Federal Reserve's Ignorance of the Subject is Appalling
With the bitcoin blockchain being used as the trust anchor for more and more business applications it is astonishing that an official would say it has no use other than speculation and money laundering. What the bitcoin skeptics like Quarles are ignoring is that the same security mechanism that prevents tampering of bitcoin value transfers provided by the mining network can also be used to prevent tampering of any data. Many applications have been created to exploit this feature to authenticate easily forged documents like diplomas and certificates of origin, or to secure external private blockchains.
The killer app for bitcoin as a trust platform is the Microsoft ION project which uses the blockchain to authenticate millions of personal ID accounts of private citizens. ION is a totally decentralized ID management system that was developed to allow users to use a single ION ID in place of a userid/password for logon credentials anywhere on the web.
But whether the Federal Reserve remains clueless about bitcoin or not their opinions will have no effect since the courts will never allow federal regulators to harm a network that secures the personal ID information of millions of Americans.
Biting the hand that feeds IT
