Is Britcoin a trojan horse for a social credit system?
We should be wary of Government efforts to centralise crypto technology
The Bank of England is currently considering whether it should launch a digital currency, colloquially known as the ‘Britcoin’. It is very hard to see what the point of such a digital currency would be — the reasons given by proponents aren’t hugely convincing.
The original rationale for cryptocurrencies was that they were decentralised, and their supply was limited. The programmers who created crypto were generally distrustful of central banks. They argued that the limitless capacity created by central banks would inevitably give rise to inflation. So, they created decentralised cryptocurrencies that they said would continue to operate as a smooth means of payment when the fiat currencies collapsed.
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If we take this argument at face value, other questions arise. Assuming the point of cryptocurrencies is to circumvent central bank money issuance, then what on earth is the point of a cryptocurrency issued by a central bank? If the central bank is issuing the cryptocurrency, then it de facto becomes identical to the fiat money the original proponents of crypto distrusted.
Then there is the issue of fiat money itself. Money today is already a largely digital affair. The numbers in your bank account when you put your debit card in the ATM machine are just that: numbers stored in a computer ledger. The ultimate ledger for all the currency in the economy sits in the Bank of England. So, it is unclear what difference it would make to integrate blockchain technology into this ledger and call it a cryptocurrency.
Reading the materials, one gets the sense that some over-eager folks in our central banks are falling victim to a fad. Everyone is talking about crypto these days, and so the technocrats want to be able to talk about it too. That said, if the fad ever caught on it is hard to miss the potential downsides.
The House of Lords have done the British people a good service highlighting some of these. The two that stand out most immediately are “state surveillance of people’s spending choices” and “an increase in central bank power without sufficient scrutiny”. Both are related, of course.
Blockchain technology stores permanent transaction records. If the central bank centralised this technology and ensured that the accounts were not anonymised, they would have full information of all purchases undertaken by every individual using the currency on file. As the Lords noted, this could easily be deployed by overzealous technocrats to snoop and pry in ways most of us would not be comfortable with.
This is part of a more general trend in Western economies. A few months ago, US Treasury Secretary Janet Yellen suggested that the Internal Revenue Service (IRS) should investigate bank accounts with larger than $600 balances. Yellen claimed that the goal was to stamp out tax avoidance by billionaires. This is a pretty dubious claim; in reality, Yellen just wanted to expand the already considerable power to snoop held by the IRS.
These technocratic fantasies seem to be converging on some sort of social credit score system. If technocrats do ever seize control over the banking system, then, in theory, they could track and even halt payments of citizens that have misbehaved in some way or other. While this may have sounded like a conspiracy theory only two years ago, since the onset of the pandemic many of us have seen somewhat similar technologies in action.
Not only would this be an enormous threat to liberty, but it would almost certainly end in disaster. The more control these technocrats try to exert, the more that goes wrong. We all remember the absurdity of the ‘pingdemic’ a few months ago that sent the high streets into chaos. Imagine what would happen if an entire social credit system was introduced.
“‘Britcoin’. It is very hard to see what the point of such a digital currency would be”
The writer obviously understands nothing at all of CBDC (Central Bank Digital Currency) as there are VAST implications past the snooping and tracking.
The biggest is one will hold an account with the Central Bank rather than the private banks. As money is created by private Banks loaning out money the Central Bank now is in charge of money creation. It has NO need of a ledger of ‘Asset/Liability/ It can just do anything at all, too many issues this causes to list here. scroll through this guys videos to look for CBDC to get some issues https://www.youtube.com/channel/UCNjyEXSvYUUCzagFAKmaJ1Q/videos
The 1984 things are wild also – take Geo-limiting. No covid vaccine? Your ‘Wallet’ only works at the nearest grocery store – and not anywhere else but online. AGW, you are filling your car and the pump stops half way – you have used your monthly allotment of Carbon energy. Criminals no longer in jail – the wallet is the ankle bracelet, it tracks, and it limits where and on what you can spend. Gov want to stimulate the economy? Just crank spending up by making a time limit on your money’s life span – spend it or lose it. UBI? Money moved from the better off wallets to the wallets of the less well off – and nothing you can do about it. Loans for the correct ones, none for the wrong ones – like diversity, a neighborhood needs diversifying? Well that is easy, the diverse one gets the mortgage, the non-diverse one has to try somewhere else. Drinking too much? Your alcohol price just went up (your personal alcohol tax adjusted)
It is like the TVs in 1984 which also watch you, and have no ‘Off Switch’.
But the biggest issues are on a higher level of economics as Private Banks have been the basis of nations economies from ancient days – and now giving Money over to government will create an entire new paradigm with global effects of vast issues. I recommend this guy again, in his other channel, George Gammon https://www.youtube.com/watch?v=_LcRYMEzx2k ‘CBDC Secret Global Elite Don’t Want You To Know’ and his many other ones on CBDC, it gets really, really, weird.
BUT WAIT, There’s More……
Blockchain. Once all real estate Deeds go on blockchain, and they will, all the world is a global commodity, and when stocks go on blockchain? same, and so the international elite gobble up the world. Chinese guy buys a soy bean field in Brazil, Indian person buys the house next to yours to diversify his savings and rents it out, I buy an apartment in Turkey with my savings as their money is down so a great price, and rent it out……The entire deck of the global assets get reshuffled and passed around the table – and one knows what always happens at a Poker Table – one player ends up with all the money, the others broke….
Very scary stuff indeed
” Central Bank now is in charge of money creation. It has NO need of a ledger of ‘Asset/Liability/ It can just do anything at all “
But the BofE has been creating Mickey Mouse Money for the last 10 years ?
It does exactly as Govt instructs … it is not independent
Galeti, brilliant to see you’re tapped into GG / RC because his insight is an extremely important canary in the mine imho… I know many on Unherd knock Bitcoin but seems to me that there has to be an alternative that citizens adopt to be de facto. It’s also made to look stinky because it threatens the CBDC dream of social control. Well, some businesses have committed to bitcoin too as a digital gold – I hope people take time to watch this youtube too – https://www.youtube.com/watch?v=1ToffjIo6hk
I just wonder what creating things in case other things fail. If the fiat currencies fail then workers won’t get paid and nor will suppliers. That means the power stations will fail (workers won’t go to work to not get paid and no raw materials) and that means no (or very limited) electricity (especially on a windless night). So all the computers will go down and with them the blockchain that supported the digital currency that was conceived in case the fiat currency failed!.
With no paper money (after all it’s digital) to pick up the slack we’ll be back to bartering!
Digital currencies are actually reliant on the fiat currency supporting their efforts.
…unless you’re paid in bitcoin.
When fiat currency fails, the move is to gold.
For citizens, experiencing huge devaluation of fiat… where do they go? To Digital Gold?
“what on earth is the point of a cryptocurrency issued by a central bank? “
err, debatable whether a CBDC is a crypto currency?
A CBDC is an attempt by the banks to crush the crypto currency surely and to do away with paper money as much as possible
The question on CBDC’s is whether they would be programmable … this is the crunch … when your welfare benefit cheque can only be spent on what Govt decides etc etc.
CBDC is a sensible way forward for the BofE … it cuts out the middle man ( the clearing banks ) and digitises our currency giving flexibility and low cost … but if its programmable we will become the dystopian state the electorate constantly oppose
I rather doubt crypto in general: not secret, not secure, not liquid, and not cheap to “mine”. But as you say, it’s even worse if run by the state. I have a perfectly adequate digital currency now: it’s called online banking, and I don’t require anything more.
When you buy a bitcoin you get a number, whoever has that number can spend it. The blockchain does not hold information on who owns it or what it is spent on. The blockchain tracks the verifications of the numbers evidencing the ownership of a bitcoin that must be made if you decide to spend it. If the transaction goes through the buyer gets a new number and your old number is no longer valid. Your bitcoin number is a bearer token that can be copied and used by someone else, if they beat you to it. Or you can lose it, in which case no one can ever spend it. This article does not make sense.
respectfully those statements are not correct – highly recommend watching this – https://www.youtube.com/watch?v=bBC-nXj3Ng4&list=LL&index=83.
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