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Please click the link to listen to the eleventh episode of my weekly crypto podcast ‘Two Minute Crypto‘. These are intended to be short, single-topic ramblings on some aspect of the cryptosphere. Comments and critiques welcome.

https://soundcloud.com/gordon-buckley-272399028/two-minute-crypto-wild-thoughts-1

 

Transcript

Two Minute Crypto – Wild Thoughts

Today I’d like to introduce the first of my ‘Wild Thoughts’ Series where I take a flight of fancy somewhere through the cryptoverse be it past present or future. For today’s episode, I’d like to contend that it will, in fact, be governments which unintentionally usher in widespread crypto adoption. It is my belief that in the next few years a number of large economy nations will introduce centralized state-controlled cryptocurrencies. They will do so for a number of compelling reasons, including lower cost, increased transparency for taxation, and extended control over economic activity.

State Crypto is the surveillance states best friend, it will allow already invasive tracking of the actions of citizens to be taken to a whole new level. The government will know how, what, where and when you spend your money. They will likely even try to code these state cryptos to be limited in exchange, so yes you may be able to exchange your Japanese Crypto Yen for US dollars but no you won’t be able to perform an atomic swap for non-state sanctioned cryptos. But here lies the opportunity, state crypto will suffer from the same ills of fiat, there will be no limit, more will always be made available and just like fiat they will not hold their value.

However, the citizens of these crypto nations will have already become used to using crypto through state-backed issue, making it a small step indeed to move into Bitcoin, Stellar, Nano and other decentralized currencies. State cryptos will simply be exchanged for some other fiat and then moved into crypto.

Perhaps at first, most people will accept the state narrative that this is simply new better money and one in step with the efficiencies offered by blockchain. The transparency of the currency will be highlighted, as will the minimal cost of production and issue. However, as it becomes increasingly clear that state-issued cryptocurrencies both enslave and fail to retain value – a tide of now comfortable users will make their way to decentralized systems and all thanks to the efforts of their governments to co-opt crypto and blockchain.

What do you think, a wild thought or is there perhaps something to it?

Thanks for listening.

 

*This hit the wires just after I finished recording: Russia’s Duma considering state backed stablecoin:

https://cryptovest.com/news/russia-may-issue-ruble-backed-stablecoin/

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Responses

    1. CryptosDecrypted Post author

      They would be immensely beneficial because of the stark comparison and unintentional legitimization (to the whole concept and use case) they would offer. Perhaps at first, decentralized cryptos might find themselves somewhat pushed to the margin but imo not for long.

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  1. Workin2005

    Insightful podcast @cryptosdecrypted. I agree completely. Centralized currency (crypto or not) will lead to disaster due to tracking (lack of privacy) and mismanagement. Government has no incentive to spend wisely. This always causes massive waist and corruption. As you point out, people will eventually flock to decentralized cryptocurrencies. Nations that try to stop it will be left behind. Excellent work.

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  2. Nicholas

    Dunno. The states and crypto, two opposite things.
    The crypto is one of our powerful assets, against the states and parasites.

    If someone hear this, governemn crypto, may to know, huge step for adoption. But no, is not adoption, its the worst idea since the… something, what was the worst idea in the history 🙂

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  3. Infosion

    If you think about it that unfortunately makes a lot of sense. Like you said, that would just shift the problem about the ability to control the amount of these coins of someone like the government.
    Nice thoughts, thanks for sharing this!

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  4. miti

    I was thinking something similar a few days ago. Actually State cryptos will suffer from the same ills of fiat because the underlying problem remains, the need for the State to control the money supply which is in contrast to the basic principle governing cryptos.

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