INTERESSANTE PUNTO DI VISTA - ANCHE SE LA VISIONE ' ANCORA PARZIALE - IL MO NDO CRIPTO E' MOLTO DI PIU'
Cryptocoins Will Create Trillions in New Credit and Make the Economy Boom
Technology Innovator and Investor
Something
astounding is happening right in front of us. A new credit system is
emerging and it's under the control of....no one. It's growing by leaps
and bounds and putting credit into the hands of the people directly
without the need for a middleman. People are feeling hope for the first
time in years. Cryptocoins are offering people a clear choice, a new
future that they had only dreamed of. Nothing is forced on anyone, no
one is forced to accept these new coins. The coins could go to zero and
you could lose everything -- people know that, but they also know what
they are getting from what they have in their pocket right now. So far
it's already created quite a few millionaires and probably a few
billionaires and if current trends continue, it will have exponential
growth.
What we call money is actually credit that is created by banks when
they lend money -- it is someone's debt!
Deposit $1,000 in a bank and
that bank is legally able to lend out $9,000. Where did the $9,000 come
from? It was created out of thin air and someone has to pay it back,
with interest, so new credit has to be constantly created to pay the
interest or the system will implode.
Charging interest for something
that doesn't exist is the definition of usury. That $9,000 is spent into
the system, just like money. The "money" in circulation is actually
someone else's debt, therefore it's a form of CREDIT! This is of course
perfectly legal, as long as a bank is doing it.
Crypto coins, on the other hand, are created in two ways, they can be
issued by mining; coins are generated all at once in the beginning or
self-issued through a mining process over time (like Bitcoin). They can
also be "forked", where an identical copy of a coin is created with a
new name and the total coin supply is immediately doubled. Creating a
new coin from cloned code is simple as well -- there are many
derivatives of Bitcoin that have minor code changes, these include
Litecoin, monero, and many others. For these reasons, the supply of coins
will grow exponentially. Each coin can have different features, some
have low inflation, some have zero inflation. Some have privacy
features, other coins offer fast transactions. There are thousands of
coins.
With a cryptocoin, there is no debt possible -- it's impossible to
have a negative balance in a blockchain -- therefore cryptocoins are
truly a debt free system of exchange. A coin doesn't really exist in any
physical sense, it's a private key that can access a ledger entry and
transfer any value to another ledger entry. It's a form of
communication, there is a sender and receiver, the only difference is
the message contains something of value that unlocks something else.
While creating coins is easy, making them valuable is not so easy.
What makes a coin valuable? People need the coin to do something, it has
utility because it is needed for some function like storing a file on a
computer or using a service, or it can be exchanged for other coins.
People have to want a coin. Bitcoin currently has the greatest marketcap
and utility because it's needed to purchase virtually any other
cryptocoin on exchanges. Like buying oil, you'll need dollars and if you
want to buy any of the thousands of cryptocoins, you will need Bitcoin
and that's Bitcoin is currently number one.
The supply of something and it's value are not necessarily related,
it's possible to create synergies from creation of additional coins and
substantial value is created. The recent fork of Bitcoin into Bitcoin
Cash is a perfect example. A blockchain fork is when an exact copy is
made of a blockchain and then software is updated and presto! a new
version of that blockchain and coin are created -- the supply is
doubled. If you owned a Bitcoin on August 2nd, 2017, you automatically
owned a Bitcoin Cash coin. There were roughly 16 million Bitcoin Cash
coins, an exact mirror for the number of original Bitcoins. Because the
software update was successful for both coins, at the moment of the
fork, there was an instant creation of several billion dollars in value,
because Bitcoin went up a bit and Bitcoin Cash traded as high as $800,
it currently has the #3 marketcap at $8B. In this case, 1+1 does = 3.
Not just anyone could pull this off, all the Chinese miners and
exchanges and many exchanges around the world supported Bitcoin Cash.
Because of the value creation, exchanges were forced to carry Bitcoin
Cash, which was something fun to watch the exchanges that originally
didn't want to support the coin scramble so their users wouldn't sue
them for the coins. Rumors were that up to $20 billion of Chinese state
funds were available to promote and ensure success for Bitcoin Cash and
the Chinese Ethereum coin NEO. Those are two coins worth watching, I own
them both.
ICO's are an efficient way to promote coins, finance technological
development and rapidly build coin value. ICO's make use of a value
creation loop where people who own appreciated cryptocoins like Bitcoins
and Ethereum invest their appreciated coins into a project to buy new
coins typically issued at a discount. The cost basis in these
appreciated cryptocoins creates a gambler's winning edge because losses
to these participants are a tiny fraction of the face value of the coin
being invested -- they paid a small fraction for the coin they are
investing. They keep all the gains, but the losses are not directly out
of pocket, they are merely lost opportunities. This is creating
exponential credit into the cryptocoin system as new coins finance new
coins and this will continue until investor returns diminish with
oversupply or bad deals. This has quite a way to run if you believe my thesis that there is another $1 trillion entering the cryptocoin asset class in the next 18 months.
Contrast the issuance of cryptocoins to the credit banking monopoly
currently enjoyed by nearly all the world. All systems have what I'll
call the First Coin Problem. How do you determine who gets a newly
issued coin? With Bitcoin, the people who do the work mining and
securing the network get the new coins -- that seems fair. With an ICO,
the coins are issued via an auction process and to the founders, like
options at a tech company, they have to work to get coins. It's not so
clear how the central bankers issue their coins and who gets to spend
them first. If it costs just over a dime to print a $100 bill, someone
is getting $99.90 in free value when new bills are first spent. In an
economy that is completely reliant on credit, whomever gets the First
Coin has a significant competitive advantage.
As Senator Bernie Sanders discovered in the aftermath of the 2008 banking crisis, the U.S. Federal Reserve Bank lent at least $16 trillion to other multi-national banks and corporations. The full GAO report is HERE.
This is probably the tip of the iceberg -- you can be sure the owners
of the central banks will take care of themselves, their banks and
companies, as well as their government clients.
Issuance of credit by anyone is an exciting idea to entrepreneurs and
individuals, but not everyone sees it that way. Neel Kashkari, an
American banker and politician who is also the president and CEO of the
Federal Reserve Bank of Minneapolis, said:
"The problem I have with bitcoin is while it says by design that you’re limiting the number of bitcoins that can be created, it doesn’t stop me from creating Neelcoin, or somebody from creating Bobcoin or Marycoin or Susiecoin."
That's exactly the point of Bitcoin, to put the power of credit
creation back into the hands of the people. No one is forced to accept a
Neelcoin, Bobcoin, Marycoin or Susiecoin, they are not legal tender
fiat currency and they might fill the need of a tiny niche that no
banking system cares about. I might have a personal relationship with
Bob or Susie and I want to support what they are doing by accepting
their coin for work or trading things. Convincing others to accept your
coin is not easy, a lot of hard work goes into establishing a network of
people who use a cryptocoin after all.
A friend told me about a dream she had. "There was a mountain of
giant gold coins that were pouring away from the bottom. Above this
mountain was a giant red shield protecting it, but the red shield was
shattered." Maybe the red shield really is shattered and now is the time
for cryptocoins to shine.
INTERESSANTE PUNTO DI VISTA - ANCHE SE LA VISIONE ' ANCORA PARZIALE - IL MO NDO CRIPTO E' MOLTO DI PIU'
Iscriviti a:
Commenti sul post (Atom)
Nessun commento:
Posta un commento