The Federal Reserve Publishes Another Paper on Bitcoin
The Federal Reserve Bank in Washington, D. C. has issued a report entitled Bitcoin: Technical Background and Data Analysis. The recently released report, dated October 7, is a technical analysis of Bitcoin and the Bitcoin protocol. While mostly accurate, it contains a number of assumptions and self-serving statements suggesting that, despite a great deal of empirical research and terabytes of data, the Federal Reserve lacks a fundamental understanding of Bitcoin.
Lack of Understanding
One of the first indications of their lack of understanding can be found in section two, entitled ‘Bitcoin: an Overview,’ by researchers Anton Badev and Matthew Chen. In defining Bitcoin, they say:
‘In essence, a bitcoin is an electronic token without reference to any underlying commodity or sovereign currency, and is not a liability on any balance sheet. Owning bitcoins amounts to nothing more than having the ability to move these bitcoins in the Bitcoin ecosystem … . As such, a bitcoin has no intrinsic value.’
This post was published at Coin Telegraph on 2014-12-29.