Bitcoin misguided fear government money creation
The Fed's White Paper
Bitcoin misguided fear government money
18. See Committee on Payments and Market Infrastructures, "Central bank digital currencies," March 2018, https://www.bis.org/cpmi/publ/d174.pdf. Return to text 5.3. Hedging effectiveness I choose 2018 as signalling a phase change since that is when the extremely rapid crypto price rises effectively stopped. The primary transactional use of crypto in the first phase was criminality because of its purported, but never true, promise of private transactions not monitored by law enforcement. The only government authority that paid close attention to crypto in its first phase was law enforcement, concerning as even if crypto never posed more danger to macro and micro stability than in 2018, the financial authorities almost entirely ignored it, at least publicly.
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Bitcoin misguided fear money creation
Cryptocurrencies are distinct from these other forms of digital money in several respects. For one thing, as privately issued media of exchange, their value is based primarily on the forces of supply and demand rather than on a financial institution's promise to pay back a specified quantity of dollars. Moreover, they are differentiated by their technological underpinnings and governance systems. The most prominent cryptocurrencies, Bitcoin and Ethereum, use blockchain technology, which allows for direct, peer-to-peer transactions across a network without the need for a central clearing authority, such as the Fed or a private clearing house. Follow us on social media Crypto\u2019s creators aspired to create a decentralized money system, with no entry points for state oversight and surveillance. But the crypto economy has become increasingly centralized around exchanges like Binance and Coinbase. While these exchanges allow customers to store and convert money from one cryptocurrency into another, they also give the government a massive opening. Crypto is being tamed, as its central actors agree to implement U.S. rules, extending the government\u2019s reach into the heart of the crypto economy\u2026.