pbrusky started following April 24, 2016 pbrusky started following April 24, 2016 LoverBitcoin liked a post in a topic: - new Faucet Game - high earning potential [BTC] February 2, 2016Updated Photo: "It's banking without banks, and money without money."Related Story: Bitcoin explained: the digital currency making millionaires Audio: Blockchain: the biggest thing since the internet?Map: Australia Banks are trialling it.The ASX is investing in it.Politicians have talked it up.You may not have heard of it, but earlier this month representatives from the worlds of politics and finance (including a member of European Parliament and the US Justice Department's digital currency coordinator) met on Richard Branson's private island in the British Virgin Islands to discuss its revolutionary potential.Blockchain.It's the technology that bitcoin uses to facilitate transactions.Whether or not bitcoin ultimately succeeds as a currency, there's a lot of excitement that the architecture underpinning it could completely transform the way we do banking, cyber security and even democracy.Blockchain was invented at the same time as bitcoin — in 2008 by the mysterious Satoshi Nakamoto, who may or may not be Australian.It's basically the register of all bitcoin transactions, like a bank ledger.

External Link: When you make a transaction using traditional money, bank ledgers are updated to reflect where the money has come from and where it's gone.Similarly, when you spend a bitcoin (or a fraction of one), the blockchain is updated to reflect this.But there are a few innovations that differentiate the blockchain.To prevent abuse of the system, all bitcoin transactions need to be confirmed by the peer-to-peer bitcoin network before they can go ahead; and once a transaction has been verified, through a secure cryptographic process, it's added to the blockchain in a process that can't be reversed.What's more, there's only one blockchain, and it's public — meaning every transaction ever made is visible to everyone.So, no double-spending, no need for a bank to act as a middleman on transactions, and it's all transparent.Financial commentator John Lanchester, writing for the London Review of Books, says blockchain technology could change just about everything when it comes to money:A decentralised, anonymous, self-verifying and completely reliable register of this sort is the biggest potential change to the money system since the Medici.

It's banking without banks, and money without money.It's this idea of "banking without banks" that has naturally got the interest of … banks.That's the great irony.Bitcoin found a way to eliminate the role of banks in transactions.But now these same banks want to use blockchain technology to beef up security and make their processes more efficient.The Commonwealth Bank is one of dozens around the world currently experimenting with the technology via the firm R3.Late last year, the bank's chief information officer David Whiteing said:Blockchain has the potential to transform banking in the way that the internet transformed how we buy music and watch movies.Reserve Bank governor Glenn Stevens is watching the blockchain project with interest, telling the Australian Financial Review that he thinks it's "the really clever bit" of bitcoin.The shadow minister for financial services, Jim Chalmers, is also on board, saying:There's little doubt that blockchain will have huge implications for the way we transact in the digital economy.The potential doesn't end with banking, either: it's been suggested that blockchain could be used for collecting taxes, issuing passports, registering land, and selling shares (the ASX is already an investor in blockchain).Some enthusiasts think blockchain could even be a game changer when it comes to elections.The dilemma for online voting has always been this: how do you protect the privacy of individual voters while also ensuring (and proving) that the overall outcome is correct?Developers and entrepreneurs — including a start-up from Perth — are looking to blockchain to help find a solution.But Dr Vanessa Teague, an expert in this field from the University of Melbourne, says we shouldn't count on them having any success.Firstly, she points out that blockchain isn't invulnerable from attack.litecoin naar euro

That's because the integrity of blockchain is contingent on the computational power behind it being distributed.So if you had enough computational power, you could alter the results.Dr Teague says that's a big problem:Think about the financial resources devoted to winning even an Australian election.bitcoin acid testAre you really sure that similar resources couldn't upset the blockchain ledger?So while you can expect to see blockchain technology used at your bank, it looks like it's not about to replace the ballot box.ethereum credit cardComputer scientists have devised a digital crypto-currency in league with the Bank of England that could pose a devastating threat to large tranches of the financial industry, and profoundly change the management of monetary policy.bitcoin m3

The proto-currency known as RSCoin has vastly greater scope than Bitcoin, used for peer-to-peer transactions by libertarians across the world, and beyond the control of any political authority.The purpose would be turned upside down.RSCoin would be a tool of state control, allowing the central bank to keep a tight grip on the money supply and respond to crises.bitcoin universal currencyIt would erode the exorbitant privilege of commercial banks of creating money out of thin air under a fractional reserve financial system.sell bitcoin for dogecoin“Whoever reacts too slowly to these developments is going to take it on the chin.bitcoin new york attorney generalThey will lose their businesses,” said Dr George Danezis, who is working on the design at University College London.buy litecoin fast

"My advice is that companies should play very close attention to what is happening, because this will not go away," he said.Layers of middlemen in payments systems face a creeping threat across the nexus of commerce, stockbroking, currency trading or derivatives.Many risk extinction over time.buying litecoin with credit card“Deep in the markets there are dark pools buying and selling shares, and entities that facilitate that foreign exchange.There are Visa, Master, and PayPal.These are the sorts of guys that we are going to disrupt,” he said.University College drafted the plan after being encouraged by the Bank of England last year to come up with a radical design for a secure digital currency.The Bank itself has an elite four-man unit grappling with the implications of crypto-currencies and blockchain technology.Central banks at first saw Bitcoin as a rogue currency and a threat to monetary order, but they are starting to glimpse ways of turning the new technology to their advantage.

The findings of the University College team were delivered to the Network and Distributed System Security Symposium (NDSS) in San Diego, revealing for the first time what may be in store.Dr Danezis said a national pilot project could be up and running within eighteen months if a decision were made to launch such a scheme.The RSCoin is deemed more likely to gain to mass acceptance than Bitcoin since the ledger would remain exclusively in the hands of the central bank, with the 'trust' factor of state authority.It would have the incumbency benefits of an established currency behind it."It seems very unlikely that, to any significant extent, we'll ever be paying for things in Bitcoins, rather than pounds, dollars, or euros," said Ben Broadbent, the Bank of England's Deputy Governor.There were an estimated $5bn of Bitcoin transactions in the US last year, a remarkable phenomenon but a trivial sum in the greater scheme of things.Mr Broadbent said the attraction is the settlement mechanism used by Bitcoin, the so-called 'distributed ledger'.

"The function goes right to the heart of what central banks do," he said in a speech earlier this month.Bitcoin is inherently limited, a niche for aficionados and the ideological heir's of the 19th Century 'free banking' movement.Its code restricts it to a limit of 21 million Bitcoins, and it can handle only seven transactions per second."It is a Peter Pan system, and it doesn't really grow up," said Dr Danezis.Critics say it is also vulnerable to "double spending attacks", a form of manipulation where the same money is paid to two different people.One of them is tricked and receives nothing.The victim has no legal recourse.University College's RSCoin is safer, faster, and far less less volatile.It can scale up indefinitely.Its beauty is that it cuts out the middleman, and reduces costs to a wafer thin level.Mr Broadbent said such a currency could greatly widen the balance sheet of a central bank, hinting that the system could be designed in such a way that ordinary people could by-pass the commercial banks and hold balances directly with the Bank of England - a staggering concept.

"It's likely you'd see money moving out of existing deposits," he said.Mr Broadbent said the system could in principle be used to cover government services, tax collection, and benefit payments.It is more likely to start with the settlement of bonds and equities, and for exchanges and clearing houses.The settlement systems used by central banks – CHAPS, TARGET2, and Fedwire – are expensive and rely on stagnant technology.The UK-based CHAPS system handled £68 trillion of transactions last year.RSCoin may be irresistible for central banks.Dr Danezis said it is allows them to turn the money tap on and off with calibrated precision, and lets them track the sort of counterparty liabilities that nearly blew up the financial system during the Lehman crisis."There would be instant visibility.They could react very quickly in an emergency, " he said.Ultimately it could achieve some of the objectives of 'narrowing banking' proposed by Adam Smith, or the Chicago Plan put forward by US economists in the 1930s - but never enacted - to transfer control of money creation from private banks to the state.