Bitcoin and Blockchain - Bretton Woods 2015 White Paper Released

Rage Review : The Bretton Woods system should be known to anyone who has a little knowledge of financial history. This white paper mainly discusses the history of blockchain technology since Bitcoin, as well as the market development goals and suggestions for Bitcoin and blockchain technology. In particular, from the perspective of consumers, five development goals are proposed, which are worth learning from. From the perspective of the white paper contributors, there are many senior personnel and institutions in the Bitcoin and blockchain industry, so the potential risks and threats in the industry are deeply analyzed.

Translation: Li Qingnan

The Bretton Woods System 2015 White Paper was released at the North American Bitcoin Conference held in Miami, USA on January 21 and 22.

The white paper provides a comprehensive study of the history, circulation status and prospects of Bitcoin and blockchain technology. The report was released by Joe Colangelo, executive director of Consumer's Research, an organization authorized to conduct the study.

The Bretton Woods 2015 White Paper is named after Mount Washington in Bretton Woods, famous for the fact that the path of the US dollar was set there in 1945. The White Paper provides information about the opportunities presented by Bitcoin and blockchain technology, the obstacles facing the industry, and provides an insight into how the Bitcoin industry views digital currencies and the technology that underpins them.

The white paper closely follows the evolution of Bitcoin from Blockchain 1.0 to Blockchain 3.0. Blockchain 2.0 is the extension of blockchain technology in financial business, and its applications cover financial institutions, financial instruments and smart contracts. Blockchain 3.0 includes emerging applications in the industry, in addition to banking and fintech. Bitcoin 3.0 includes the use of blockchain technology in record management, intellectual property management, education and government. At the same time, the Bretton Woods 2015 white paper also includes content related to various aspects of the comprehensive development of these three forms of technology. Some topics - including the stage of development, funding, and regulations, all have a direct impact on its implementation.

The Bretton Woods 2015 white paper describes five goals of blockchain technology:

1. Efficiency

2. Consumer choice, connectivity, privacy and protection

3. Transparency

4. Direct self-management

5. Human Capabilities

For each goal, it also lists the opportunities that Bitcoin and blockchain have to meet the needs to achieve these 5 goals.

Opportunities (as mentioned in the white paper)

Simplify the transaction process & improve the exchange process

Simplifying financial services regulation

Facilitates microtransactions, smart contracts, identity issuance

Proof of Smart Property Holding

Liberating capital through tokenization

Achieve efficient, effective and transparent management and resource allocation

Effective provision of public goods and management through collective action

Strong financial accessibility

Along with opportunities come threats, which, if not dealt with, will affect development. Threats can be simplified as follows:

Overly onerous regulations, including strict anti-money laundering and KYC (know your customer) rules, have been introduced in New York State for a license, the Bitcoin license. Worse still is the irreversibility of Bitcoin transactions, which regulators see as a lack of consumer protection.

Traditional financial institutions and banks view Bitcoin as a threat to them, which is actually a threat to Bitcoin itself. These institutions always lobby against electronic money and bring new restrictions to the development and innovation of the Bitcoin industry.

Based on various factors, the threat of the Bitcoin community abandoning the digital currency is also looming. The white paper believes that there is a 50% chance that this will happen. All of the above-mentioned threats could lead to this situation.

Bitcoin’s volatility could cause it to be disproportionate. According to the white paper, Bitcoin’s volatility is likely driven by vested hoarders (referred to as whales) who could suddenly liquidate enough Bitcoin to cause the currency to collapse.

The misuse and circulation of Bitcoin technology by bad actors (such as Bitcoin and its Silk Road collaborators, which took advantage of Bitcoin’s brand and used it as a currency for the deep web and crime) can also be harmful to the Bitcoin ecosystem.

Recommendations of the Bretton Woods 2015 White Paper

The Bretton Woods 2015 White Paper calls on all organizations, namely the Bitcoin community, governments, individuals, public institutions and companies to be more inclusive of Bitcoin. It calls on all stakeholders to work together rather than against each other. At the same time, the White Paper strongly urges governments to relax restrictions on Bitcoin and blockchain, while urging developers, entrepreneurs and the Bitcoin community to abide by existing rules and regulations.

If any rules and regulations are unclear, relevant parties should actively discuss with regulators to gain a clearer understanding. Any clarification announced will help the entire Bitcoin community build a clear system.

The white paper argues that the only way to deal with anti-Bitcoin forces is to develop new products and solutions that are far better than its current state. Unless a public demand is established, the industry will always face threats from existing traditional banks and fintech practitioners. The white paper further explains this through the example of Uber: Why does Uber still have the upper hand despite strong opposition? It is mainly due to its impeccable service, which is 1,000 times better than the current taxi system. It is the customers who choose Uber instead of other taxis.

To prevent Bitcoin from collapsing from within, circuit breakers could be invented like fail-safes to limit Bitcoin transactions, market makers, and asset flows to prevent “whales” from destroying the ecosystem.

The white paper offers an explanation that the most serious threats to Bitcoin come from the implementation of Bitcoin 1.0 (Blockchain 1.0). These are existing threats. However, the implementation of Blockchain 2.0 and Blockchain 3.0 also have their own existing threats, which can only be solved to a large extent through permanent and open two-way communication channels between government agencies and the Bitcoin community. Only when both parties can clarify the facts in all aspects and reach an agreement can the goals of blockchain technology mentioned at the beginning of the white paper be achieved.