Russia's Largest Bank Proposes Bitcoin Alternative

Tyler Durden's picture

Hot on the heels of JPMorgan's "web cash" developments in the virtual currency arena, the CEO of Russia largest bank - Sberbank - appears to be looking for alternatives...

  • *SBERBANK CEO GREF SAYS FUTURE BELONGS TO VIRTUAL CURRENCIES
  • *GREF SAYS DEVELOPMENT OF VIRTUAL CURRENCIES 'CAN'T BE STOPPED'
  • *SBERBANK CEO CALLS FOR GREATER REGULATION OF VIRTUAL CURRENCIES
  • *SBERBANK MAY FORM OWN VIRTUAL CURRENCY ON BASIS OF YANDEX MONEY

When a pseudonymous 'Japanese' coder creates a crypto-currency that gains acceptance among thousands of vendors, it's dismissed by the powers-that-be and called a ponzi scheme by the MSM. One wonders what happens when the largest banks of the US and Russia sanction the 'idea' of a decentralized, unregulated, 'money' transfer system.

Via Bloomberg,

“We are at a new stage of technological development. I can’t imagine how it can be stopped,” Sberbank CEO Herman Gref tells reporters in Moscow.

 

Gref says virtual currencies need greater regulation

 

“These experiments must end in one or two crashes” before virtual currencies become firmly established, Gref says

 

Says Yandex Money isn’t “a currency but it’s a first step in that direction”

 

Of course, the difference is - the banks want to own it...

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fonestar's picture

BITCOIN!!

(The banks want to own it, they can't own it)

CH1's picture

More legitimacy for BTC. :)

Pladizow's picture

CommiCoin, RedCoin, RuskyCoin, PutinCoin, KGBCoin?

CH1's picture

Maybe, but they'll have to compete for users.

Occident Mortal's picture

This guy doesn't want Bitcoin, he wants their own virtual currency. YANDEX money, whatever the hell that is.

 

Therein lies the problem.

 

It is the same as the dotcom problem, the cost of competing with an incumbent is extremely low.

 

Soon there will be thousands, millions of different virtual currencies all competing with each other, all equally worthless.

 

The only value Bitcoin has is it's brand. That is it. That's the only thing that makes it more valuable than Litecoin, or namecoin or YANDEX money.

Prisoners_dilemna's picture

Respectfully  I disagree,

Value of an object relates to the utility of an object.

We value air, water, blow jobs, and muscle cars differently based on how much we need it.

Price reflects utility combined with scarcity.

Air is everywhere so we don't pay for it, yet. Same with water.

Muscle cars and BJ's       well we know those can command a high and a UBER-HIGH price.

 

Whats the brand of water and blowjob you use?

Occident Mortal's picture

You are confusing value with price.

 

The value of water is high it has extremely high utility, yet the price is low.

Same with air.

 

How much you value something and what you are willing to pay for it are not really connected.

 

How much do you value your watch? More than you value the air you breath?

Which are you willing to pay more for?

 

 

i-dog's picture

No matter how many xxxCoins are launched, here is where the focus of the BIS (and eBay, etc) will be:

*SBERBANK CEO CALLS FOR GREATER REGULATION OF VIRTUAL CURRENCIES

Problem...reaction...solution.

Oracle of Kypseli's picture

Lots of noise about digital cryptocurrencies. My take is that now that most people realize how the curent currencies work, the banks want to jump on the digital currencies which are only understood by the few to muddy the waters and continue their cleptocracy.

PM's, rare earths, fertilizer, water, arrable land and self sustaining communities have the best chance to thrive. Everything else is fudgeable.  

dark pools of soros's picture

get off the internet and I will take your stance more seriously

fonestar's picture

Worst case scenarios for spending $20 on Bitcoin:

 

- You help break the bankster's monopoly on money

- You learn about cryptography and p2p networking

- You own the strongest currency on Earth

- You own more Bitcoin than almost everyone on Earth

- You screw it up or have your BTC stolen and lose $20

snr-moment's picture

Couldn't agree more.

 

And once it gets down to realistic value, I'll buy 4 or 5 for 20$

But in the meantime, hell yeah, let all the fools rush out and buy up the competitors  Morons!

DoChenRollingBearing's picture

Here is some of the math behind Bitcoin, it is extraordinarliy complicated (and since the inventors evidently gave their BTC Ecosystem a lot of thought), but I provide an overview.

Thanks very much to three people I do not even pesonally know: "Bitcoin Insider", and ZH-ers "zaphod" and "Prisoners_dilemna" (latter wrote a Comment just above).

"Fun With Bitcoin for Beginners: Part Four"

(Note: tinyurl's service uses a "hash function" to reduce the size of a link!)

http://tinyurl.com/lq667xz

DoChenRollingBearing's picture

The thanks, really, go to Zero Hedge and those who encouraged me to look into BTC.  Your envangelizing, "Original Donor's" gift to me, "Bitcoin Insider's" help as well as the two Zero Hedge members I mentioned above.

And even CH1, who has long suffered the slings & arrows of tough attacks.

Also tmosley, whom I have long "known", he is a scientist and I have NEVER caught him in a lie or untruth that I noted.  

I have long been a gold stacker (since the 1980s).

fonestar's picture

It sounds like you are having fun with BTC and that's what it should be about.  After a few centuries of central banking tedium we could all do with some levity.  I really enjoy the humour of the Bitcoin and open source communities.

dark pools of soros's picture

ZH purged all the old comments (probably to comply with the new anti-anti-whatever) but you would of had plenty of good posts on bitcoin last spring to peruse

 

 

 

funthea's picture

If half of all bitcoins are held by less thatn 1000 people, doesn't that inherently make for a very scetchy and caotic environment? What happens if a large holder spends a very large chunk? Seems a bit dangerous. Seams for it to be most stable would require much less concentration among so few.

In utopian bitcoinland, how is this reconciled? Or has no one given it much thought? Rather dangerous to have individuals with more wealth than entire countries. This is why it won't happen. When the price rises to a certain limit, as to bar the entry for most, the top holders will facilitate an exidous that will in like way facilitate a cascade that will redistribute the bitcoin among the masses once the fall and discussion have run their course. Then and only then will their be stability in bitcoin and will it find a legitimate grounding.

TwoCats's picture

Good luck with that.  Last crash bottomed at $50, I expect the next one to bottom above $200.  In the early stages, BTC price is driven by adoption/acceptance, which has only grown over the last 12 months worldwide.

If bitcoin is ever under $100 again (excepting possible flash crashes due to lack of liquidity in a particular exchange), it will be dying, TPTB will have beaten it underground.

fonestar's picture

I don't know how many "dollars" Bitcoin should be worth.  I don't care too much about dollars.  I don't remember my name before I was born either.

funthea's picture

Bitcoin could find a legitimate hold that TPTB could not touch. However, as mentioned above, it would need to crash hard enough to break up the concentrations that exist to be good for the people. For if it doesn't crash and redistribute, the concentration of power over time would be worse than what we have now. No, I am no socialist by any means, but if bitcoin is to survive for the people, and the good of the people, it can not have these levels of concentration. It would need to be distributed. Failure to see this, will have dire consequences.

silverserfer's picture

you could have bought an oz of silver and slept better at night knowing your not one of the dumbfuck bitcoin brigade marching their way to the slaughterhouse. 

that is the worst case sceneario for wasting $20 on bitcoin thinking you are investing or saving.  

fonestar's picture

Face it, you don't understand what the hell you are talking about.  You don't know what a "Bitcoin" even is.  Is it a thing?  Is it a network?  Is it a program?  Is it a currency?  Is it a protocol?  You are far out of your depth but rather than invest the time in learning you'd rather spread FUD.

silverserfer's picture

I know exactly what the bicoin system is. It is a manuifestation of new money being introduced into the system to distract the masses and soak up wealth. We differ on the view that these digital currencies are in a free market from central banks. Its just all new QE that is drawing in people. 

Only a fool believes that a digital currency is going to free them from fiat ponzi's. They are fiat ponzis!

ElvisDog's picture

Seriously, I could make a better argument for spending that $20 on lottery tickets. 

I love analogies, so here's another one. Bitcoin is like Netscape (you youngsters probably never heard of it). They came out first, were gonna take over the world, then the establishment (Microsoft) moved in and used their greater resources to squeeze the life out of Netscape. Same thing will happen with bitcoin vis-a-vis all the central bank created digital currency replicas. 

fonestar's picture

How would you know how old I am?  You think that Bitcoin users are young?  ROTFL!

I guess you are a dog so I can pardon you not understanding.

NidStyles's picture

It seems only the young and Socialists are the ones that in support of it. The rest of the people are aware that Bitcoin is nothing new, and that it like Beanie Babies is only a fad.

fonestar's picture

Socialists?  Are you f*cking kidding me idiot?  Bitcoin is the embodiment of anarcho-capitalism and FYI here in Canada members on cbc.ca (which is very much a socialist website) are scared of Bitcoin, one user even commenting "Bitcoin could become the currency of freemen and the American Tea Party".

And most Bitcoin users are very old like myself.

funthea's picture

fonestar, what is your take on the notion of the massive concentration of bitcoin among so few? How do you see that playing out?

ElvisDog's picture

Well, not you fonestar, but there is another bitcoin-ista on ZH who is constantly laying down age-related smack on how old people can't understand the unicorn-crapping-skittles that is bitcoin.

fonestar's picture

fonestar is dated back close to UNIX epoch time, outdates the first BBSs and even he grasps Bitcoin.

Prisoners_dilemna's picture

PD's word choice was poor to be sure

What PD should've said was

Some dogs cant learn new tricks, so they bark out what they know

outamyeffinway's picture

Netscape=Firefox

BTC=FutureCoin

Apples=Oranges

BitStorm's picture

Sad panda.

How does it feel that the bastard stepchild crypto "Litecoin" passed silver, and is now over 30$?

All negative ratings for you, sad panda.

Skin666's picture

Marginal Utility.

 

Utility is determined at the margin.

 

See Carl Menger for further reading

Prisoners_dilemna's picture

I dont think you included the concept of scarcity in your calculation though.

Water has high utility but it is not scarce. And I suggest that if water is scarce then it will command a higher price relative to prices where water is plentiful.

Value and price are connected but the 3rd factor is how scarce is the item.

Rolexs are more scarce than air and water. So I will pay more for my watch. Anyone can get air. Why would I pay you for air. But I will pay you for that rare rolex watch that not every one else can have.

And I'll pay for the model that comes with the rolex and get bj's!

I'll pay for that!

oddjob's picture

The price of muscle cars has nothing to do with use and more to do with cheap HELOC's.

Bunga Bunga's picture

So the number of nodes and the hashing power of the network doesn't matter? It's like saying in 1875, we would get millions of competing phone networks.

Occident Mortal's picture

Actually the greater the hashing power of the Bitcoin network the more WORTHLESS Bitcoins are.

 

fonestar's picture

Wrong.  If Bitcoin was worthless we would see the price in dollars falling.

Occident Mortal's picture

Then you must believe fiat money is not worthless either.

Buckaroo Banzai's picture

Of course not. As long as people keep using it, it has real value. Of course, it has much MORE value to the people who print it. And LESS value to the people who are forced to accept it.

Remember: the more they print, the more it is worth to the printers, because they use it to steal from you.

fonestar's picture

Because I don't agree with it does not make it worthless.  It will become worthless but in the meantime you can still trade it for things of value.

Kirk2NCC1701's picture

fonestar, I'm somewhat puzzled at your ardent and almost incessant "promotion" of bitcoin, but not in your response to me in wanting to buy some from you.

Where exactly is your angle or profit in all this "Jelling" if you're not literally "Selling"?  Kindly RSVP.  You have my email address.

fonestar's picture

Hey sorry for not getting back to you!   I have multiple emails and don't check that one often....

chemystical's picture

the salient difference is that a million competing phone networks have significant barrier to entry.  for practical purposes cryptocurrency has none.  perhaps the OP might have temporarily satisfiued you by adding that Btc's value rests primarily on brand but also on network. 

The value of the network, however, is practically nil because it is not proprietary.  A million competing phone companies cannot build or lease the required infrastructure network for free (else you'd have your own, and I'm quite certain that you do not own a satellite or thousands of cell towers or relays etc). 

Cryptocurrency networks, on the other hand, rely almost solely on the end users to establish a network.  (A network without nodes is a voice in the wilderness).  Hence, non-proprietary, hence no barrier to entry when competing for YOU to participate in and thusly enhance THEIR network.  Well, no barrier except for...brand aka hype aka marketing. 

The winner that emerges in the near term (if indeed one emerges) will be the one that has the most sucessful marketing.  The OP was spot on.

Buckaroo Banzai's picture

Nope. Your premise is faulty. The internet is not proprietary, yet we can all agree it is incredibly valuable to those that use it.

chemystical's picture

with all due respect, your reading of my post was faulty. 

nowhere did i mention the internet.  the network to which i referred (and stated more than once) is the network of users.  HOW they network is irrelevant to the thesis.  Merchants and buyers can use carrier pigeons and smoke signals for all I care.  That was not the point.

Your argument requires that I implied or stated that the internet is the ONLY way for them to network. 

What IS non-proprietary is cryptocurrencies themselves on a practicable level.   THAT was my argument.  Apologies if that was not clearer.  

Yes, I'm aware that some cryptos have been granted patent.  I've read a few of the patents, and don't see anything that excludes other cryptos from imitating Btc dowen to the finest detail.  In fact I lunched last week with one of our IP counsel and she didn't believe that the patents I showed her were even enforceable.  As the holder of significant IP from a previous life, the licensee of a few more, and the assignor (regretably for my wallet) of dozens more, I'm well aware that being granted a patent is one thing, and that prevailing in an infringement case is another thing altogether.