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A unit of "money" (credit) is [meant to be] a promise of something else to come later, from the issuer, that you can redeem the credit for at some point.
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For example, public services that you can receive and then cancel their debt to you by paying them your credits back in taxes. If, that is, you didn't already pass it along to someone else in the meantime for some other thing.
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For example, public services that you can receive and then cancel their debt to you by paying them your credits back in taxes. If, that is, you didn't already pass it along to someone else in the meantime for some other thing.
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How does your "money" stack up to this "credit of the issuer" model?
How does your "money" stack up to this "credit of the issuer" model?
Bottom line:
If it ain't credit, it ain't "money" - but an "asset".
If it ain't credit, it ain't "money" - but an "asset".
For example, gold was never "money".
Credit denominated in weights of gold, was money.
Gold was specie; that you could use to extinguish debt.
As just one choice of asset among many.
Credit denominated in weights of gold, was money.
Gold was specie; that you could use to extinguish debt.
As just one choice of asset among many.
As another example, BTC is not "money".
It is an "asset".
If BTC banks start up and denominate loans in BTC as a unit of account, then it will have then become "money".
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It is an "asset".
If BTC banks start up and denominate loans in BTC as a unit of account, then it will have then become "money".
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And the finite supply of BTCs in the world will have become an irrelevance, much as the amount of gold sovereigns in the world was irrelevant to the supply of "money" in the world.
And the finite supply of BTCs in the world will have become an irrelevance, much as the amount of gold sovereigns in the world was irrelevant to the supply of "money" in the world.
Just as "paper BTCs" are anathema to crypto fanboys, so "paper gold" is to physical gold advocates.
The situations are analogous, but inverse.
Gold has been derivatised out the wazoo long ago and it will collapse as it always goes.
BTC derivatisation has yet to gain traction.
The situations are analogous, but inverse.
Gold has been derivatised out the wazoo long ago and it will collapse as it always goes.
BTC derivatisation has yet to gain traction.
But it’s getting there, and there is already enough air in the bubble around the ball, to give everyone a religious premonition. https://adventuresincapitalism.com/2020/11/24/why-this-reflexive-ponzi-scheme-will-continue/
“It truly is stunning to watch the global uncoordinated pumpathon.”
“Bitcoin has increasingly been hijacked by institutional investors.”
“after the weekend fade, we power higher once the institutions get back into the market on Monday.”
“Normally, when I have a 50% gain this fast, I think of taking some off the table as there’s always a pullback.”
“Instead, I’m hoping for a pullback so I can add more. I suspect that Bitcoin will be one of the best performing asset classes in 2021—by then, the CUSIPs will control the whole “free float.””
When they are all in, there are no easy gains coming down the pike, the tide will flow out in a flash.
