National cryptocurrencies will never be able to compete with Bitcoin because no one will trust a system that requires advance permission from and which is controlled by a government to use it.
[Note: This is an op-ed, edited by Allen Scott]
National Cryptocurrencies Will Never Be Global
News is just in that the mint of a very important, historic sovereign nation has just hired a company in a separate nation to help it launch its own “Blockchain not Bitcoin” attempt to ride the Bitcoin wave. This is extraordinary in several ways, and allows a general principle to be explored.
First off, this mint doesn’t understand how Bitcoin works. That is clear. They’ve made the common error of believing what computer illiterates in well regarded newspapers mistakenly repeat verbatim about Bitcoin; that you can have “Blockchain without Bitcoin”. And this is only the first of their many errors in this project.
Even if their technical and economic assumptions were correct, there is no way that their private money system can beat the market. The Russians and the Chinese will never accept domination of a global e-money by a single foreign nation coded by a second party.
They will at a minimum, launch their own central bank altcoin, or more likely, settle on Bitcoin as the civilized global standard. These people have made the fundamental error of thinking that they can beat the market. It is the same error the Americans made thinking that everyone would use CDMA instead of GSM.
This new money will never be international. No one will trust a system that requires advance permission from and which is controlled by a government to use it, that can exclude any actor based on arbitrary rules of a hostile government when Bitcoin is available. There is no logical reason to trust