‘We Welcome Anonymous Cryptocurrencies’ : US Federal Reserve Breaks Down Bitcoin in New Study

CCN reported yesterday on the Federal Reserve Bank of St. Louis's study results, presented in "The Case for Central Bank Electronic Money and the Non-case for Central Bank Cryptocurrencies."

In this report, the authors "characterize various currencies according to their control structure, focusing on cryptocurrencies such as Bitcoin and government-issued fiat money."

The diagram they present really helps to understand the dimensions of currency: physical or virtual representation, centralized or decentralized handling, and competitive or monopolized creation. This shows how bitcoin is different from existing currencies.

Each form of money has its benefits and drawbacks. This is why many forms of money coexist.

On the one hand, governments can be bad actors and, on the other hand, some citizens can be bad actors. The former justifies an anonymous currency to protect citizens from bad governments, while the later calls for transparency of all payments. The reality is in between, and for that reason we welcome anonymous cryptocurrencies but also disagree with the view that the government should provide one.
— Berentsen & Schar

We highly recommend this informing article and its associated report.