With decentralisation you can lose accountability. It’s far easier to blame/complain on say an official government backed project.
I think it’ll be a while before the average person on street understands what blockchain does, to most they simply don’t give a ■■■■. I mean most people trading atm dont really understand what they are buying.
If you went up to someone and said what you thought about EIP-1559, you what?
A lot of people struggle with banking and finances as it is.
People don’t understand decades or centuries old central banks monetary economics.
Hell, people don’t understand what money is and why it’s important to have control on money supply, money velocity and the role money has in the economic growth (see link below) (and other relevant issues, e.g. monetary policy transmission channels, AML/CTF, country’s balance of payments system, capital controls about the movement of capital across national borders), besides the average Joe I’m also including the crypto evangelists.
All mention the money manipulation by central banks and the end of fiat currencies (something like the conspiracy theories in financial markets with stocks manipulation), but in the end, it’s only conspiracy theories based on ignorance and/or biased opinion as they have personal interest in cryptos (disclaimer: I have a MSc on Monetary and Financial Economics, although I have mix feelings about central banks/monetary economics, I think that they have an important role, but I hate to much central control, I’m a bit liberal).
It’s important for every country to have economic sovereignty. Just imagine how US, UK or Euro Area would fight recessions or economic shocks, if they have a foreign currency (no matters if it is a “normal” public-issued currency or a private-issued currency) in a parallel circulation within their borders, with a lot of volume. Their monetary policies would be less effective to fight the downturn effects on the economy and to relaunch the economies.
We already saw a lot of economies (countries), that have pegged currencies to hard currency (usually USD) that suffer economic spillovers on their national currencies and economies, when Fed says or do anything. Some investors do arbitrage on that, to exploit the discrepancies, mostly front-running the currencies with pegs.
Sure. I’d love that too. Though I’m of the opinion that a bank of government won’t give a damn about what crypto enthusiasts think. If it is beneficial to operate a CBDC, they will. Once there is money to be made from that, I imagine even the most devout crypto enthusiasts will pile in.
There is nothing to stop cryptocurrencies such as Bitcoin existing alongside CBDCs also for the die-hard decentralised fans.
I don’t think there will be any need for people to do anything from a technological point of view. To get adoption it’ll happen in the background. As you said yourself, you use digital fiat now. As do I - I hate carrying coins and paper cash now. It wouldn’t be beyond feasible to link the digital fiat to a CBDC.
The more I learn about finance, economics, investing, crypto etc., the less I know what the hell money is.
Money is a simple thing, is a token (physical or digital) that allows exchange of goods and services (medium of exchange) but must be accepted by both parties (buyer & seller), must be an unit of account (quantifiable) and must have a stable and retain value (store of value). Other characteristics, portability, fungibility, durability, divisibility.
Money exists since some thousands of years. It had several representations, stones, sea shells, gold, silver, copper, diamonds, precious stones, wheat, livestock, etc. The digital/crypto currencies are the next step of evolution.
Money must be controlled, mainly for inflation reasons (economic growth), this can be done by several ways (conventional monetary policies, e.g. interest rates, bank legal reserves, open market operations and unconventional monetary policy, e.g. QE). International trade is also important (but secondary, or somehow is unofficial, countries generally don’t announce that they manage their currencies to have an advantage in international trade, so they can’t be labelled as a currency manipulator, and to avoid currency wars).
So the question will be how to control and who control it?
In the past, was the ruler (pharaohs, emperors, kings, nobles, politicians) who control the money issuance, and they all mess up. They fall in temptation to issue more money to pay their public debt or raise more money, so the money were devalued (e.g. debasing gold/silver coins), creating inflation and bad rep to their currency (losing acceptance).
Banks also created money with the deposit & lending activities (fractional reserve banking), and guess what, it happened too much money creation, created inflation and economic impacts. Also several private issued currencies, with various degrees of acceptance, mostly due to the bank credibility (financial situation of the money issuer).
The central banks were the solution created to separate the power of money creation from the governments. It’s an attempt to have an independent and knowledgeable entity that control the money. And to control the money creation done by banks.
Central banks perform also an important role, as the lender of last resort, especially for bank runs situations and economic shocks, to maintain the money liquidity in the market (between banks but also in the real economy).
Commodity money, like gold coins, were based on the intrinsic value of the commodity value. Fiat currencies are based on the taxes collected and other forms of income received by the governments, it’s revenue-based money, meaning that the money value is dependent of revenues earned by the issuers (commercial bank created money fits in this definition, as revenue-based money issuers).
In the end, central banks must increase or decrease the money volume (money in circulation) to help the economy (cheap borrowing or expensive borrowing, helping this way to manage the inflation, unemployment, economic growth, exports/imports). Money is simple concept but an extreme useful economic tool, but in right hands. It can be even used as a weapon.
Yep, you confirmed it for me. As I said, the more I learn the less I realise I know. There is no way I know the details of how monetary policy, interest rates, legal reserves, open market operations, unconventional monetary policy, international trade, debasing, portability, fungibility, durability, divisibility, economic shocks, money liquidity, market economics between banks, whatever the hell the ‘real economy’ is, taxes, revenue based money, commodity value, issuance and issuers, inflation, economic growth, international exports and imports, borrowing and lending, or central banks work.
The central banks are unofficial governments inside a country. Usually, the public powers include the executive, legislative and judicial. The media like to say they are the 4th power. But everyone forget the monetary power, done by the central banks.
I even think that central banks have more power than the political actors. What is more powerful the fiscal policies or the monetary policies?
Just an example, who saved US in the GFC?
Mario Draghi with some words spoken in 2012 saved the EUR and Euro Area countries during the European sovereign debt crisis. It wasn’t the politicians…
Central banks react more rapidly to economic shocks than the bureaucrats and politicians.
No one knows everything. But I bet that you know something about what you wrote, maybe not by the lingo, but how it works. E.g. “fungibility” is the opposite characteristic that NFTs have.
For example, I also didn’t know what was EIP-1559 until @phildawson mentioned it today, I went to Google for a quick research to get the basics. Although I don’t know IT details, I think that I grabbed the theoretical objective behind it.
Euro Area/ECB officially announced their CBDC, a “digital euro”:
ECB makes big move towards digital euro, says better than Bitcoin
Jul. 14, 2021 8:26 AM ET
“The Governing Council of the European Central Bank has decided today to launch the investigation phase of a digital euro (NYSEARCA:FXE) project.” That opening line from a just-released statement is bureaucrat-speak for the ECB is going to create a digital euro . The “investigation phase” is set to last 24 months, and the press release indicates that a digital euro will complement cash, not replace it.
The release also discusses Bitcoin (BTC-USD) and the concerns around energy usage, noting the environmental friendliness of the digital euro vs. the most popular cryptocurrency.
The digitalization of society, economy and finance have good things but also gives totalitarian control to some, it could be governments or private entities. Probably atm, the BigTechs have more data than governments.
The COVID-19 is an excuse for governments to have more control on their citizens. And also when terrorist/criminal event happen, the securitism takes one more part of our rights and liberties.
In many ways it will in terms of automation and auditing of services ultimately seeing improvements in time costs and speed of services relating to taxes, inheritance, financial terrorism, anti-money laundering, KYC, issuance/settlements etc etc.
Of course there is a trade off in that your data will be available for use. Though that is the case now also, it is just more disjointed.
Grayscale, the US crypto trusts issuer have the following underlying cryptos (before anyone asks them to be added to T212, these crypto trusts are only available to US accredited/institutional investors) :
Basic Attention Token
Bitcoin
Bitcoin Cash
Chainlink
Decentraland
Ethereum
Ethereum Classic
Filecoin
Horizen
Litecoin
Livepeer
Stellar Lumens
Zcash
@phildawson, some “new” crypto, like BAT, MANA, Ethereum Classic (ETC), Horizen, Livepeer. (They also have Zcash, privacy coin.)
They don’t have some of the most known and with most potential, e.g. Polkadot, Cardano, Solana.
If you were to evaluate this company, how you do evaluate their choices of the underlying cryptos? Going after the buzz or crypto experts?
21Shares criteria (quoted cryptos), seems that they are going after the majors (market cap)
cheers, just did the clover one, graph one done ages ago. yeah the wrong answers are laughable sometimes, “what is clover finance used for?” “virtual reality games?” , "clover finance can increase usefulness and accessibility of what? “dogecoin?”
