⚠ Why Government Cryptos Could Pose A Threat To Our Privacy
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What's going on: Governments across the globe are still not sure what to do with cryptocurrencies. Ban them like China? Embrace them like Estonia? Or just accept them for now and tinker on regulatory mechanisms like most western states?
Well, there is another option that is currently explored by several countries like China, Japan, Sweden, Venezuela, Estonia and Russia: develop some form of own, central bank owned digital currency. So how could those government coins look like?
First, they will not at all be like Bitcoin. Instead they will be centralized.
It's questionable if we should still call them "crypto", because they will not be independent of central banks and governments, but instead be the exact opposite. It makes more sense to call them "digital fiat" or "digital currency".
Because of what they are, centralized digital currencies are no threat to Bitcoin and other cryptos, but to the privacy of citizens: Sure, people will have a convenient way of sending and spending money on the internet. But this also means that you are transparent as you can be – that's even more scary in authoritarian countries.
Denmark for example is moving towards a cashless society for years, even before Bitcoin existed. So the crypto trend is basically just a nice coincidence to make central bank controlled digital fiat cool.
Why should I care: The idea behind digital currencies is not new at all, but the crypto-boom of 2017 was a watershed year for the topic. Now governments have to decide if they want to be part of a revolution bigger than the Internet, or stand on the sidelines and do nothing. But: Not everything that is digital money and uses some sort of blockchain is crypto. In fact government issued digital cash is the exact opposite of crypto: central bank owned and issued money, that is not private at all and is even better to control than oldschool fiat money.
Source: mashable.com, cnbc.com
GIF: giphy.com
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