Rise Fall Central Bank Digital Currency

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Bitcoin’s popularity has unleashed a race for digital money dominance, which is likely to intensify with the emergence of Central Bank Digital Currencies (CBDCs). In a 2021 survey of central banks, 86% of respondents indicated they are actively researching the potential for CBDCs. The question that emerges is how will CBDCs live alongside borderless cryptocurrencies like bitcoin?

This paper is a three-part study on CBDCs within the context of the evolution of money. Readers will find that CBDCs will play an important role in the normalization of money as a digital concept. The paper outlines several factors that will contribute to the rise of CBDCs in the coming years, as well as the design limitations of CBDCs that will drive demand back to bitcoin.

  • Part 1: Humans and Change — We recreate old things before we reimagine new things.
  • Part 2: How CBDCs Fit In The Evolution Of Different Types Of Money — How CBDCs compare to bitcoin, in the context of fiat money, representative money, and commodity money.
  • Part 3: The Challenges Of CBDCs: Digitization Instead Of Innovation — How CBDCs are likely to be rolled out, and the four design limitations that will drive demand back to bitcoin.

Part 1: Humans And Change

History shows that humans rarely make the direct leap to new breakthrough technologies.

The human change cycle often starts by adopting a semi-improved version of the old thing before reimagining a new frontier. The pattern of old ⇒ semi-new ⇒ new is evident across numerous industries:



Source link Bitcoin Magazine

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