Banks’ centralized digital tokens have come under fresh criticism from cryptocurrency experts and Max Keiser.
In a Twitter exchange yesterday, Keiser praised the perspective of computer scientist and Bitcoin enthusiast Datavetaren, who reiterated the vulnerabilities non-decentralized schemes face.
Datavetaren’s hacking example “demonstrates why centralization (single point of failure) prevents state actors from effectively competing with Bitcoin,” Keiser said.
Central banks in several countries have expressed particular interest in creating controlled digital tokens for a variety of uses.
The People’s Bank of China has extensively researched the concept and began testing a prototype last week. Meanwhile, Russia’s central bank is keenly assessing the implementation of the so-called ‘Russian Bitcoin’ which would also be strictly centrally managed.
Against this background, Datavetaren drew stark contrasts to Bitcoin’s inherent security model prohibiting such tokens entering the market.
The global banking industry itself is also grappling with the pitfalls of security, especially regarding the so-called ‘distributed ledger technology’ championed by groups such as the R3 CEV consortium.
Often hitting the headlines for the wrong reasons, the notionally Blockchain-focused group has been shedding high-profile members since last November.