Sweden first with government supported E-currency

[ParanoidWallet]

It's recently come to the attention in Swedish media that the Swedish central bank "Riksbanken" is looking to try and launch their own digital currency. This would be an addition to the current SEK - Swedish Krona (English: Swedish Crown), most likely the name would be the E-Krona (English: E-Crown). Their hope is that this currency could be launched within 2 years from now.

 

Sweden has (as probably most other countries) seen a big decrease in the use of regular physical currency.

Quote

"The number of notes and coins in circulation has reduced by 40 percent since 2009, while popular smartphone apps like Swish allow electronic payments to be made almost as quickly as handing over physical money. " (Thelocal.se)

 

This move is particularly interesting as Sweden is currently in a state of changing its current currency, to new notes and coins. This change is currently ongoing since 2015 and will be in place until mid 2017. You can see pictures of the "new" notes and coins in Sweden below.

 

 

 

To give my opinion on this, not really sure what to think. As much as I'm for a new currency, it also worries me. Since it's all electronic and computer made, there would be a possibility of malfunction in the beginning before it really gets going. This could potentially be harmful to early adopters. The other thing that puzzles me is how it will be used. Will you be able to use it with a credit card as you do now, just that you can't withdraw them as notes in any possible way as you normally can with an ATM, or will it be some sort of currency that lives within your computer and smartphone only? If so, will it require internet access to be used to pay with? How will online stores implement it and will you be able to use it outside of Sweden? A lot of things needs to be cleared up, but generally this is exciting.

 

Let me know your worries, toughts and questions below  

 

Sources

Thedigital.se - Sweden could soon have its own digital currency

Newsbtc.com - The Central Bank of Sweden has announced plans to introduce its own digital currency in the next two years. Read more...

IN SWEDISH: Sweclockers.com - Sverige kan bli första landet i världen med egen digital valuta

[suicidalfranco]

should just use btc

[grayblizzard]

@ParanoidWallet

 

hope it ends up better than bitcoin, I imagine it will do slightly better considering I don't think you would mine ekrona 

[ParanoidWallet]

Just now, grayblizzard said:

@ParanoidWallet

 

hope it ends up better than bitcoin, I imagine it will do slightly better considering I don't think you would mine ekrona 

Really hope so too. I've never got too deep into BitCoin and all of that (mining etc), but I've heard about it and have though it was a weird thing, to be able to mine it. Guess the central bank of Sweden has something in the back of their minds, or at least I hope so..

[grayblizzard]

1 minute ago, ParanoidWallet said:

Really hope so too. I've never got too deep into BitCoin and all of that (mining etc), but I've heard about it and have though it was a weird thing, to be able to mine it. Guess the central bank of Sweden has something in the back of their minds, or at least I hope so..

Definitely 

[PirateFish]

I'm pretty sure they won't use BTC because they want to control the money - just as they do now with the current SEK.

 

But I don't really understand why they want to do it - our money is already digitalised.

[ParanoidWallet]

1 minute ago, PirateFish said:

I'm pretty sure they won't use BTC because they want to control the money - just as they do now with the current SEK.

 

But I don't really understand why they want to do it - our money is already digitalised.

Won't be BitCoin for sure. I've been thinking about that too. Guess it's an alternative where you in no way can get it to physical money? As you can with the current currency.

[EminentSun]

I think that eventually this will lead to a greater degree of stability by lessening the impact of fractional reserve banking in times of economic crisis.

[PirateFish]

30 minutes ago, ParanoidWallet said:

Won't be BitCoin for sure. I've been thinking about that too. Guess it's an alternative where you in no way can get it to physical money? As you can with the current currency.

Ahh yes - that makes sense. Kind of an interesting way to eliminate physical currency.

 

But I'm sure it won't work any different that money on a credit card does right now. There's just no physical objects to represent them.

[JoseGuya]

They won't be using Bitcoin for sure, and note Bitcoin in upper case. There is absolutely no way a central bank will allow its currency to be distributed and forfeit its money printing privileges.

[NumLock21]

Is there physical currency to backup e-currency or do people just run some program and generate money out of thin air like bitcoin, instead of doing actual work.

[JoseGuya]

1 minute ago, NumLock21 said:

Is there physical currency to backup e-currency or do people just run some program and generate money out of thin air like bitcoin, instead of doing actual work.

Bitcoin does not create money out nothing, in contrast to central banks.. 

[The Benjamins]

2 minutes ago, NumLock21 said:

Is there physical currency to backup e-currency or do people just run some program and generate money out of thin air like bitcoin, instead of doing actual work.

Its not generated out of thin air, BTC is based on a timed inflation that is designed to slow down over time. currency is just a median.

[ParanoidWallet]

3 minutes ago, NumLock21 said:

Is there physical currency to backup e-currency or do people just run some program and generate money out of thin air like bitcoin, instead of doing actual work.

Not sure how that works. But I guess there could (?) be some "trade in, no going back" program in the beginning, or eventually continued. 

[tlink]

2 hours ago, suicidalfranco said:

should just use btc

no they really shouldn't you don't want your nations currency to be depended on something you don't control. thats asking for an economic crisis. 

[Dackzy]

damn swedes

[SpaceGhostC2C]

1 hour ago, PirateFish said:

Ahh yes - that makes sense. Kind of an interesting way to eliminate physical currency.

 

But I'm sure it won't work any different that money on a credit card does right now. There's just no physical objects to represent them.

Yes, I still don't see what it would add that is not done by the advanced "electrification"  (?) of the payment system. Just telling you the ia no physical support sounds more of a psychological effect, if anything. 

[Mihle]

Actually, it has been talks that Norway may do it too

[PirateFish]

1 hour ago, NumLock21 said:

Is there physical currency to backup e-currency or do people just run some program and generate money out of thin air like bitcoin, instead of doing actual work.

If anything regular currency is made out of thin air. At least it takes work to mine bitcoins.

 

Bitcoins are much like gold. The California Gold Rush happened because gold was relatively easy to mine, but after all the gold in the upper layers of earth was taken, gold became a lot harder for people to get. That the same that has happened to Bitcoins. In the start it was relatively easy to mine, but now it's getting harder and harder.

 

Regular currency keeps it value, because a single entity controls the amount that is in circulation. During WWII Germany basically gave people huge amounts of money which collapsed the Deutsche Mark. That can happen because it's controlled. Bitcoins much like gold can't from one day to another lose all it's value.

[tlink]

2 minutes ago, PirateFish said:

If anything regular currency is made out of thin air. At least it takes work to mine bitcoins.

 

Bitcoins are much like gold. The California Gold Rush happened because gold was relatively easy to mine, but after all the gold in the upper layers of earth was taken, gold became a lot harder for people to get. That the same that has happened to Bitcoins. In the start it was relatively easy to mine, but now it's getting harder and harder.

 

Regular currency keeps it value, because a single entity controls the amount that is in circulation. During WWII Germany basically gave people huge amounts of money which collapsed the Deutsche Mark. That can happen because it's controlled. Bitcoins much like gold can't from one day to another lose all it's value.

yes it can. don't spread lies. we saw a perfect example of this when bitfinex got hacked, bitcoin plummeted by 20%. or for example if someone invents a ASIC that can mine bitcoins crazily fast. its still controlled by a single entity, a single bottleneck.

[JoseGuya]

3 minutes ago, tlink said:

yes it can. don't spread lies. we saw a perfect example of this when bitfinex got hacked, bitcoin plummeted by 20%. or for example if someone invents a ASIC that can mine bitcoins crazily fast. its still controlled by a single entity, a single bottleneck.

And so does the value of gold, as was experienced with the gold rush... Nothing has INTRINSIC VALUE, people give value to stuff, and so bitcoin can and do has price drops and spikes, but has the advantage of not being inflationary; it is inherently deflationary, by design. 

[tlink]

5 minutes ago, JoseGuya said:

And so does the value of gold, as was experienced with the gold rush... Nothing has INTRINSIC VALUE, people give value to stuff, and so bitcoin can and do has price drops and spikes, but has the advantage of not being inflationary; it is inherently deflationary, by design. 

but bitcoin is the EXACT opposite of deflationary, its by design even more inflationary than physical money because you can literally create infinite amounts of it because its not limited to physical resources.

[JoseGuya]

1 minute ago, tlink said:

but bitcoin is the EXACT opposite of deflationary, its by design even more inflationary than physical money because you can literally create infinite amounts of it because its not limited to physical resources.

Currently, yes, but the total amount of bitcoins is fixed, to 21 million units. That's why its deflationary. 

 

Edit: The total amount is 21 million units, when the mining step is finished, currently we are at 12 million units, with the prospect of getting to 21 in the next century... IF quantum computing is not a thing yet. 

 

Edited November 22, 2016 by JoseGuya

[SpaceGhostC2C]

17 minutes ago, PirateFish said:

If anything regular currency is made out of thin air. At least it takes work to mine bitcoins.

No, not really. Not beyond the sense in which it's costly to print money or to operate money supply more generally.

 

18 minutes ago, PirateFish said:

Bitcoins are much like gold. The California Gold Rush happened because gold was relatively easy to mine, but after all the gold in the upper layers of earth was taken, gold became a lot harder for people to get. That the same that has happened to Bitcoins. In the start it was relatively easy to mine, but now it's getting harder and harder.

Except it isn't. The natural amount of bitcoins is zero. Then some dude created the first few bitcoins ex nihil, and then some people have been adding to the total through wasteful use of arbitrary amounts of electricity (arbitrary in that the difficulty of "mining" is unrelated to transaction validation, the increasing computational time needed is artificially added by design). Gold, on the other hand, is a natural resource which exists regardless of its monetary use, and can be given industrial uses. Bitcoins (and clones) are much closer to fiat currency than to gold.

 

21 minutes ago, PirateFish said:

 

Regular currency keeps it value, because a single entity controls the amount that is in circulation. During WWII Germany basically gave people huge amounts of money which collapsed the Deutsche Mark. That can happen because it's controlled. Bitcoins much like gold can't from one day to another lose all it's value.

No, regular currency keeps it value the same way bitcoin, gold, or anything does: by having a reasonable expectation of other giving you good in exchange for currency/bitcoin/gold/caps. That is the only source of value for any means of exchange.

Also, you are mistaking the Weimar's hyperinflation with WWII. I suggest you revise your historical evidence.

On the other hand, bitcoins, like gold, can lose their value all the same. In fact, it already happened to bitcoin after the fall of Silk Road - we are talking a several zeros drop. Bitcoin is much more volatile than the currency of any developed country at the moment.

 

15 minutes ago, JoseGuya said:

And so does the value of gold, as was experienced with the gold rush... Nothing has INTRINSIC VALUE, people give value to stuff, and so bitcoin can and do has price drops and spikes, but has the advantage of not being inflationary; it is inherently deflationary, by design. 

You are almost right except for the last part: no means of exchange is inflationary or deflationary by design; that is a widely spread misconception about bitcoin, probably stemming from the fact that its creators and main promoters understand a lot about cryptography and very little about economics.

The only thing bitcoin has, and the sense in which it can be seen more similar to gold than currency (to be accurate, closer to the gold standard than to modern fiat currencies) is that it has a pre-committed, perfectly anticipated rule for money supply. Whether that supply will be compatible with inflation, deflation, or constant prices is to be determined by several factors at each point in time, all of them beyond the design of bitcoin.

 

So yes, in that particular sense, bitcoin tries to mimic the lack of flexibility of the gold standard, the system that collapsed twice in 40 years under the weight of its own retardedness.

[PirateFish]

21 minutes ago, tlink said:

yes it can. don't spread lies. we saw a perfect example of this when bitfinex got hacked, bitcoin plummeted by 20%. or for example if someone invents a ASIC that can mine bitcoins crazily fast. its still controlled by a single entity, a single bottleneck.

Yes that it true.

 

But what I'm saying is that unless someone has a shitton of bitcoins hidden somewhere - and then suddenly chooses to sell them all, the Bitcoin won't deflate at the same way as if the national bank (or what the different entities are called) just suddenly prints more money.

 

But you're right, Bitcoins just like every other thing in the world is unsafe from deflation. Everything can loose value. But it's much harder for hard-to-get objects to loose it's value.

 

We're seeing the same with diamonds right now. Where there's been talked about huge diamond storages that artificially keep the value up, and the need to set the price higher for the imperfect diamonds, since they can be manufactured now, a lot cheaper and more precise than "real" diamonds.