Bitcoin, Crypto currency, Blockchain

From the research: Bitcoin and the control of money

1f627c36d2cb46bc9acca78ccba22159 - From the research: Bitcoin and the control of money

Prof. Dr. Aleksander Berentsen & Fabian Schär of the University of Basel for Bitcoin and crypto-currency opportunity to establish themselves in the payment processing industry. You to draw, among other things, the nature of the control of money.

Bitcoin is good for the currency? Theoretically, Yes. This finding also researchers from the University of Basel share. In their Paper, “The Case for Central Bank Electronic Money and the Non-Case for Central Bank of cryptocurrencies” compared Prof. Dr. Aleksander Berentsen and Fabian Schar, among other things, different types of money from the point of view of the structure of their control. It shows: competition, Bitcoin is unique.

To understand this uniqueness of Bitcoin, warping, and Berentsen in your Paper, it helps to understand the nature of the control of money. To do this, you run the three points of reference, representation, transaction and production.

Physical Money

Cash is physically represented, it is tangible. For example in the Form of coins or Seem to the objects directly for the exchange value that you promise. This is no Central directory is needed, who like a lot of cash to which time has, plays for the transaction with cash, no role. To use cash, you have to log in to any Central instance. In this sense, Berentsen and Schär cash refer to as a decentralized payment system that works without a third party. However, in the case of the production: Here, in almost all cases, Central banks or treasuries or governments.

Similar applies to Gold: this is physically represented, and it is in the transaction , regardless of the instance. (Here one must note, however, that Gold as a medium of exchange will only be accepted conditionally). The manufacturing process , however, is in principle accessible to everyone.

The advantage of cash above all its anonymity, and its accessibility. A third party is needed here, however, for the production – without a Central Bank or Treasury, there is usually no cash.

Virtual Money

In the case of virtual money the researchers between the deposits differ in the case of private banks and electronic money from the Central banks. Virtual money have, therefore, no physical representation – it exists only in the accounts of the banks, as an entry in an accounting system. This way you can transfer it, but even better than cash exchange, no one has to actually be on site.

In most countries, according to the researchers, the use of households and firms private banks to make electronic payments. There are credit cards, debit cards, cheques and Online Banking. The banks compete for the deposits of the customers – therefore, you can consider the money of manufacturing as a competitive. It is a centralized payment system – the banks are the intermediaries.

In the case of virtual money by Central banks the public access to it is limited, however. In Switzerland, only around 200 Intermediaries with accounts at the Swiss therefore have a Central Bank. The money of the Central banks is thus monopolized, the transactions take place in a centralized payment system.

Virtual money has the advantage, that one can make fast Transfers. In addition, it offers the opportunity to ensure the exchange even without the presence of the Exchange. However, it is not accessible to everyone.


In the case of Bitcoin, however, the case is different. The ownership rights are decentralized oranisiert, the Blockchain is the Ledger system, the transactions monitored, the miners are the accountants. Crypto-currencies thus combine the advantages of the transactions of virtual money with the independence of distributed transactions, Berentsen and warping. In addition, it is involved in manufacturing competitive.

Bitcoin retains the advantage of cash and can abolish its disadvantage: It comes without a mediating instance, is a pseudonym, and can exceed a country’s borders. The latter aspect, it makes use of the advantages of “virtual” money that it doesn’t have to be from the Central authorities issued. So it is also in the manufacturing process independently and, in addition, yet competitive.


So far the theory. As Berentsen and Schär give in your Paper, Bitcoin is struggling at the moment with some difficulty. So it is, as before, the scaling question to answer adequately. In addition, there is a lack of acceptance in the population. Potential, however, is available.

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