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Australia bourse to use blockchain in 'world-first'

16 Comments
By GREG WOOD

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As people understand blockcchain the bitcoin bubble burst comes nearer.

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Is this a first step?

Why the RBA would want to create a digital Australian dollar

http://theconversation.com/why-the-rba-would-want-to-create-a-digital-australian-dollar-86621

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ASX chief executive Dominic Stevens said the move "will put Australia at the forefront of innovation in financial markets"

when you are the first to crash down don't blame us. Bitcoin is the biggest scam in the world

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As people understand blockcchain the bitcoin bubble burst comes nearer.

I'd say it's likely the other way around. The more people understand, the more they will realize just how much it will revolutionize the internet, giving more confidence in bitcoin.

Bitcoin is the biggest scam in the world

This just shows your lack of understanding as to what they are talking about, as the only thing this article has in common with bitcoin is the paradigm they are intending to use. It's not bitcoin, nor does the article have anything to do with bitcoin.

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This will be like when Internet was introduced in 1983 and many people were "What is an internet?" and look at us now. I'm not into bitcoin or cryptocurrencies so I cant say anything about it. Maybe bitcoin will fail, maybe not, who knows but within 10 years or sooner crypto-currency will become the standard way of paying and perhaps replace creditcards etc.

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It is the future. 30 years from now it will have replaced credit cards, ATMs, cash and banking as we know it (a long overdue change IMHO)

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@Strangerland

Do you think a better cryptocurrency than Bitcoin will ever be invented? If no, why not? If yes, do you think it could happen in your lifetime? If yes, why would you invest in something which could lose its popularity and market value just as quickly as it gained popularity?

It seems like getting you to acknowledge any problem with Bitcoin is like trying to pull teeth. If you can't publicly acknowledge any of the technical flaws, risks, inferiority or downsides to Bitcoin, then I think your faith in Bitcoin is approaching something closer to a religious devotion.

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Buy Blockchain technology; sell bitcoins; hope your Australian stock ownership is recorded correctly.

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This story is not about cryptocurrency, nor is it about bitcoin. It's about using the blockchain for a different use altogether.

Do you think a better cryptocurrency than Bitcoin will ever be invented? If no, why not? If yes, do you think it could happen in your lifetime? If yes, why would you invest in something which could lose its popularity and market value just as quickly as it gained popularity?

First you need to define what a 'better' cryptocurrency is. I can't answer the question without understanding the metric by which one would define one as better than another.

It seems like getting you to acknowledge any problem with Bitcoin is like trying to pull teeth.

I've regularly pointed out that bitcoin as an investment is a risky investment. The current rise in price may not be sustainable.

I've also regularly pointed out that keeping your money in a hosted wallet adds a lot of risk as that's where hacking can occur.

If you can't publicly acknowledge any of the technical flaws, risks, inferiority or downsides to Bitcoin, then I think your faith in Bitcoin is approaching something closer to a religious devotion.

Technical flaws: Which ones?

Risks: I've regularly stated that it is risky, go through my posting history

Inferiority: To what? Fiat currencies? I've regularly stated that I don't see bitcoin replacing them any time soon, and that Bitcoin serves a different purpose.

Downsides: Which downsides am I not acknowledging.

The fact is, I've spent a lot of time researching how the blockchain works, as for one I'm a tech guy by trade, who unlike the majority of people, can actually understand what it all means, and the other is that I've invested in a couple of companies who are developing blockchain technology for other purposes, like in this article, due to my confidence in how it works. What I haven't done is any FX trading with bitcoin at all - it's too high-risk for me. I prefer to keep my investments in the low to medium risk. Less reward, but less fluctuation as well.

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@Strangerland

First you need to define what a 'better' cryptocurrency is. 

For me 'better' is something that moves closer to replicating the functionality of the todays financial system, and eventually exceeding it. This seems to be the promise of the cryptocurrency evangelists.

For example, something that can processes thousands of transactions per second with near instant confirmation speed, which Bitcoin cannot. Something that will provide a built in escrow service or allow you to nominate another user to act as an arbiter in the event of a dispute, which Bitcoin cannot. Or ultimately a system that could automatically maintain price stability and keep inflation under control by issuing bonds or charging transaction fees to remove coins from circulation when needed, Bitcoin cannot.

Technical flaws: Which ones?

Sorry, I shouldn't have said 'flaws'. I meant 'limitations'. The confirmation times can now be horrendous. It makes the idea of ever being able to buy a sandwich at 7/11 with Bitcoin a fantasy. Clearly not as good as undisturbed systems like Visa, Mastercard. Eventually some cryptocurrency is going to crack this problem and will leave Bitcoin in the dust.

Inferiority: To what? Fiat currencies? I've regularly stated that I don't see bitcoin replacing them any time soon, and that Bitcoin serves a different purpose.

To the current financial system and whatever newer more versatile cryptocurrencies come along in the future. Ethereum is one example which offers some unique features but I never hear you praise Ethereum or other cryptocurrencies. It always seems to be Bitcoin. Why is that?! I'm guessing you own some Bitcoins but not the others?

Bitcoin is just as fiat as any fiat currency by the way. What purpose does it serve other than being a medium of exchange?

I've also regularly pointed out that keeping your money in a hosted wallet adds a lot of risk

Isn't keeping any Bitcoin risky? I think so. I would advise against holding it at all until it's time to make a transaction. I would advise people to do the same for any fiat currency too. I quickly invest my money into some other asset once I have a few yen accumulating in my bank account.

I'm a tech guy by trade

Then can you teach me how you inserted that line in your comment? :)

Also, Sorry that I didn't have time to reply to your post when we last discussed this, but you made a very good point about Zimbabwe being an example that government control doesn't offer stability. I concede that point.

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I just hope the ASX get this right when it is launched. I'm sure they will have a fall back position if a significant technical hitch arises. An awful lot of money is invested in the Australian sharemarket through industry and bank-run superannuation funds, the bulk of it in fact. This is peoples retirement money we are talking about.

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For me 'better' is something that moves closer to replicating the functionality of the todays financial system, and eventually exceeding it. This seems to be the promise of the cryptocurrency evangelists.

I'm not really sure to be honest. I don't think it's likely to replace fiat currencies, at least initially. Rather I think it will likely stabilize in price, become more mainstream in usage, and exist alongside fiat currencies. In the far off future, who knows what will happen.

To answer your original question, do I think something 'better (by your definition)' than bitcoin will come along? Maybe. It may even replace bitcoin. But you could also say that something better than cash could come along... and it did: credit cards. Yet we still have cash. Bitcoin has enough cumulative value now that may very well hold a value even if something more fiat-currency-like were to come. Or maybe not. I have no idea really.

The confirmation times can now be horrendous. It makes the idea of ever being able to buy a sandwich at 7/11 with Bitcoin a fantasy.

It's not exactly. You can get pre-paid bitcoin credit cards. You charge up the card with bitcoin, and when you purchase something, your card is debited the amount at the current bitcoin rate. Same as when I am in the US and pay for something in dollars with my yen-based credit card.

I never hear you praise Ethereum or other cryptocurrencies. It always seems to be Bitcoin. Why is that?! I'm guessing you own some Bitcoins but not the others?

I don't own any others. I don't even have a whole bitcoin. The technology is what interests me more than the actual cryptocurrency being used. I talk about bitcoin, because all the articles are on bitcoin. It's actually the system that interests me, more than bitcoin itself. And I don't 'praise' bitcoin, I simply point it out the way I see it, being someone who has spent a lot of time looking at it. But read the posts on these threads. People are so emotional about it. 'I can't wait to see it die'. 'Fools gold'. Blah blah blah. None of these people has a clue how it works, and if when someone doesn't understand that, they cannot understand why it is so impressive. I mean really, extremely, very impressive. When something is that hard to understand (and it was difficult for me to grasp, even as a tech guy), think of what that means about the person/people who created it. That is what interests me. I have no personal interest vested in bitcoin one way or the other. I'm putting my money towards blockchain development.

Bitcoin is just as fiat as any fiat currency by the way. What purpose does it serve other than being a medium of exchange?

By fiat currencies, I mean standard government backed currencies. That's just a really long phrase. Got something better?

Isn't keeping any Bitcoin risky?

I said using a hosted walled ADDS risk. I never referred to the risk of keeping bitcoin one way or the other.

But to answer your question anyways, it's not inherently risky. I have some bitcoin right now. If the bitcoin value crashes, I'm not out anything, because I never put anything in. I literally have zero risk.

I think you are trying to say that FX trading bitcoin is a risky endeavour, and I agree, I've repeatedly said that it's high-risk, high-reward. That's why I've never bought any bitcoin.

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I just hope the ASX get this right when it is launched. I'm sure they will have a fall back position if a significant technical hitch arises.

They are not just going to suddenly one day switch from one system to the other. They'll run the new system in parallel to make sure it works before they switch off the original system.

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@Strangerland

But you could also say that something better than cash could come along... and it did: credit cards. Yet we still have cash.

I think this example of evolution is a good point, but it also highlights the fact that a decentralised cryptocurrency is largely inflexible and incapable of any dramatic change or upgrade. It is very vulnerable to obsolescence in this respect. In the case of a government issued currency, it's very easy to recall old paper bills and issue new plastic ones, for example. Or eventually recall all the bills and exchange them for a national digital currency.

To answer your original question, do I think something 'better (by your definition)' than bitcoin will come along? Maybe

But unlike the money on credit cards which derive their value from the underlying cash, the introduction of new cryptocurrencies is likely to erode the market value of Bitcoin, so it's not exactly the same. This unlimited number of new cryptocurrencies entering the market is the main reason why I think anyone buying Bitcoins as a longterm investment may end up regretting it.

It's not exactly. You can get pre-paid bitcoin credit cards. You charge up the card with bitcoin, and when you purchase something, your card is debited the amount at the current bitcoin rate.

But that's piggybacking on the current financial system, not Bitcoin or any sort of disturbed ledger. I think the confirmation delays mean that bitcoin is not fit to do the single job it was designed for, to be used as a currency.

The technology is what interests me more than the actual cryptocurrency being used. I talk about bitcoin, because all the articles are on bitcoin.

Fair enough. I'm also interested in the blockchain as a casual observer. I also think it could be a revolution just like the internet was, but like all newborn technologies I think Bitcoin will be overtaken by future advances, like the 28.8k dialup modem or Netscape Navigator were. I'm not one of these people who hate Bitcoin, but I think alot of people who understand the technology behind it are missing the economics and human psychology elements. I worry that it will end in tears for alot of people. I think those who buy into Bitcoin themselves should be careful not to promote it to others who might be far less financially savvy or knowledgeable.

By fiat currencies, I mean standard government backed currencies

But in this case the fiat is issued by the users of Bitcoin. They may not be a traditional government but they have declared by fiat that Bitcoins shall have value, despite having no intrinsic value. (but from your previous posts I think you believe the technology itself is an intrinsic value)

I think you are trying to say that FX trading bitcoin is a risky endeavour,

Actually, what I was trying to get at was that if you hold any government fiat currency you are exposed to a steady inflation risk over time. Likewise, holding any Bitcoin exposes you to a risk of huge fluctuations at the moment.

The way to easily avoid both of these risks is not to hold any fiat currency or any Bitcoin until you need to buy something with either currency. I prefer to turn my currency into stocks, property, etc while I'm not using it.

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FX trading bitcoin

I don’t think there is a need to call this ‘FX trading’. Bitcoin for one thing is not a foreign currency.

‘Speculative bitcoin trading’ is probably a more appropriate description, which is similar to FX trading which is also often, but not always, speculative in nature.

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https://www.youtube.com/watch?v=Vd19SboRhVY

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