raison d’etre is tied to its finite money supply of 21 million BTC. None ” bailout is not provided for in its protocol…

Another question posed in the introduction is whether “the technology would allow the central bank to directly open accounts for hundreds of millions of citizens of the euro zone”?

This question suggests that the central bank could in the future act as a universal bank replacing all private banks. Like Gosbank in the days of the USSR…

This is not a far-fetched scenario. The debt/world war/peak oil cocktail does indeed have a good chance of triggering a hyperinflationary Great Reset. That is to say inflation of between 50% and 100% over one year.

Faced with bank failures, central banks would have free rein to create a programmable CBDC. We could imagine that the amounts lent are automatically decided according to the social credit of each other…

The Commission thinks that “among all the payment service providers, the central bank is the only one who has no interest in exploiting personal data for profit”…

As for whether the CBDC will be programmable, here is one of the thoughts shared in this report:

“Programming can directly affect the nature and therefore the value of money. For example, currency can be issued with an expiration date beyond which it is no longer valid, as is done in Hangzhou, China. It can be limited to a particular use, such as food stamps. Paying social benefits in a currency with an expiry date would ensure that they are spent and not hoarded […]. In theory, governments with autocratic or moralistic tendencies could limit the use of these social aids by for example prohibiting the purchase of alcohol or leisure items, which would bring them closer to food stamps. The possibilities are almost endless. “

That being said, some good questions arise: “But what is the value of a currency with an expiration date or a limited use”? “Will it be redeemed as a discount? “

In a lucid way, we can also read: “In reality, programmable money is an oxymoron.” “Strictly speaking, it’s not money. “

CBDC Risks

It is likely that the general public will prefer to hold CBDCs rather than private currency. Indeed, a lambda bank can go bankrupt unlike the ECB.

“There is no doubt that completely safe and liquid currency is an extremely attractive store of value, especially if offered in unlimited quantities”is it written. “Depending on its design, a significant portion of deposits could move to the CBDC. “

Without going into the details of the fractional reserve system, the risk is that private banks no longer have enough reserve money to operate normally. Furthermore, the ” bank runwould become easier since all you have to do is click somewhere on your app to exchange your BNP or Crédit Agricole euros for CBDC.

This is one of the problems that was raised during the first day of the World Economic Forum by Kristalina Georgieva, the president of the IMF, and François Villeroy de Galhau, the governor of the Banque de France who hammered home that the bitcoin“is not a currency”:

“Kristalina Georgieva delves into the deeper technical issues of central bank digital currencies. “

As a result, the thinkers working on the CBDC gas plant envision it being flanked by an interest rate, positive or negative:

“Unlike cash, it would technically be possible to impose an interest rate on a CBDC. Many economists believe that this would increase the effectiveness of monetary policy, in particular via a negative interest rate. “

Indeed, after printing trillions and stealing people’s savings through inflation, the excess money will have to be drained to avoid the risk of hyperinflation. Hence the idea of ​​the negative rate…

This nice plan, however, is falling apart now that we have bitcoin, which is undoubtedly the most advanced form of money known to mankind. Bitcoin is the escape fromGreat Resethyperinflationary.Hold!

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Source: Cointribune

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