If they are in fact just digits on a hard-drive somewhere why will it take down the world economy? Let us say I was importing iron ore from Brazil and exporting, I dunno, new tires to Brazil. These are actual physical trades.
Nobody ever seems to explain. It always goes from:
Derivatives are just bets on bets and aren’t supporting by anything all the way to it will destroy the world. Eyes glaze over from these descriptions because they don’t seem to be linked.
Ethereal bits,yes,but still legal obligations that people will fight over to convert them to real goods & services.
One does not wipe a bank’s hard drive and expect clients to say “oh well my million dollars was just bits anyway”.
Looming financial collapse was a major reason for WWII. Germany couldn’t pay debts, so it killed creditors and seized assets of others.