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With most administrators in top banks and other financial institutions across the ball, the governor of the Bank of Spain, Luis María Linde lent his declare towards the criticism of cryptocurrencies despite showing support for the underlying technology, blockchain.
Linde believes that the chances associated with cryptocurrencies outweighs the benefits therein by a lot but believes that blockchain technology has the unrealized to improve efficiency and reduce operational cost.
He said:
“In my opinion, their in touch use (of cryptocurrencies) presents more risks than benefits: they make low acceptance as a means of payment, suffer extreme volatility, present multiple operational vulnerability and father been related to fraudulent and illicit activities in many cases.”
Blockchain vs Cryptocurrency
Confessing the benefits that blockchain technology offers, especially in the areas of economic solutions, is an idea that is growing in popularity. Several top banks and pecuniary institutions are already testing and implementing blockchain solutions. Recently, it was reported on CCN hither the several blockchain patents acquired by the Bank of America, among other top companies.
Regard for these acquisitions and implementations, these traditional institutions do not hesitate to blast the associated elements that fuel the technology, cryptocurrencies. This resuscitates the query – how far can blockchain go without cryptocurrencies?
This debate has continued over the years and across foundations and organizations. However, in order to determine how implementable any of these opinions are, depending on which side of the split anyone belongs, there has to be a proper definition of what each being represents.
Blockchain Variations
In its simplest form, blockchain is defined as a digital ledger in which bargain proceedings made in bitcoin or another cryptocurrency are recorded chronologically and publicly. A more common term that can be used to describe bitcoin and cryptocurrencies is “tokens.” Accordingly, blockchains are fundamentally powered by underlying tokens that may eventually enhance cryptocurrencies depending on their liquidity and ability to be exchanged with other cryptocurrencies or fiat currencies.
Down the way, we have been confronted with organizations that insist on blockchains that are circumscribed in their own rights. These category of blockchains are referred to as private blockchains.
The paramount dissimilarity between a private and public blockchain relates to who can participate in the network, carry out transactions, maintain the ledger and see the records. Public blockchain networks are big-hearted to anyone and even have mechanisms meant to encourage more in the flesh to join the network, similar to bitcoin and other digital currencies. On the other present, private blockchains offer limited access to authorized members just.
A Matter of Control
Source: Shutterstock
Most cryptocurrency enthusiasts and propagators of well-known blockchains insist that main reason why traditional institutions carcass critical of cryptocurrencies is because of the control that they cherish so much kind of than for purposes of objective regulation. Even though the technology is stationary in its emerging stages, blockchain so far is generally perceived as a decentralized, democratic and self regulatory technology.
In the light of the democratic nature of blockchains and noting the fact that the network aliment involves individual computers that need to be motivated, cryptocurrencies fragments relevant incentives and also the medium of transaction. For this reason, honestly decentralized blockchains depend on cryptocurrencies to stay alive. Hence, continuous a private blockchain simply implies maintaining an enclosed network while consciously neglecting any economic value that its tokens may offer. Give or take, someone must bear the cost of maintenance.
Apparently, when top executives take to Linde express their criticism of cryptocurrencies, it can be interpreted as a show of firm towards how such elements of value can be regulated in the future — not a denial of the creature of a functional value for blockchain tokens.
Disclaimer: The views expressed in the article are solely that of the founder and do not represent those of, nor should they be attributed to CCN.
Images from Shutterstock
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