Bitcoin Revolution The Next Internet, Says Bank Of England

The arrival of electronic currencies could revolutionise the way Britons pay for goods and services, in much the same way as the internet shook up how we access information, the Bank of England has said.

Cashless forms of payment like the cryptocurrency Bitcoin “potentially combined with mobile technology, may reshape the mechanisms for making secure payments”, the central bank said.

While traditional currencies, including the pound, are backed by central banks, new alternatives have allowed individuals to exchange directly without any such third party.

The Bank could itself create digital currencies, making the new system available as it does with banknotes today. Research would be necessary to develop the technology “without compromising a central bank’s ability to control its currency and secure the system against systemic attack”, the Bank said.

The idea of countries launching their own electronic currencies has gained pace in recent weeks, as Yanis Varoufakis became Greece’s newest finance minister. The Greek-born economist has previously suggested that “the technology of Bitcoin, if suitably adapted, can be employed profitably in the eurozone as a weapon against deflation”….

By Peter Spence – The Telegraph –

[ONLY WAY Editor: Check out our “WAMPUM” cryptocurrency page]

Venezuelans use Bitcoins to bypass socialist currency controls

By Girish Gupta – Reuters.com –

Tech-savvy Venezuelans looking to bypass dysfunctional economic controls are turning to the bitcoin virtual currency to obtain dollars, make Internet purchases — and launch a little subversion.

Two New York-based Venezuelan brothers hope this week to start trading on the first bitcoin exchange in the socialist-run country, which already has at least several hundred bitcoin enthusiasts.

Due to currency controls introduced by late president Hugo Chavez a decade ago, acquiring hard currency now means either requesting it from the state, which struggles to satisfy demand, or tapping a shadowy black market. Even small dollar transactions are out of the question for most Venezuelans.

While President Nicolas Maduro makes frequent tirades against black market traders, whom he sees as part of the “economic war” on his government and the reason for inflation and shortages, he has never said anything about bitcoin. The government declined to comment on bitcoin policy.

That has created a gray market for bitcoins, a digital currency which is not governed by a central bank or controlled by a single source. Bitcoin values have soared and fallen in the last year as a popular exchange, Mt. Gox, collapsed and some developed countries began to mull bitcoin regulation. In Venezuela, using bitcoins can carry a scent of subversion.

“Bitcoin is a way of rebelling against the system,” said one bitcoin trader, Caracas-based software developer John Villar, 32, who discovered the usefulness of bitcoin when he wanted to buy a $10 cellphone battery on Amazon.

Unable to pay for it in dollars, he bought bitcoin off a friend using local currency. He then used the bitcoin to purchase an Amazon gift certificate, with which he bought the battery.

Gerardo Mogollon, a business professor who styles himself as ‘Dr. Bitcoin Venezuela,’ speaks at conferences and appears in online videos to urge Venezuelans to adopt the currency.

“I’m teaching people to use bitcoin to bypass the exchange controls,” said Mogollon, a 42-year-old professor at the University of Tachira’s graduate business school.

Currently, bitcoin trading in Venezuela is between enthusiasts who use internet forums and social media to make ad hoc deals.

 
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