191–200 of 224 posts
This statement from the Economist is basically a lie. It's like saying people trade Forex leveraged so your cash in hand is leveraged. Tether is leveraged by 3rd parties. Tether is redeemable 1to1
In my opinion, regulators have a too-big-to-fail problem here. Tether is known to be used for artificially inflating the crypto market in collusion with certain exchanges. There is a lot of documentation on this, the following two articles are a good start: https://theodoregreenbaum.medium.com/the-crypto-time-bomb-is... https://www.bloomberg.com/news/articles/2021-07-26/tether-ex... If news suddenly come out about Te…
Earlier quoted context omitted.
What's the point of that? Using cryptocurrencies frees you from the possibility of your funds being frozen or seized or even detected/associated with you. GBPCoin would be no different from using GBP on a bank account.
Using cryptocurrencies prevents your funds being frozen or seized until a couple of masked men come around and beat it out of you with a $5 wrench. Eventually, somewhere, you have to spend money or take delivery of goods or services rendered. I don't think you can buttress that.
Intellectuals should stop advocating that people be treated like children. PayPal and other e-wallets are not required to have bank charters to issue dollar-backed digital currency, and neither should stablecoins. In the wake of the 2008 financial crisis, a well-capitalized player, Walmart, which was expanding its banking activity via its Sam's Club lending, was well positioned to replace the incumbent Wall Street fi…
> PayPal and other e-wallets are not required to have bank charters to issue dollar-backed digital currency, and neither should stablecoins. Paypal actually has a bunch of state licenses. [0] Twenty-three of those are with a banking commissioner or department. [0] https://www.paypal.com/us/webapps/mpp/licenses
No cryptocurrency currently passes the test as a currency in terms of acceptance, transaction speed and stability. So if it's classed rather as a store of value (read investment) then I don't see the difference between it and other investment classes which you need to be a sophisticated investor to access. Noobs typically need protecting from themselves.
Other than acceptance, that's a rather bold blanket statement. Visa and Mastercard handle roughly 7000 transactions per second. Solana's chain (as an example) is among the highest performing and can handle north of 50k TPS. Edit: Please challenge my position and make me think. Votes are pointless, but being proven wrong is a learning experience.
No cryptocurrency currently passes the test as a currency in terms of acceptance, transaction speed and stability. So if it's classed rather as a store of value (read investment) then I don't see the difference between it and other investment classes which you need to be a sophisticated investor to access. Noobs typically need protecting from themselves.
Earlier quoted context omitted.
It's a little unclear, because (like many things in public policy) there's several putative explanations for what caused the crises, peoples' preconceived notions color which ones they favor, and it's manifestly unclear who is right. And it should be remembered that "everyone" is a perfectly plausible answer. At a broader level, there is most consensus on the idea that the key failure in 2008 was that no one--neither…
> It's a little unclear, because (like many things in public policy) there's several putative explanations for what caused the crises, peoples' preconceived notions color which ones they favor, and it's manifestly unclear who is right. I thought 2008's cause was perfectly clear: the banks all sold insurance policies on each other (in the form of credit default swaps) that they couldn't fulfill. When one bank went und…
And no, saying natural idiocy in the citizenry is to be embraced, does not simplify the issue: it was caused by natural idiocy which was enabled by lax enforcement. There are countries where your credit score matters not at all and your current ability to actually repay is analyzed.
You can fix the banks all you want but if people take stupid loans you ll never run out of ways to crash.
>Tether, has issued $62bn-worth of tokens which it says are redeemable for a dollar apiece. But of the assets backing the tokens in March only about 5% were cash or Treasury bills Cash & Cash Equivalents & Other Short-Term Deposits & Commercial Paper: Commercial Paper and Certificates of Deposit2 $30,807,654,349 Cash & Bank Deposits3 $6,282,756,692 Reverse Repo Notes4 $1,000,662,458 Treasury Bills5 $15,279,528,705 Su…
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Correct. The centralized authorities protect the economy against some failure-modes that a distributed process is vulnerable to (currency scarcities, tampering, panics, large-scale theft). They introduce other problems. Whether one thinks they introduce more problems than they fix is pretty much the defining factor on where one stands regarding the utility of fiat currencies.
I understand the point you're making, but I'd like to add that even if you accept that potentially stablecoins might avoid some problems a (politically tainted) central bank has, the issue isn't merely one of accepting that possibility, it's also one of lack of evidence and novelty. Having a bunch of private actors potentially run a huge experiment in which the economic fallout will not be born by them if it goes sid…
The experiment is entirely opt in, with no one being affected that does not choose to be.
Earlier quoted context omitted.
>>A currency is a socioeconomic compact between capital and labor, intermediated by subject matter experts (ie the central bank) and government. Currency is an asset with a particular use-case. Its consumers do not enter into some elaborate agreement (compact) in order to use it. They use it because it's useful. Currency predates the government: https://www.sciencedaily.com/releases/2021/05/210506174103.h... It arose…
Re your sciencedaily link, you are misinterpreting that in context. I suggest reading David Graeber's book Debt, the first 5000 years. He is the world authority on the topic. A short summary: Contrary to the imagined assumptions of Adam Smith, prehistoric humans operated via gift economies. This makes sense because they lived/survived in smallish tribal bands that required cooperation. This was even true of humans be…
"The study challenges this notion by introducing the concept that money was a bottom-up convention rather than a top-down regulation. Bronze Age money in Western Eurasia emerges in a socio-political context in which public institutions either did not exist (as was the case in Europe) or were uninterested in enforcing any kind of monetary policy (as in Mesopotamia). In fact, money was widespread and used on a daily basis at all levels of the population."
So it clearly argues that money originated as a bottom-up phenomena without centralized authorities. You may dispute that theory, but it's not a misreading of the link's argument.
>>Those that lived in the surrounding vicinity of the temple were required to bring contributions, eg a goat herder would bring goats. The temple would record their contribution, typically denominated in units of weighed grain.
To call that money is quite tenuous. This kind of system would have been useless with any kind of long-term trade, e.g. the trade in lazuli, tin or flint, which has been occurring since even before agriculture.
If we want to use a definition of money so expansive as to include some temple credit system, then we could look to the theories of Nick Szabo, who originated the concept of smart contracts and the blockchain.
Szabo notes that proto-money has originated independently in numerous regions, like the kula trading ring in pre-colonial Melanesia, where two independent forms of proto-money enabled long-term trade: necklaces circulated clockwise, from one island to another in the kula ring of islands, while armshells circulated counter-clockwise.
In pre-colonial America, wampun, which are shells of the clam venus mercanaria, were used as proto-money, and in fact adopted by the colonists to great enough extent that the term "shelling out", denoting spending money, originates from it.
Szabo hypothesizes that the standardized collectibles seen in various early sites of homo sapien settlement dating from the paleolithic, like the ostrich-eggshell beads from the Kenya Rift Valley dated at 40,000 B.P and the mammoth ivory bead necklace from Sungir, Russai dated to 28,000 B.P, were in fact the earliest forms of money, and that the trade-based trustless coordination that this proto-money enabled raised the carrying capacity of the environment, and enabled humans to out-compete neanderthals.
https://fermatslibrary.com/s/shelling-out-the-origins-of-mon...