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Cryptocurrency Good Or Bad

Cryptocurrency Good Or Bad

Cryptocurrency Good Or Bad – Eduardo Levi Yeyati and Eduardo Levi Yeyati Former Resident – Global Business and Development @eduardoeyati Sebastian Katz Sebastian Katz Dean and Professor of Business – Universidad de Buenos Aires @KatzSeba

Throughout the history of finance, many of the most absurd ideas have arisen from a combination of key elements: from the interest of uninformed investors driven by “disruption” innovation, to the illusion of easy results, to the lack of impact on “change” there. Coming after dealing with the power of time, often slightly seasonal with a lot of global liquidity.

Table of Contents

Cryptocurrency Good Or Bad

All fads end the same way, with a clever fix that lowers the price like a house of cards described in the classic stories of Kindleberger (1978) and more recently by Reinhart and Rogoff (2009). In short, this is another case of greed refusing to fear until it is too late for anything but panic.

The Good, The Bad, And The Ugly

The latest saga of the cryptoecosystem reproduces these elements, reinforced by a techno-anarcho-libertarian stick-it-to-the-guys attitude towards creating a two-tiered monetary and financial system. Discover the advantages of anonymity – usually against taxes and sometimes against the law – and complete classification in the market – try to get rid of the financial market without price competition and seizure of “expenses” in the middle. create many points of financial weakness and, in some cases, fraud.

The Fed’s tight monetary policy has led to and over the course of a few weeks, the crypto debacle has revealed a number of events, including:

All this is against a sales history that, at the time of writing, shows a vertical correction of almost 66 percent from the peak of $3 trillion in November 2021, after the bubble grew during the epidemic year, most of the financial watch. and financial impulses in the main economy. The collapse hit mom-and-pop savers and big business alike, prompting an open letter to Congress, signed by more than 1,500 experts, urging the body to “be serious, skeptical of business claims.” that crypto assets … is a new technology that is perfect. “

Since the inception of Bitcoin in early 2009, the number of cryptocurrencies has grown to about 15,000, although in many cases they are only replicas with less trading volume (top 20 cryptoassets 90) for those who do not bother to look into the market. . Share of capital). This growth was accompanied by inefficiencies in isolation – unregulated activities such as borrowing and leverage – that affected payment needs, and many new (stable coins) appeared to address some of the weakest of the original crypto assets. .

Bitcoin And Ethereum Prices Fall Often In September: Report

Although they currently represent less than 1 percent of the global financial market, and their interactions with it are still – fortunately – less restrictive, the recent burst of growth poses, if not enough, a risk to financial stability. As a small business. was made in 2008. And this is not only true in emerging markets, where financial uncertainty and low spending can lead to remittances and credit impact or “encryption” – digital version of “dollarization”. In advanced economies, competition from major technologies for the provision of digital payments will limit the country’s independence, leading to economic benefits from business networks, and just beyond financial transactions are not so easy as irreversible. Blockchain technology makes it almost impossible for any payment system to overcome the necessary errors.

More than ten years after its launch, Bitcoin has failed in its main goal of establishing itself as an alternative that fulfills the functions of money. Paradoxically, Bitcoin’s main appeal is to replace the central bank – which keeps the price stable by matching the demand for the money – with a decentralized system based on the complexity of the token cryptocurrency following the gold standard and its deflation. Repeat the “barbaric episode” argument. The bias can lead to hyperinflation due to uncontrolled growth of competing cryptocurrencies.

Since they do not have a market value, the price of crypto is constantly changing, because they are only tied to the change in their demand – the difference from what is expected from the good unit of the account. Moreover, due to their controversial nature, their application cannot proceed without prohibitively high costs, congestion problems or safety risks (known as Buterin’s trilemma). Finally, if used on a large scale, they can cause environmental damage due to the power-intensive “proof-of-work” of most cryptosystems. Unsurprisingly, cryptos have so far failed to play an important role as a reliable means of payment – unless it is illegal, illegal or criminal – making them a target for difficult business people, flocks of companies and property. according to the car. Executives have been attracted by its divergent results of late, if not by the FOMO-inducing hype.

Generally speaking, stablecoins are in a completely different class, their main purpose is to eliminate the severe volatility of traditional cryptocurrencies. Stablecoins come in two types. Type 1, “algorithmic”, is based on smart contracts that prevent the peg from buying or selling it against other crypto assets in a strategy reminiscent of the Ponzi game, as the Terra-Luna fiasco clearly demonstrates. Type 2, “guardian”, follows the principle of traditional currency management (such as Hong Kong’s long-term exchange rate): the coin competes for the stock of business capital. Fixed currency, so holders can easily exchange them one-to-one on demand. In theory, just that kind of maintenance could earn the “stable” designation, but how stable?

Pros And Cons Of Bitcoin

Two conditions must be met to implement the plan. The first is very obvious: there is no substitute for real assets, the support must be real and easily identifiable. In practice, this is not always the case: for example, doubts about Tether’s backing last year led to the company’s late disclosure that less than half of its shares are actually backed by High Quality and Liquid Assets (HQLA). encourage. ) Like US Treasuries, the rest have assets that can lose value very quickly in financial stress.

The second condition is subtle and subtle: fixed deposits cannot be lent. If so, some of these loans will move to new deposits, which can be lent out, making the stock of crypto-denominated products many times older, all products fixed, and all plans will fail. This exceeds the reserves (which happened in the collapse of Argentina’s currency in 2001).

Now what if the stable “stablecoin” cannot be loaned – the situation we have another one called “stablecoin paradox” – and it only represents the digital embodiment of the stock of liquid reserves denominated in pegged currency? their drastic changes: just less responsibility than the work of illegal work? Stablecoins are often used as a vehicle currency to market various endogenous DeFi products and services, to market products to other crypto companies, or to protect against hackers, lost keys, smart contract failures, and so on. with the real one. business.

In addition to this dubious action, the endogamous market leads to contagion and domino effects, the need to protect small investors who do not know the risks of asset opacity, other information and legal uncertainty and lack of investment in crypto assets. Backstop, and you begin to see why central banks around the world have begun to view crypto transitions as a challenge to financial stability. While this has led some observers to argue that stablecoins should be banned altogether, central banks have so far adopted a simpler two-pronged response, thinking they should be handled appropriately. the mix. ,

Good News/bad News About Cryptocurrency In Hawaii

Unlike cryptocurrencies, CBDC is a digital token that represents a central bank’s legal claim – in other words, “cash”. As of this writing, of the growing number of central banks exploring the possibility of their own CBDCs, 28 have begun pilot projects (with around 260 million users in China), and at least three retail CBDC projects (in the Bahamas). Nigeria and the Eastern Caribbean) already exist.

For starters, there’s a problem that doesn’t necessarily affect emerging markets: accounting affordability. While private payment service providers (PSPs) like PayPal, like banks and credit cards, are integrated and charge high fees – which attract cash and are illegal in a less profitable business – many CBDC wholesale companies focus on reducing cross-border transactions. There are additional transaction fees – above all the export. Additionally, according to their policy, CBDC stores can allow instant and final payments 24/7 at low or zero cost to customers, including unprofitable payments from private providers.

It can be argued that many of these functions are already covered by existing or future Fast Retail Payment Systems (FPRS). Based on the public information architecture and interoperability between different payment systems, FPRS enables more competition between banks and PSPs providing money transfers, while avoiding the price monopoly problem. Since it was first announced in Korea in 2001, more than 60 countries have implemented FPRS and more are growing.

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  1. Cryptocurrency Good Or BadAll fads end the same way, with a clever fix that lowers the price like a house of cards described in the classic stories of Kindleberger (1978) and more recently by Reinhart and Rogoff (2009). In short, this is another case of greed refusing to fear until it is too late for anything but panic.The Good, The Bad, And The UglyThe latest saga of the cryptoecosystem reproduces these elements, reinforced by a techno-anarcho-libertarian stick-it-to-the-guys attitude towards creating a two-tiered monetary and financial system. Discover the advantages of anonymity - usually against taxes and sometimes against the law - and complete classification in the market - try to get rid of the financial market without price competition and seizure of "expenses" in the middle. create many points of financial weakness and, in some cases, fraud.The Fed's tight monetary policy has led to and over the course of a few weeks, the crypto debacle has revealed a number of events, including:All this is against a sales history that, at the time of writing, shows a vertical correction of almost 66 percent from the peak of $3 trillion in November 2021, after the bubble grew during the epidemic year, most of the financial watch. and financial impulses in the main economy. The collapse hit mom-and-pop savers and big business alike, prompting an open letter to Congress, signed by more than 1,500 experts, urging the body to "be serious, skeptical of business claims." that crypto assets ... is a new technology that is perfect. "Since the inception of Bitcoin in early 2009, the number of cryptocurrencies has grown to about 15,000, although in many cases they are only replicas with less trading volume (top 20 cryptoassets 90) for those who do not bother to look into the market. . Share of capital). This growth was accompanied by inefficiencies in isolation - unregulated activities such as borrowing and leverage - that affected payment needs, and many new (stable coins) appeared to address some of the weakest of the original crypto assets. .Bitcoin And Ethereum Prices Fall Often In September: ReportAlthough they currently represent less than 1 percent of the global financial market, and their interactions with it are still - fortunately - less restrictive, the recent burst of growth poses, if not enough, a risk to financial stability. As a small business. was made in 2008. And this is not only true in emerging markets, where financial uncertainty and low spending can lead to remittances and credit impact or "encryption" - digital version of "dollarization". In advanced economies, competition from major technologies for the provision of digital payments will limit the country's independence, leading to economic benefits from business networks, and just beyond financial transactions are not so easy as irreversible. Blockchain technology makes it almost impossible for any payment system to overcome the necessary errors.More than ten years after its launch, Bitcoin has failed in its main goal of establishing itself as an alternative that fulfills the functions of money. Paradoxically, Bitcoin's main appeal is to replace the central bank – which keeps the price stable by matching the demand for the money – with a decentralized system based on the complexity of the token cryptocurrency following the gold standard and its deflation. Repeat the "barbaric episode" argument. The bias can lead to hyperinflation due to uncontrolled growth of competing cryptocurrencies.Since they do not have a market value, the price of crypto is constantly changing, because they are only tied to the change in their demand - the difference from what is expected from the good unit of the account. Moreover, due to their controversial nature, their application cannot proceed without prohibitively high costs, congestion problems or safety risks (known as Buterin's trilemma). Finally, if used on a large scale, they can cause environmental damage due to the power-intensive "proof-of-work" of most cryptosystems. Unsurprisingly, cryptos have so far failed to play an important role as a reliable means of payment - unless it is illegal, illegal or criminal - making them a target for difficult business people, flocks of companies and property. according to the car. Executives have been attracted by its divergent results of late, if not by the FOMO-inducing hype.Generally speaking, stablecoins are in a completely different class, their main purpose is to eliminate the severe volatility of traditional cryptocurrencies. Stablecoins come in two types. Type 1, "algorithmic", is based on smart contracts that prevent the peg from buying or selling it against other crypto assets in a strategy reminiscent of the Ponzi game, as the Terra-Luna fiasco clearly demonstrates. Type 2, "guardian", follows the principle of traditional currency management (such as Hong Kong's long-term exchange rate): the coin competes for the stock of business capital. Fixed currency, so holders can easily exchange them one-to-one on demand. In theory, just that kind of maintenance could earn the "stable" designation, but how stable?Pros And Cons Of BitcoinTwo conditions must be met to implement the plan. The first is very obvious: there is no substitute for real assets, the support must be real and easily identifiable. In practice, this is not always the case: for example, doubts about Tether's backing last year led to the company's late disclosure that less than half of its shares are actually backed by High Quality and Liquid Assets (HQLA). encourage. ) Like US Treasuries, the rest have assets that can lose value very quickly in financial stress.The second condition is subtle and subtle: fixed deposits cannot be lent. If so, some of these loans will move to new deposits, which can be lent out, making the stock of crypto-denominated products many times older, all products fixed, and all plans will fail. This exceeds the reserves (which happened in the collapse of Argentina's currency in 2001).Now what if the stable "stablecoin" cannot be loaned - the situation we have another one called "stablecoin paradox" - and it only represents the digital embodiment of the stock of liquid reserves denominated in pegged currency? their drastic changes: just less responsibility than the work of illegal work? Stablecoins are often used as a vehicle currency to market various endogenous DeFi products and services, to market products to other crypto companies, or to protect against hackers, lost keys, smart contract failures, and so on. with the real one. business.In addition to this dubious action, the endogamous market leads to contagion and domino effects, the need to protect small investors who do not know the risks of asset opacity, other information and legal uncertainty and lack of investment in crypto assets. Backstop, and you begin to see why central banks around the world have begun to view crypto transitions as a challenge to financial stability. While this has led some observers to argue that stablecoins should be banned altogether, central banks have so far adopted a simpler two-pronged response, thinking they should be handled appropriately. the mix. ,Good News/bad News About Cryptocurrency In Hawaii