TEXOKIE typing a Q-report on her latest rabbit hole adventures...
“I understand that the currencies the crypto currency progenitors are seeking to create are not tangible. I also like the term “Vaporware” you used. But if you think about it, the dollars in our bank accounts are not actually tangible. Banks have many more dollars on their balance sheets than they have actual dollars to cover those ledger sheet dollars. This is why they so fear the “run on the bank” scenario.”
A major difference between the Dollar and Cryptos is that there is an entity that stands behind the Dollar ready to guarantee it. This is based on the ability of the U.S. Government to tax their citizens, on behalf of the central bank. The bank will facilitate money flows amoung citizens and companies. (Ignoring here the issues surrounding the Federal Reserve.)
Crypto rests on an agreement amoung crypto users to assign value to the currency. There is no physical asset or government banking, in the end its just bytes, pixels, and a blue sky promise. (Yes, blockchain provides a verifiable record of what? Outside currency converted into crypto?)
Similarly, Banks and Brokerage firms issue derivatives on things like gold that have been leased to 3rd parties and may be subject to claims by 3 or more counterparties, or mortgages issued on properties whose value has been overstated or lenders who falsified income or asset statements. Failures in institutions holding these insturments could create a ripple that affects the entire economic system.
Unrealized gains. We can get into the issue of the value of financial assets. The only real valuation occurs upon sale of an item or service. (Stocks, bonds, homes, etc) Always try to make certain that you have tangible assets, things you can use, a home, vehicles, long store food, precious metals, a safe with guns and ammo (a boat that does not tip over in the deep part of the lake.!)
“Put not your trust in Princes” sayes the Bible. This prince of crypto died and took the key to the cave with him.
tangible assets, things you can use, a home, vehicles, long store food, precious metals, a safe with guns and ammo (a boat that does not tip over in the deep part of the lake.!)
(Texokie, Lady! How do you type so fast!)
“I understand that the currencies the crypto currency progenitors are seeking to create are not tangible. I also like the term “Vaporware” you used. But if you think about it, the dollars in our bank accounts are not actually tangible. Banks have many more dollars on their balance sheets than they have actual dollars to cover those ledger sheet dollars. This is why they so fear the “run on the bank” scenario.”
The story of the dead Crypto CEO represents a disaster in risk management. The man with the key died and it looks like he took the his entire company down with him. A total failure in corporate management.
A major difference between the Dollar and Cryptos is that there is an entity that stands behind the Dollar ready to guarantee it. This is based on the ability of the U.S. Government to tax their citizens, on behalf of the central bank. The bank will facilitate money flows amoung citizens and companies. (Ignoring here the issues surrounding the Federal Reserve.)
Crypto rests on an agreement amoung crypto users to assign value to the currency. There is no physical asset or government banking, in the end its just bytes, pixels, and a blue sky promise. (Yes, blockchain provides a verifiable record of what? Outside currency converted into crypto?)
Similarly, Banks and Brokerage firms issue derivatives on things like gold that have been leased to 3rd parties and may be subject to claims by 3 or more counterparties, or mortgages issued on properties whose value has been overstated or lenders who falsified income or asset statements. Failures in institutions holding these insturments could create a ripple that affects the entire economic system.
Unrealized gains. We can get into the issue of the value of financial assets. The only real valuation occurs upon sale of an item or service. (Stocks, bonds, homes, etc) Always try to make certain that you have tangible assets, things you can use, a home, vehicles, long store food, precious metals, a safe with guns and ammo (a boat that does not tip over in the deep part of the lake.!)
“Put not your trust in Princes” sayes the Bible. This prince of crypto died and took the key to the cave with him.
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Oh wow! Thanks for adding all that perspective to my understanding, Pete from Shawnee Mission. I really appreciate it.
TEXOKIE typing a Q-report on her latest rabbit hole adventures...