The Federal Reserve Bank of Saint Louis: in some respects, bitcoin currency is more robust than the legal performance

The Federal Reserve Bank of Saint Louis: in some respects, bitcoin currency is more robust than the legal performance


The Federal Reserve Bank of Saint Louis FabianSch? R recently published an article that many benefits of money password. This article points out that, in addition to providing the praise of some related password money is mainly application, very suitable for encryption assets become an important asset category.

The Reserve Bank of bitcoin on behalf of praise

This article begins with a summary of the many core motivation of bitcoin development, said the intention of SatoshiNakamoto is to develop a similar to the cash payment system, favorable characteristics allow electronic transactions but also including a lot of real cash.” The two authors said that the design of bitcoin intention is through a form of currency, bitcoin allowed by data document circulation, so that bitcoin can keep physical cash advantage, at the same time can be freely issued by internet.

Berentsen and he pointed out that only when the true potential of distributed application time zone classification technology universal block chain technology will become obvious, this technology may take many years or even decades. So the author thinks that cannot predict bitcoin and block chain technology will have the greatest impact on the industry. This article emphasizes, through the color of coins and intelligent contract innovation, change the dialectical relation of the economy might be realized.

Unique applications

The author points out that the coin on the color, bitcoin can be used to generate various fingerprint data files, and then store them in a block in the chain.” This article pointed out that “public blockchain created a monitoring data file potential,” which may have a profound impact on the “data integrity”. It is asserted that “color coins will lead to any attempt to operate, because any change to the data file will lead to a completely different hash value,” to create a scattered, tampering of data records, this is for all public.

Intelligent contract has been described as “self enforcing contract”. The author points out that the typical function of intelligent contract is only prescribed under certain conditions will perform bitcoin payment. In addition the author also pointed out that the application of intelligent contract can be used to hosting a variety of electronic voting system, including identity management and decentralized organization and various forms of fund-raising.

The risk associated with encryption currency

Although the author of encryption currency is optimistic, but there are still many risks are considered and assets related to encryption. First of all, this article emphasizes the bifurcation may cause the risk of specific encryption currency, it describes the classical aether square and bitcoin cash is given in a crypto currency community, ideological differences between various factions in the.

People think the energy waste from mining in work and increase the difficulty of mining, it is also considered a major risk cryptocurrencies space. However, because of the lack of research on the power consumption of the need for operation by the central bank, the author by emphasizing the energy cost associated with centralized payment system, and the mainstream of the practice described a rebuttal. In addition to bitcoin, the article also asserted that “many assets can be used instead of the encryption and consensus protocols, these protocols do not depend on the computational resources (alone).”

The article also pointed out that the price fluctuation and encryption currency is a risk, may be widely used in virtual currency barriers. The author thinks that probably bitcoin unit will show short-term price volatility is higher than many government statutory currency unit. Due to the lack of such as the U.S. Federal Reserve Board (fed fed) such a mechanism, the federal reserve system has been set up to provide an elastic currency price fluctuations due to changes in monetary tools to ease the total demand and produce.

Promising results

Although Berentsen and Sch? R said the price fluctuation and the scale of problems often cause concern over the suitability of bitcoin as a payment tool, but bitcoin is described as a new technology, it allows the central authority does not need to use the monetary unit of storage and transfer.

The evaluation of articles from the author of bitcoin as a means of payment that “as an asset, bitcoin and mark block based on chain should not be ignored,” and stressed by encrypting the currency, so many unique applications such as management and verification of data integrity and intelligent contract become possible. The author writes, “application utilities including promising may bring changes to the financial and other industries.”

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