Watched a video this morning about the future of the global monetary system, especially after Jerome Powell’s admission yesterday that Facebook had been given the go ahead from the Federel Reserve to start Libra.
In the video, Mike Maloney, stated that if you look through history currency changes approx. every 40 years. And it’s being able to be predict what’s coming that’ll result in the biggest “wealth transfer” by picking the correct assets.
From what he outlined, the likes of VISA, PayPal, Spotify, Uber and Lyft are already making massive investment plans to take this into 2020.
What’s your thoughts on the future of the monetary system? And is there any assets you are looking to back going into this new world of money?
I believe over the next 3-4 decades there will be an exponential shift away from fiat, towards crypto. Ultimately I think (& hope) this will take the form of decentralised cryptos like bitcoin and not the form of Libra.
It’s been really interesting to watch the rise of bitcoin, which is deflationary in nature, in countries like Venezuela who are undergoing high inflation.
I also think there will be an increase in appetite for censorship resistant crypto, which will be one of the reasons Libra won’t work in the long run. (There is a great meme floating around about FB disabling Libra wallets for anyone who breaks community their FB post guidelines…scary thought if this is to be the future of money)
Currently we are seeing the first signs of this wealth transfer as crypto is being used as a store of value and a hedge against QE from central banks.
I think there is a huge opportunity here. I’ve invested in a variety of crypto assets for different reasons, Bitcoin, Ethereum amongst others.
I’m not sure what if any opportunity Libra (or similar) would provide as it’s backed by multiple fiat currencies?
Crypto isn’t fiat - ‘Fiat currency is legal tender backed by the government that issued it’. As far as I’m aware there isn’t any government issued cryptocurrencies?
I’ve talked about a few of the reasons above, but here are some of the reasons:
Deflationary
Decentralised
Secure (can’t be counterfeited)
Highly Divisible
Censorship resistant
Programmable
Ultimately I think the ‘best’ form of money will win.
I personally can’t see crypto providing anything new. I may be wrong and reconsider this in the future.
At the moment I still think the best hedge against currency is precious metals, and I personally can’t see this ever changing.
I just do not see how crypto can provide any real value.
Just thought I would stick my two pence in there.
Crypto is currently too awkward to use and too slow and expensive to take over as a proper currency. It needs to be able to make instant payments as fast as the contactless chip on a bank card without a transaction fee if it’s ever going to be taken seriously as a currency.
The price is too unstable as well, what use it it getting paid in bitcoins if your weeks wage won’t buy a pizza the following week?
I do agree, at this point in time crypto is not a viable alternative for every day consumer transactions. However, progress is being made on scalability solutions which will address those points.
I’d rather take the additional risk that comes with getting in early, than try to time the market and get in before mass adoption.
Seeing the sheer scale of Bitcoin I think there is definitely somesort of future but who can predict what that might be. I’ve got a small pot in BTC I’m looking to grow with a stop loss in case of any sudden crashes - although equities remain much more appealing.
While I agree with the sentiments in this thread (i.e. crypto is great), the real issue is will governments allow crypto to replace fiat currency?
There are a lot of strong reasons for why they would not allow that to happen in the foreseeable future. The main reason is that if fiat is replaced by a decentralized digital currency, it makes monetary policy (in it’s current form at least) pretty much obsolete. I don’t see that happening any time soon.
I think it is almost too late to outright ban cryptocurrencies, the time to do this would of been 3/4 years ago.
Agreed that it makes monetary policy obsolete, which is why I don’t understand the logic behind the Federal Reserve approving Facebook to create Libra. Even though it will be backed by USD and other currencies.
My cynical thinking is that the fed will have more visibility of the Facebook crypto than any of the real cryptocurrencies so it makes sense to approve that
You can’t ban crypto, it would be a hopeless task. They could stop mainstream businesses accepting it but that’s probably as far as they’d get.
Was surprised to see Lush ask if you want to pay by card, PayPal or Bitcoin. Think that’s the first time I’ve actually seen the option
a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
I am surprised that nobody mentioned energy consumption. If multiple global cryptos with transaction volumes of actual currencies had the same mining validation concept as today, this would not just be infeasible, it would never be accepted given the current and probably future focus on climate change as an issue.
Yes agree but compared to how much it cost and make damage to the earth to dig gold. For every grab about 15 tones of stone get destroyed. Also with actual money the amount it cost to keep in banks and and transfer is enormous. We just need to shift asap 100% renewable there is no question in that. Plus tech is getting better every year. Stronger chips less heat
Agree, Libra will be Centralized value exchange database just like wechat. The problem with that may be same like in china. goverment can ask for the details and what can happen is that whenever you run a red light the money can be automatically deducted from your account
Also it’s worth noting that most cryptocurrencies are moving towards a proof of stake consensus mechanism which removes the need to ‘mine’ coins and is much more energy efficient.
