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PBOC Governor Speaks About Digital Currencies

Source: bitcoin

PBOC Governor Speaks About Digital Currencies

The People’s Bank of China (PBOC) Governor Zhou Xiaochuan was just recently interviewed and had quite a bit to say concerning digital currency. The central bank official spoke of capital outflow, Bitcoin, and centralized digital yuan. Xiaochuan expressed a lot of knowledge on the subject, and he says the PBOC has been researching digital currency for quite some time now. Xiaochuan states in the written transcript:

Also read: Jamie Dimon: Bitcoin Doomed While Blockchain Is for Real

“The PBOC has studied digital currencies for a long time. History shows that currency has evolved abreast of technological advances and development of economic activities.— From the central bank’s perspective, a digital currency should be designed in a way that can best protect people’s privacy, but we also need to pay attention to social security and social order. We need to keep some necessary investigative instruments readily available to deal with criminal activities. A balance needs to be struck between protecting privacy and cracking down on illegal activities. Different preferences between these two motives will lead to different technological orientations for digital currency.” — Zhou Xiaochuan, PBOC Governor

PBOC Governor’s Opinions of Digital Currency 

The governor of the bank, Xiaochuan gave strong opinions regarding the subject of permissionless and permissioned digital currencies. He believes the central bank adds a framework of security, social order, and regulatory policy. All of which the central banker feels would be a better architecture for digital currencies. Xiaochuan states, “We think, therefore, as a legal tender, digital currency must be issued by the central bank. The issuance, circulation and transaction of digital currency will follow the same management principles of traditional currency.” However when it comes to the creation of a centralized digital yuan, the governor says they have no roadmap. He believes it’s going to take some time to issue a technology and for it to gain some adoption. Cash will coexist with virtual money for quite some time Xiaochuan says, but the cost associated with cash will rise.

“For instance, banks do not charge any fees for counting large amounts of coins now, but in the future they may charge their clients for the service. With the transaction costs of paper money rising, people will be motivated to opt more for digital money. But digital currency and cash will coexist for a long time.” — Zhou Xiaochuan, PBOC Governor

The PBOC representative then goes into the subjects of monetary policy with cryptocurrencies and the 51% attack topic with Bitcoin. He believes that the beginning stages of regulatory improvements will take time with digital currency adoption and one issued by the central bank will significantly improve. Xiaochuan explains, “The security and efficiency of issuing and withdrawing digital currency will be significantly improved in the end.” With problems like the 51% attack, Xiaochuan says that’s a Bitcoin problem and would have a hard time happening in a centralized atmosphere. The governor considers the theory a “hotly debated” topic and a digital currency created by the PBOC would differ immediately from its inception.

“As for the hotly debated “51-percent attack,” it is more about bitcoins. Bitcoins do not involve a central bank. For a digital currency controlled by the central bank, a combination of technological measures, institutional design as well as laws and regulations will be applied to ensure the security of its operation system. This differs from bitcoins at the very start.” — Zhou Xiaochuan, PBOC Governor

The interview revealed that the PBOC and the executives working there have a great understanding of what’s happening in the cryptocurrency and blockchain world. Central banks are very aware of the disruption of the current money system as we speak, including the vast number of smaller legacy institutions operating under them. Time will tell what the PBOC will do with the creation of a digital yuan. Will it be a cryptocurrency like Bitcoin? Probably not. 

What do you think of the People Bank of China Governor’s statements? Let us know in the comments below.


Images courtesy of Shutterstock, Pixbay, and Wiki commons

 

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PBOC Governor Speaks About Digital Currencies

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Led 01

Bitcoin Network Stats Show Block Time Is Back To Normal

Source: bitcoin

Bitcoin Network Stats Show Block Time Is Back To Normal

Just a few days ago, there was some concern among the Bitcoin community regarding how fast new blocks were being mined on the network. In a normal world, the time between Bitcoin blocks is roughly 10 minutes. Earlier this week, however, blocks were being found in under six minutes, thanks to a major network hashrate increase. Based on today’s Bitcoin network statistics, everything is back to normal.

Also read: John McAfee Doesn’t Think Bitcoin Is The Digital Currency Of The Future

Major Hashrate Increase Leads To Faster Blocks

The Bitcoin network heavily depends on the amount of hashpower used to generate new coins and validate transactions. Every now and then, that total hashrate will either drop or increase significantly. These types of movements will have an impact on the Bitcoin block time, which is the time required to generate a new block with confirmed transactions on the network.

A few days ago, the Bitcoin network saw a major hashrate increase, as BitFury deployed their new mining chip on the network on a large scale. Thanks to this chip’s performance and lower energy requirements, incredible computational power can be achieved. Directing such a power at the Bitcoin network caused a bit of unrest among the miners, as the block time on the network started decreasing, and came pretty close to the five-minute mark at one point.

It goes without saying that, while faster block times also means faster transaction confirmations, such a situation is a double-edged sword. Rapid validation of Bitcoin transactions can lead to security issues as these validations could come from one minor attempting a 51% attack on the network. If such an attack were to be successful, the Bitcoin blockchain would split in two, rendering a lot of transactions invalid.

However, it turned out that fear among the Bitcoin miners was a bit premature, as no miner or mining pool got anywhere near a 51% attack during this brief period of faster block generation. By the look of things, the new hashpower pointed at the Bitcoin network was spread out among mining pools in an even fashion.

One thing to keep in mind is how the Bitcoin network is affected by a difficulty coefficient, which will scale depending on the total amount of hashpower pointed at the network. If there is more hashpower, the difficulty will increase, and the block times will return to their regular 10-minute interval schedule without any issues. That difficulty adjustment has taken place, and things seem to be back to normal.

Network Statistics Confirm Block Time Is OK

Every day, a bot posts the latest Bitcoin network statistics on /r/Bitcoin, displaying the total amount of BTC in circulation, the current difficulty, and the average block time. Based on the statistics posted a few hours, the average time until a new block is found on the Bitcoin network is back to its regular interval, as it currently sits at 10 minutes and 4 seconds.

The difficulty adjustment did its work flawlessly once again, as the total amount of hashpower pointed to the network is still well above 700 petahash.  If this trend of adding more hashpower keeps up, another upward difficulty adjustment will follow in a few days. Scalability is an integral part of the Bitcoin network and goes much further than just the block size itself.

What are your thought son the current Bitcoin network statistics? Do you expect a major hashpower increase throughout 2016? Let us know in the comments below!

Source: Reddit

Images credit of BitFury, Shutterstock

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Bitcoin Network Stats Show Block Time Is Back To Normal

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