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A blog on financial markets and their regulation
Richard Gendal Brown has a very valuable blog post about bank payment systems that ends with a brief discussion about Bitcoin. His conclusion is very interesting:
My take is that the Bitcoin network most closely resembles a Real-Time Gross Settlement system. There is no netting, there are (clearly) no correspondent banking relationships and we have settlement, gross, with finality.
I agree with this characterization, but would only add that Bitcoin is an RTGS (RealTime Gross Settlement) without a central bank. To computer scientists, the core of Bitcoin is an elegant solution to the Byzantine Generals problem. To finance people, perhaps, the core of Bitcoin is an RTGS that (a) is open to all (and not just the privileged banks) and (b) functions without a central bank.