Virtually everybody knows what a dollar is, but not as many know about the SDR. The International Monetary Fund’s (IMF) Special Drawing Rights is an international, monetary reserve system created specifically to address limitations of gold and standard fiat currencies such as the USD. In short, should these fail, central banks and their governments retain the ability to trade and plan with liquidity via another, exclusive instrument — the SDR. An Artificial Currency The SDR is not an actual currency, according to the IMF, but a “potential claim on the freely usable currencies of IMF members.” As the official unit of account for the group, and an instrument only available to member countries’ central banks, the IMF itself and “designated, official entities,” SDR are exclusive assets. The average individual cannot get their hands on SDR. Comprising a basket of major global currencies, the composition of the Special Drawing Rights is reviewed in five-year intervals. Currently the SDR utilizes USD, EUR, CNY, JPY, and GBP. The system is said to enable liquidity in international finance when assets like gold or other fiat currencies fail to do so. In the event of an unprecedented, worldwide economic collapse, SDR could become a centralized means by which to rebuild global trade networks. In fact, after the global downturn of 2008-09, the IMF’s issuance of SDR to member countries spiked dramatically in an attempt to re-stabilize the world economy.
Creation of SDR The SDR system was created in 1969 and “was initially defined as equivalent to 0.888671 grams of fine gold—which, at the time, was also equivalent to one U.S. dollar,” imf.org relates. “After the collapse of the Bretton Woods system, the SDR was redefined as a basket of currencies.” Of course, the collapse of Bretton Woods meant the international abandonment of the gold standard and the beginning of floating exchange rates. SDR is a uniquely isolated system, with its own exclusive economy and management, including interest rates set weekly and allocations to member countries determined via IMF criteria. Controversy, Control and Crypto The International Monetary Fund is well known as a financial superpower, exercising great influence in a wide scope of global affairs. The group has drawn sharp criticism throughout the years for allegedly destroying local economies and agriculture, negatively affecting healthcare, and overregulation of competing currencies and monetary instruments such as Bitcoin and crypto. In 2018, the group interestingly discouraged the Marshall Islands from creating their own cryptocurrency which could potentially challenge dollar hegemony on the islands, while just months later advocating central bank-issued digital currencies in other, more powerful national economies. While the Marshall Islands appear to be pressing on with their plan, still advocating the SOV national currency designed to fight inflation, standing up to a surveillance and regulatory behemoth like the IMF is not easily done, and likely not without serious compromises. Unlike SDR, cryptocurrencies like bitcoin are not regulated or allocated by a centralized, monetary surveillance authority such as the IMF. This has been a source of concern for the group, with former IMF head and European Central Bank presidential nominee Christine Lagarde stating in April: “I think the role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto, assets, currencies, or whatever … that is clearly shaking the system.” For central bankers, this is clearly a threat to stability. Some advocates of radical financial freedom, however, believe that a decentralized shake-up of the old order may be just what is needed. After all, if the IMF can have its own special emergency currency in today’s climate of global financial instability, why not everyone else? China’s ability to control the coronavirus pandemic and return to normal economic activities is reflected in its 2020 gold mine production. Data analyzed by Finbold indicates that China accounted for 380 metric tons or 11.9% share of the global gold production in 2020. Australia’s production was 320 metric tons, representing 10% of the global share, while Russia ranks third at 9.4% or 300 metric tons. The three countries cumulatively represent 31% of all the gold mine production in 2020. In total, 3,200 metric tons of gold were produced last year globally. Furthermore, Australia ranks top as the country with the highest gold reserves at an estimated 10,000 metric tons, followed by Russia at 7,500 metric tons. The United States ranks a distant third at 3,000 metric tons in gold reserves. The amount of the remaining gold reserves varies as it might reduce due to increased mining or rise as more mining ores are discovered. The numbers are based on the data provided by the United States Geological Survey (USGS).
China’s margin with second-placed Australia is not big, but the Asian country tops the list potentially due to its pandemic’s handling. The country successfully managed to control the health crisis giving the green light to the resumption of economic activities, including gold mining. The production was also motivated by the country’s high demand for gold through by-products like jewelry and ornaments.
The high production comes in the backdrop of the Chinese gold mining industry receiving increased foreign and domestic investment. Worth noting is that China managed to remain in the pole position despite the heavy and tighter environmental policies imposed by the national government. Political factors are also a driver of 2020 gold production. For China, the country appears to have put aside the trade tension with the United States to rank top since most of the precious metal is consumed locally. Elsewhere, Russia’s share is also highly fuelled by the increasing possibility of more sanctions from the U.S. The sanctions mean that state banks are at risk of being frozen out of dealing in U.S. dollar-denominated assets. Despite the pandemic, financial market events partly inspired production after gold as an asset hit a new all-time high by trading above $2,000 in August. The record price offered a window for increased profits for production companies fuelling mining activity. There was also interest in gold as investors were looking for an alternative source of wealth following the 2020 Q1 stock market crash. In recent times a lot of people have been talking about this specific patent online. It has made lots of rounds on Reddit and many people are drawing their own conclusions in regard. Patent 060606 is owned by Microsoft and is a world patent. People are blown away by the fact that the numbers associated with this patent happen to include three sixes which is thought by many to be a ‘devil number.’ Now, this patent basically covers a device that is worn on the body and is linked up to some kind of cryptocurrency system from there translating things digitally and collecting data. While that might sound a bit vague, the patent itself is a bit vague overall.
Body activity data may be generated based on the sensed body activity of the user. The cryptocurrency system communicatively coupled to the device of the user may verify if the body activity data satisfies one or more conditions set by the cryptocurrency system, and award cryptocurrency to the user whose body activity data is verified. Along with that specific abstract, an image or illustration is also included which you can see below. While many are, as noted above freaking out and calling this a sign of the ‘mark of the beast’ others are not so concerned. Many believe this new concept of crypto mining might be well worth looking into. On one Reddit thread, many were going back and forth on this being nothing more than an advanced ad insight plan and some were very much comparing it to Sweatcoin, an app that ‘pays’ you for walking. That being said there are as usual tons of people saying the patent doesn’t exist because it’s not a US patent. However, it can be looked up if you go through the European Patent Office leading us to believe it is an actual patent, you can click here to see it.
While I don’t think we have much to worry about in regard to this, that won’t stop people from freaking out over the numbers and coming to their own conclusions. For more information on this feel free to check out the video below that being said keep in mind nothing is processed through completely yet, this is just a patent and the things people are saying mostly are all speculation about how this will turn out. Do you think this could end up being some kind of basic app or is there more to it that we are not able to see yet? Everywhere you look in the US financial system, things look ready to explode, with the central bank and government in a panic and firefighting mode. Intervention. Manipulation. This is no free market. This is central planning. And it’s end game play:
Something has got to give. This cannot go on and on. Sooner or later the market will say enough is enough. And when that happens, it will make sense to own real assets, including physical precious metals, silver and gold. Federal Reserve Chairman Jerome Powell said Monday (March 22) that cryptocurrencies are “speculative” investments, and therefore not reliable. He added that the Fed is moving slowly on the matter of creating a digital dollar, despite the soaring price of bitcoin in recent months.
Speaking at a virtual panel discussion, he added that cryptocurrencies are “highly volatile and therefore not really useful stores of value — and they’re not backed by anything.” As reported by CNBC, Powell said, “It’s more a speculative asset that’s essentially a substitute for gold rather than for the dollar.” The panel discussion on digital banking was hosted by the Bank for International Settlements. Meanwhile, Coinbase said that bitcoin was trading near $57,000, as it has attracted big name investors and some acceptance in the financial industry. For the past several years, the Fed has worked on its own payments system. CNBC said that the final product is likely to happen over the next two years. Last month, U.S. Treasury Secretary Janet Yellen said that central banks should explore creating and issuing sovereign digital currencies. The opportunity is that such currencies — digital dollars among them — could create “faster, safer and cheaper payments,” she said at a virtual conference. “There’s a lot of things to consider here,” Yellen said. “But it’s worth looking at.” Yellen said that among those “things to consider” is how regulators would “manage money laundering and illicit finance issues.” The rise of cryptocurrencies demands advanced technologies to close the gap with financial criminals, said. Ed Wilson, a partner at Venable LLP, a firm that specializes in financial regulations. Wilson told PYMNTS that solutions will involve using advanced technologies to help financial institutions (FIs) close the gap, with financial criminals out to exploit the digital movement of money. “Banks put too much emphasis on reducing reputational risks [caused by] regulatory failure,” he said. “They could reduce that if they would instead change how they run their account opening and anti-money laundering procedures.”
As the need for its reparations function ceases, the BIS takes up a role of a banker to the central banks and other international financial organizations, and provides a forum for promoting international cooperation, dialogue, as well as policy analysis among central banks and within the international financial community. Furthermore, it also acts as a centre for economic and monetary research
Its head office is in Basel, Switzerland and there are two representative offices: in the Hong Kong Special Administrative Region of the People's Republic of China. 2. Main Functions The Bank for International Settlements (BIS) is an international organization which fosters monetary and financial cooperation and serves exclusively as a bank for central banks. Therefore, it does not accept deposits from, or provide financial services to, private individuals or corporate entities. The BIS fulfils its mandate by acting as: 2.1 A forum to promote discussion and policy analysis among central banks and within the international financial community Bimonthly meetings of the Governors and other senior officials of the BIS member central banks to discuss monetary and financial matters are instrumental in pursuing this goal. The standing committees located at the BIS support central banks, and authorities in charge of financial stability more generally, by providing background analysis and policy recommendations. These committees also help formulate international standards and best practices on the relevant matters. The committees comprise:
2.2 A prime counterparty for central banks in their financial transactions and an agent or trustee in connection with international financial operations The BIS offers a wide range of financial services to assist central banks and other official monetary institutions in the management of their foreign reserves. BIS financial services are provided out of two linked trading rooms: one at its Basel head office and the other at its office in Hong Kong SAR. In addition to standard services such as sight/notice accounts and fixed-term deposits, the Bank has developed a range of more sophisticated financial products which central banks can actively trade with the BIS to increase the return on their foreign assets. The Bank also transacts foreign exchange and gold on behalf of its customers. The BIS also offers a range of asset management services in sovereign securities or high-grade assets. These may be either a specific portfolio mandate negotiated between the BIS and a central bank or an open-end fund structure. Furthermore, the BIS extends short-term credits to central banks, usually on a collateralized basis, and coordinates emergency short-term lending to countries in financial crisis. 2.3 A centre for economic and monetary research The economic, monetary, financial and legal research of the BIS supports its meetings and the activities of the Basel-based committees. The BIS is also a hub for sharing statistical information amongst central banks, and for publishing statistics on global banking, securities, foreign exchange and derivatives markets. 3. Organization Structure The three most important decision-making bodies within the Bank are: the General Meeting of member central banks, the Board of Directors and the Management of the Bank. Decisions taken at each of these levels concern the running of the Bank and as such are mainly of an administrative and financial nature, related to its banking operations, the policies governing internal management of the BIS and the allocation of budgetary resources to the different business areas. The BIS currently has 55 member central banks, all of which are entitled to be represented and vote in the General Meetings. Voting power is proportionate to the number of BIS shares issued to each country. 4. Relationship with Members The members can hold shares in the BIS since 2000. In total there are 547,125 shares of issued capital. The change in the BIS regulation requiring shares to be held only by central banks (CB's). As a shareholder, representatives from the CB's are invited to attend regular meetings of Governors held every two months in Basel. These gatherings provide an opportunity for participants to discuss the world economy and financial market developments, and to exchange views on topical issues of central bank interest or concern. The main result of these meetings is an improved understanding by participants of the developments, challenges and policies affecting various countries and markets. In addition, the BIS organizes frequent meetings of experts on monetary and financial stability issues as well as on more technical issues such as legal matters, reserve management, IT systems, internal audit and technical cooperation. Though targeted mostly at central banks, BIS meetings sometimes involve senior officials and experts from other financial market authorities, the academic community and market participants. 5. The Bottom Line The BIS is a global center for financial and economic interests. As such, it has been a principal architect in the development of the global financial market. Given the dynamic nature of social, political, and economic situations around the world, the BIS can be seen as a stabilizing force, encouraging financial stability and international prosperity in the face of global change. Beyond decimating local populations of Pacific Flying Squid, which have declined by more than 70%, the vast and aggressive fleet is likely driving North Korean fishermen in smaller wooden boats further out to sea, where many of their engines either break down or run out of fuel. Drifting on the open sea, many of them never make it home. In 2019, more than 158 of these ‘ghost boats’ washed up on Japan’s coast, many with dead bodies inside. So many North Koreans have disappeared at sea in recent years that port towns like Chongjin are now called “widows’ villages”. “This is the largest known case of illegal fishing perpetrated by a single industrial fleet operating in another nation’s waters,” says Jaeyoon Park, a data scientist from Global Fishing Watch who travelled with Ian aboard a South Korean vessel to track down the fleet firsthand. Traveling at night, they witnessed a group of 10 Chinese vessels sailing with their transponders off, heading into North Korean waters. The squid ships would not respond to radio calls, and when launching a drone, one of the Chinese fishing captains suddenly charged toward the team’s boat, coming within 10 meters to ward them off.
Many of the fishing stocks closest to China’s shores have collapsed from overfishing and industrialization, which is why the Chinese government heavily subsidizes its fishermen, who sail the world in search of new grounds. Often these boats are fishing illegally in other countries’ national waters, according to analysis by C4ADS, a marine research firm.
The investigation took over a year and a half to conduct and was a collaboration between NBC News and The Outlaw Ocean Project, which is a non-profit journalism organization based in Washington, D.C. that focuses on reporting about environmental and human rights crimes at sea. The story is an extremely important one and is being covered today in 20 news outlets in more than 10 different languages. Despite the seemingly insurmountable scale of the problem, Ian highlights the positive aspect of now being able to track and monitor such fleets – a capability that didn’t even exist five years ago. One of the takeaway lessons of this investigation was the sense of hope it offers for policing the world’s ocean. But it also shows the lack of governance at sea, including human rights, labor and environmental abuses that occur offshore, often with impunity. The discovery of this fleet raises further questions about the ways that overfishing by China and other countries is jeopardizing global food security, ocean health, geopolitical stability and the rule of international law. On average international monetary systems last about 35 to 40 years before the tensions they create becomes too great and a new system is required. Prior to the first world war, major economies existed on a hard gold standard. Intra-wars, most economies returned to a “semi-hard” gold standard. At the end of the second world war, a new international system was designed — the Bretton Woods order — with the dollar tied to gold, and other key currencies tied to the dollar. When that broke down at the start of the 1970s, the world moved on to a fiat system where the dollar was not backed by a commodity, and was therefore not anchored. This system has now reached the end of its usefulness. An understanding of the drivers of the 30-year debt supercycle illustrates the system’s tiredness. These include the unending liquidity that has been created by the commercial and central banks under this anchorless international monetary system. That process has been aided and abetted by global regulators and central banks that have largely ignored monetary targets and money supply growth. The massive growth of mortgage debt across most of the world’s major economies is one key example of this. Rather than a shortage of housing supply, as is often postulated as the key reason for high house prices, it’s the abundant and rapid growth in mortgage debt that has been the key driver in recent decades. This is also, of course, one of the factors sitting at the heart of today’s inequality and generational divide. Solving it should contribute significantly to healing divisions in western societies. With a new US administration, and the end of the Covid battle in sight with the vaccination rollout under way, now is a good time for the major economies of the west (and ideally the world) to sit down and devise a new international monetary order. As part of that there should be widespread debt cancellation, especially the government debt held by central banks. We estimate that amounts to approximately $25tn of government debt in the major regions of the global economy. Whether debt cancellation extends beyond that should be central to the negotiations between policymakers as to the construct of the new system — ideally it should, a form of debt jubilee. The implications for bond yields, post-debt cancellation, need to be fully thought through and debated. A normalisation in yields, as liquidity levels normalise, is likely. High ownership of government debt in that environment by parts of the financial system such as banks and insurers could inflict significant losses. In that case, recapitalisation of parts of the financial system should be included as part of the establishment of the new international monetary order. Equally, the impact on pension assets also needs to be considered and prepared for.
Secondly, policymakers should negotiate some form of anchor — whether it’s tying each other’s currencies together, tying them to a central electronic currency or maybe electronic special drawing rights, the international reserve asset created by the IMF. As highlighted above, one of the key drivers of inequality in recent decades has been the ability of central and commercial banks to create unending amounts of liquidity and new debt. This has created somewhat speculative economies, overly reliant on cheap money (whether mortgage debt or otherwise) that has then funded serial asset price bubbles. Whilst asset price bubbles are an ever-present feature throughout history, their size and frequency has picked up in recent decades. As the Fed reported in its 2018 survey, every major asset class over the 20 years from 1997 through to 2018 grew on average at an annual pace faster than nominal GDP. In the long term, this is neither healthy nor sustainable. With a liquidity anchor in place, the world economy will then move closer to a cleaner capitalist model where financial markets return to their primary role of price discovery and capital allocation based on perceived fundamentals (rather than liquidity levels). Growth should then become less reliant on debt creation and more reliant on gains from productivity, global trade and innovation. In that environment, income inequality should recede as the gains from productivity growth become more widely shared. The key reason that many western economies are now overly reliant on consumption, debt and house prices is because of the set-up of the domestic and international monetary and financial architecture. A Great Reset offers therefore opportunity to restore (some semblance of) economic fairness in western, and other, economies. Unlike bond and equity market investments, when you own and hold physical gold and physical silver there is no counterparty risk. This is because there is no counterparty. Contrast this to a government or corporate bond where the issuer is your counterparty and to an ETF or equity brokerage account where there are many counterparties in trusts, nominee accounts, and the settlement and clearing chain.
Likewise, there is no default risk with gold and silver, because with physical gold and silver there is no issuing entity which could go bankrupt or that can default. In contrast, in bond and equity market investments, all of the entities can default. The same is true of money market and savings accounts with banks. With cash deposits and savings balances, the commercial banking sector is your counterparty and banks can and do default. With the global shift to a bail-in regime, depositors are now at risk of being bailed-in in the event of commercial bank defaults. Investment gold and silver bars and coins are tangible assets produced from mining and refining that exist in limited supply. They are not brought into existence by monetary authorities, governments or central banks, and gold and silver are not subject to political interference or dilution to their supplies. Physical gold and silver exist outside the banking system, and outside the financial system. Physical gold and silver are a form of financial insurance against the collapse of the financial system. As the global financial system continues to lurk from crisis to crisis while being continually propped up by QE, negative interest rates and fiscal stimulus, owning physical investment precious metals is now more important than ever. The singer Grimes has made millions recently in an unusual way: by selling art and short videos as NFTs, also known as non-fungible tokens — and, she isn't the only one. NFTs represent the rights to a digital work of art or other media — and some people think they'll soon be more commonplace than bitcoin. In fact, NFTs are already growing ubiquitous: Infamous influencer Logan Paul has made millions off them; rapper Azealia Banks sold a 25-minute audio sex tape for the equivalent of $18,000; and, Kings of Leon will become the first band to release an album in the form of an NFT. In the latter case, with the purchase of the band's NFT, owners can access special perks like tickets to future concerts, exclusive audiovisual art, and more.
But let’s back up. What, exactly, are NFTs, what is the point of buying them, where can they be purchased, and why are we suddenly hearing about them so much? As stated above, NFTs are digital tokens representing a work of art or media. What they are not is cryptocurrency, because their value is not static or prone to only small fluctuations in value. Instead, NFTs' value can go up and down, depending on demand. In that way, buying an NFT is like buying an actual work of art: Demand dictates worth, and is subject to the whims of the market, no matter how extreme. (In this way, NFTs are also a little like stocks.) NFTs can be purchased through online marketplaces like OpenSea, which artists use to mint their work. Once minted, these works are published into tokens, and from there, buyers can either purchase the NFTs or bid on them with cryptocurrency. But, unlike purchasing a physical painting, say, when you buy an NFT, you are obtaining the rights to a digital asset, not the actual asset. To put it another way, one cryptoartist told me that this article could even be minted into an NFT; if someone bought it, they wouldn't be buying the literal article, but the digital asset of it. EXAMPLE Auction house Christie's brought the hammer down on a record-breaking piece of work yesterday: a non-fungible token (NFT) on the Ethereum blockchain that sold for $69.3 million. The work is by Mike Winklemann, or "Beeple," and is titled Everydays: The First 5000 Days. The hammer price, or the bid on which the auctioneer's gavel falls, was $60.25 million. The final price includes a so-called buyer's premium, or auction house fee, of $9.05 million. There are the people who simply don’t understand why an NFT by this artist named Beeple is sold for $69.3 million. But Zucker says that the people who are drawn to NFTs — for whatever reason — are touched by it in different ways. "As I see it, especially after the past year of the pandemic, we live increasingly in the digital world," Zucker says. "So it stands to reason that we are developing systems of value around the aesthetic and creative elements that populate that world." Sarah Zucker, who works across mediums and specializes in screen-based artwork, was excited about the possibility to edition and value her work the same way other, more “traditional” artists have always been able to. She minted her first NFT in 2019. “To have your work be viewed and discussed as something real and tangible has psychic and emotional benefits beyond the obvious life-changing aspect of being able to support yourself directly from your work,” . Adding Financial Data to Digital Authoritarianism China is pushing aggressively to be a global leader in financial technology. Over the last several years, use of mobile payment platforms has exploded in China while cash transactions have declined. At the same time, global interest in the development of central bank digital currencies (CBDCs) has also risen, with dozens of central banks now researching ways to offer digital versions of their fiat currency to ordinary citizens. The People’s Bank of China (PBOC) is leading in these efforts, aiming to release a central bank digital currency of its own. This CBDC system, which the Chinese government calls Digital Currency/ Electronic Payment (DCEP), will likely enable the Chinese Communist Party (CCP) to strengthen its digital authoritarianism domestically and export its influence and standard-setting abroad. By eliminating some of the previous constraints on government data collection of private citizens’ transactions, DCEP represents a significant risk to the long-held standards of financial privacy upheld in free societies. The PBOC’s DCEP strategy is motivated by a number of factors. The dominance of private mobile payment firms in China has given such companies an outsized role in retail commerce, making them indispensable to the economy. The PBOC is seeking a digital currency to harness the market share and technological innovation of private financial firms and to gain better access to information about the financial activities of Chinese consumers. DCEP is also part of China’s geopolitical ambitions, and CCP officials frame the progress of DCEP as similar to advancements in other strategically important emerging technologies, such as artificial intelligence and robotics. DCEP’s development also comes against a backdrop of China’s broader push to internationalize the renminbi. Few technical details about DCEP are publicly confirmed. The PBOC has indicated that DCEP will have a two-tier structure, with the PBOC managing the back-end infrastructure while employing banks and other companies to aid in distribution to the public. It is clear that, despite much initial PBOC discussion about distributed ledger infrastructure, DCEP will not use blockchain as part of its design. DCEP is also likely to allow for some basic programmability involving its transactions and to offer users the opportunity to access the currency via software wallets. Despite some official statements and reporting about these general features, much of the precise operational architecture is still being worked out. China is pushing aggressively to be a global leader in financial technology. It is also clear that the Chinese government hopes to leverage DCEP for the CCP’s domestic political agenda. Whereas PBOC officials have indicated that they will harness huge amounts of DCEP data to enhance monetary policy and monitor for illegal activity, officials higher in the Chinese government have stressed DCEP’s value as a tool for enforcing party discipline. PBOC officials also have said that DCEP will have “controllable anonymity,” allowing the central bank to see all of the transactions taking place while maintaining privacy among transacting parties. However, the system will also enable the CCP to exercise greater control over private transactions, as well as to wield punitive power over Chinese citizens in tandem with the social credit system. Additionally, although a number of PBOC officials hope DCEP will help drive internationalization of the renminbi, DCEP is unlikely to do so by itself in the short term.
The PBOC is in position to launch the largest digital currency project of any major economy. DCEP pilot tests have been underway since mid-2020 in several localities, and a number of state-owned banks and technology firms are building interfaces and distribution systems for the platform. The PBOC hopes to make DCEP available for wider use around the time of the 2022 Winter Olympics, which will be hosted in Beijing. With China’s quick progress in developing and testing the system, U.S. policymakers must closely track DCEP’s development and act strategically to address its potential to further the CCP’s coercive power and its influence in the evolving global financial system. Although DCEP is not likely to displace the U.S. dollar as a global reserve currency, it may serve as a model and standard-bearer for other countries to emulate. The United States might not necessarily need to create its own CBDC, but it must adapt to the quickly changing payments space, understand the geopolitical implications of this technology, influence its development, counter the DCEP’s threats to political and economic liberty, and ensure that financial technology innovation does not further China’s digital authoritarianism. What is a Bitcoin and how does it work? Well, according to Google, Bitcoin is a decentralized digital currency that you can buy, sell and exchange directly, without an intermediary like a bank. It’s almost right what Google is telling us. Actually only one thing is right, it’s digital? But digital what? Is it a currency? Is it stock? Is it a commodity? Or is it an asset?
So is it true that you can buy, sell and exchange Bitcoins directly? I don’t think so. For buy, sell and exchange Bitcoins to Fiat currency and back, you need a regular bank. Don’t forget. The regular bank knows who you are and the Bitcoin bank need to know that too. Actually they need to know your regular bank account information, they verify it, you need to send them your ID. All will be carefully checked before you can enter the Bitcoin world.
So what is the big advantage of Bitcoins. Well, it’s true you can exchange Bitcoins from Wallet to Wallet. It will be noticed by your receive or send Bitcoin address. Oh, sorry I didn’t mention it before that your Bitcoin Wallet has a receive and send part, both identified by an address. These addresses are not secret. You can find them in the Block chain. And the Bitcoin bank(s) know they are yours. And your Wallet has a balance sheet too. So you can see you own $100,- Bitcoin value in the morning and only $90 in the evening. According to the Bitcoin/dollar exchange rate. What it a Bitcoin really worth? I don’t know. It is based on trust and an agreement. We trust the world behind Bitcoin. We trust the Bitcoin banks. We trust the Block chain. But for what reason? A regular bank is backed by the Central bank of the country. But what is backing the Bitcoin (bank)? We agree on represented value to a fiat currency like the dollar. But what makes that value? The market. Supply and demand? And what when you buy in Euro’s and the Euro is not supporting you? For me it’s just a Ponzi scheme. The ones who did buy the first Bitcoins in 2009 are the winners. But when you step in now you’re just a fool or you have too much money to burn. You will never make the profit they did make so far. But…. some captains of industries, like Elon Musk, Mike Cuban and Kevin O’Leary, think it’s the best thing ever. But is it? Sure it has a price, but does it have value? So is it smart to buy Bitcoin? I don’t think so. |
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