Digital Currency Coming to Canada(MintChip)

This is somewhat of a duplicate post, however the original was in a religion forum and seemed to emphasize on the "Mark of the Beast". It is not really of relevance to discussing the world economy which is why I started a more detailed thread here so that we can stay on topic.


First to bring up an old story... As many of you know the Canadian Penny is being taken out of circulation. Initially they are going to stop making the coins, and then the Banks will start removing them from circulation to be melted down. The argument being that the materials used to make the coin are of higher value than the coins currency value. While this is true it is not because the metals used became more valuable, it is because inflation has devalued the currency itself. Inflation rises every year and like interest the effects are compounded, so the more inflation that occurs the faster it occurs. This essentially secures the fate of both the Loonie and the Toonie since one day their materials will again be worth more than their currency values.

The new story is that it appears the Finance Minister has a spin off campaign in the works... The Royal Canadian Mint will be issuing an electronic currency. They reached out to software developers and hackers like myself to assist in creating a prototype. As the article says the news was "Quietly Released", since all they needed for now was to fill 400 job openings.

See full article here: Source

Just to perform a quick analysis of the article above, here are quotes and some of my comments.

Still in the research and development phase, MintChip will ultimately let people pay each other directly using smartphones, USB sticks, computers, tablets and clouds. The digital currency will be anonymous and good for small transactions — just like cash, the Mint says.

Anonymous digital cash to my knowledge is not possible. It is likely that your information will be anonymous to the vendor, but obviously the vendor must be able to establish some kind of trust with the buyer so at some level the Canadian Mint will need to approve any exchange of money. Which means you won't be anonymous to the government.

To make sure its technology meets the gold standard in a world where digital transactions are gaining steam

Very ironic comment considering the abandonment of gold standard is arguably the root cause of the financial crisis. Someone at the Mint obviously has a sense of humour...

There’s been a very huge growing digital economy that is really going to be fueled by smartphones and mobile being the next big thing

This is true, but I don't see the relevance to currency. Are they trying to imply our current economic system is outdated? Who makes that decision, and where is the supporting argument?

Interac, Mastercard and Visa already have contactless cards that use near field communication (NFC) chips for small payments at gas stations and grocery stores.

PayPal, Google and Visa have introduced digital wallets where consumers control all their cashless payments from one place. Companies Square and Payfirma let people accept credit card payments on their smartphones.

So essentially the Mint is going to offer the same exact service except that instead of a private corporations/banks being in charge of your money, the government will be in charge. Aside from the government being in control of personal finances, they will be directly competing with private sector. Can't wait until the Mint starts offering loans..



Although I am not surprised, I am still a little confused and I will tell you why.

First we know that the Canadian Government doesn't borrow money from it's own central bank. The gov borrows all money from private banks at high interest even though they could borrow from central bank at 0 interest. It has been this way since Brian Mulroney. So we are sitting somewhere around 500 billion dollars in debt and every year we pay off part of the interest without paying off the principal. It is clear that the banks are seriously benefiting from this and that the Government is showing some kind of favoritism.

We also know that the Canadian Mint is a for profit crown corporation. The fact that it is for-profit means it is in business to make money even though it is public sector. Also, we know all Crown Corporations except for 'Bank of Canada' are technically owned by the British Monarch. So to clarify further Crown Corporations are technically private sector since they are owned by a royal family. Currently there is very little intervention if any between the Monarch and these corporations, so there is still some ambiguity in regards to ownership. Other than the Bank of Canada(The only real taxpayer owned corporation) seeming to get sidelined whenever the government needs a loan.

So to summarize we have the government indirectly using inflation to push the agenda for digital currency, clearly giving favoritism to private banks over the central bank, and at the same time using a so called public corporation that will in effect be competing with certain services of these private corporations. So if they really do favor the private banks, then why are they trying to compete? Somehow I think the private banks are going to benefit greatly from this even though it is not immidiately apparent.

I'm afraid I will have to disappoint everyone though, because I don't know what any of this really means other than being very suspicious. I am hoping another ATS member with more knowledge on these matters can give more insight. This is largely my own opinion and conclusions other than the news article, so please correct any errors or assumptions I have made.

Just thought I'd add there's little to fear at this point. The Switch network went down in the UK for the 2nd time in 18 months the other day. Google Wallet was proven highly insecure by a digital forensics firm the other month.
To summarise, the cashless payment technology's nowhere near ready to replace cash yet.

By the way, without referring to scripture (which is not a valid source on electronic payment technologies), could you explain what this has to do with 'marks' and 'beasts'?

I for one am against a digital currency as it appears that only corporations and governments truly benefit from this system. Not only does it force both deeply into the pockets of the average citizen relinquishing an individual's privacy, it also eliminates any means of untraceable transactions between citizens. Both the corporations and governments will know exactly what, when and where you spend your money and ultimately be judge and jury on your ability to access and spend funds. That's not even getting into the data potential for marketers or how transactions for goods or services can be completed in a situation where power is out or the system is compromised either through criminal hackers or terrorists.

Also, I thought it would be good to make a distinction between American Central Bank and Canadian Central Bank.

The Federal Reserve in the USA is a private owned bank, and that is the root of most economic issues in the USA in my opinion. The American Government borrows much of its money from the Fed at high interest.

In Canada the situation is similar but less obvious. Our Central Bank is owned by the people, however the Government continues borrowing from private banks anyway.

Originally posted by XeroOne
Just thought I'd add there's little to fear at this point. The Switch network went down in the UK for the 2nd time in 18 months the other day. Google Wallet was proven highly insecure by a digital forensics firm the other month.
To summarise, the cashless payment technology's nowhere near ready to replace cash yet.

Perhaps, but they are still going to try. It is an official press release so there is no conspiracy. If it is going to be unreliable that is only one more reason to shut it down. It seems like something that should be discussed in Parliament and certainly is not getting enough media exposure.

Originally posted by XeroOne
By the way, without referring to scripture (which is not a valid source on electronic payment technologies), could you explain what this has to do with 'marks' and 'beasts'?

It doesn't, that's why I started a new thread. There is a thread in the religion forum discussing MintChip as the mark of the beast. And even being a Christian I knew I wouldn't be able to engage in a proper debate if I had used that thread. I only made that initital comment so moderators would understand why I started a new topic.

Originally posted by centrifugal

Originally posted by XeroOne
Just thought I'd add there's little to fear at this point. The Switch network went down in the UK for the 2nd time in 18 months the other day. Google Wallet was proven highly insecure by a digital forensics firm the other month.
To summarise, the cashless payment technology's nowhere near ready to replace cash yet.

Perhaps, but they are still going to try. It is an official press release so there is no conspiracy. If it is going to be unreliable that is only one more reason to shut it down. It seems like something that should be discussed in Parliament and certainly is not getting enough media exposure.

You're right that not enough people are discussing it, but I doubt it could go through anyway. The banks stand to lose a f*ckton of money if it goes wrong, which was the core reason Google Wallet wasn't (probably still isn't) secure, and the banks themselves don't trust the technology.

The proof of this was the dispute between Google and certain banks over where account details should be stored in NFC-enabled smartphones. If those details were stored in the phone's 'Secure Element' (basically a special chip), the banks would have been totally liable for whatever losses due to fraud, because they were guaranteeing its security. If the details were stored in an SQLite database for the Google Wallet application, the liability shifted to Google instead. As it turned out, the account details in the trial were indeed stored in the SQLite database in plaintext, so anyone could nick the phone and acquire that information.

As for every other payment made with Chip and PIN, could you imagine the amount of chaos when one of the networks goes down? It does happen on the rare occasion, for hours at a time. That could bring an economy to a standstill, if there was no proper cash to fall back on.

There are also liability matters related to the Chip and PIN technology, as the banks are totally liable for losses and thefts resulting from security failures in the technology itself. One case, several years ago, involved a bank that refused to refund the losses, because they insisted the electronic system was too secure to get hacked, and therefore the customer must have been at fault. If I remember correctly, the bank lost a string of such cases.

It doesn't, that's why I started a new thread. There is a thread in the religion forum discussing MintChip as the mark of the beast. And even being a Christian I knew I wouldn't be able to engage in a proper debate if I had used that thread. I only made that initital comment so moderators would understand why I started a new topic.

It just really sucks when the evangelists start swarming over the issue, pulling endless quotes from scripture which really don't address the huge number of legal and technical issues around their 'Mark of the Beast' thingy.

reply to post by XeroOne


Maybe the Canadian governments solution to that problem is to assume all liability itself. For some reason governments seem to insure and encourage risky behaviour. So if there is a problem and taxpayers lose money through theft, they can get bailed out by the taxpayers... It's brilliant.

Originally posted by centrifugal
reply to post by XeroOne

 

Maybe the Canadian governments solution to that problem is to assume all liability itself. For some reason governments seem to insure and encourage risky behaviour. So if there is a problem and taxpayers lose money through theft, they can get bailed out by the taxpayers... It's brilliant.

Now that's a very interesting thought... Quite plausible as well. They're left with the problem of an exponential increase in e-Crime, and a load of other crimes facilitated by identity fraud.

Originally posted by XeroOne

Originally posted by centrifugal
reply to post by XeroOne

 

Maybe the Canadian governments solution to that problem is to assume all liability itself. For some reason governments seem to insure and encourage risky behaviour. So if there is a problem and taxpayers lose money through theft, they can get bailed out by the taxpayers... It's brilliant.

Now that's a very interesting thought... Quite plausible as well. They're left with the problem of an exponential increase in e-Crime, and a load of other crimes facilitated by identity fraud.

I'm anticipating the day the MintChip database gets hacked by 'Anonymous'. After all anyone can be anonymous even the government. Whether they hack themselves or get hacked through pure incompetence we would be on the hook.

I heard reports recently that the new plastic bills are melting in the high temperatures this summer. This is the Canadian Mints latest acheivement. I'm sure they got the digital currency under control though, so long as they install air conditioners in the data centers.

reply to post by XeroOne



If the government did take on the liability and e-crime grew exponentially and identity thefts increased...all the easier to pass legislation suppressing an individual's right to privacy on any internet related device while also increasing police budgets to staff for the growth in crimes..win win for them.

reply to post by centrifugal


Don't forget about the change in weight to the recently minted loonies and twonies that subsequently forced private vendors and municipalities to changes all their coin operated machines and meters!

I'm anticipating the day the MintChip database gets hacked by 'Anonymous'. After all anyone can be anonymous even the government. Whether they hack themselves or get hacked through pure incompetence we would be on the hook.

I heard reports recently that the new plastic bills are melting in the high temperatures this summer. This is the Canadian Mints latest acheivement. I'm sure they got the digital currency under control though, so long as they install air conditioners in the data centers.

The real scary thing is it doesn't have to be Anonymous targeting a data centre. A threat assessment on a system like that would produce numerous different scenarios, involving different threat agents and points of entry into the system, and even a variety of outcomes ranging from terrorism to the trading of indecent images.

Remember the TK Maxx thing a few years back when criminals literally lifted customers' card details off the wireless network? Organised criminals have gotten way smarter since then, and some are even capable of redirecting transactions by intercepting system calls between Windows and Internet Explorer.
Of course, it's also possible to compromise an entire company and raid its bank account using similar methods, if you know what you're doing.

If the government did take on the liability and e-crime grew exponentially and identity thefts increased...all the easier to pass legislation suppressing an individual's right to privacy on any internet related device while also increasing police budgets to staff for the growth in crimes..win win for them.

They could pass all the legislation they want. As it stands, the criminal hackers are running rings around law enforcement and 75% of security professionals. The intelligence agencies are only beginning to develop the capabilities to deal with this.