Cryptocurrencies

Written by  //  October 3, 2022  //  Global economy, Science & Technology  //  1 Comment

12 most popular types of cryptocurrency

Decoding Crypto: What It Is, How It Works, and How to Get Started
By John Hyatt
(Nasdaq) Cryptocurrency is often described as “digital money.” This description may be true, but it fails to capture what makes cryptocurrency unique and so appealing to many investors.
At its core, cryptocurrency is a system of value. When investors buy a cryptocurrency, they are betting that the value of that asset will increase in the future, just as stock market investors buy securities when they believe the company will grow and share prices will increase.
Stock valuations boil down to discounted estimations of a company’s future cash flows. There is no comparable valuation metric for cryptocurrencies because there is no underlying company; the value of a cryptocurrency is tied only to investor appetite.
Cryptocurrency runs on blockchain technology, but what exactly is a blockchain? The term has become so commonplace, its meaning and significance are often blurred. A blockchain is simply a digital ledger of transactions. This ledger (or database) is distributed across a network of computer systems. No single system controls the ledger. Instead, a decentralized network of computers keeps a blockchain running and authenticates its transactions.
Proponents of blockchain technology say that it can improve transparency, increase trust and bolster security of data being shared across a network. Detractors say that blockchain can be cumbersome, inefficient, expensive, and can use too much energy. (July 2021)

3-4 October
Crypto Needs More Rules and Better Enforcement, Regulators Warn
A federal panel responsible for monitoring financial system risks sounded a warning on Monday about cryptocurrency markets, saying that the widespread adoption of digital assets poses risks if the market continues to grow without better oversight and enforcement.
 Report on Digital Asset Financial Stability Risks and Regulation by the Financial Stability Oversight Council, which is led by the Treasury Department and was created after the 2008 financial crisis to help identify and mitigate threats to the financial system.
FSOC warns crypto is possible systemic risk
Its report identifies a wide range of regulatory gaps and market risks.
(Politico Pro) Top U.S. banking and markets regulators on Monday warned that the crypto industry could pose a major risk to the financial system if lawmakers and agencies don’t act soon to set ground rules.
The Financial Stability Oversight Council — a Treasury-led panel of top officials from the Federal Reserve, SEC and other agencies — released a 120-page report that identified a wide range of regulatory gaps and market risks affecting everything from Bitcoin trading platforms and stablecoins to consumer protection and cyberattacks.
Those risks will get more severe as the industry expands and digital asset businesses forge ties with traditional financial institutions like banks and payment systems, according to the report, which was produced in accordance with President Joe Biden’s March executive order on crypto.

29 September
Bitcoin’s steep environmental costs go beyond its hunger for energy
Bitcoin’s climate impact rivals that of beef or crude oil, according to a new analysis.
Bitcoin and other cryptocurrencies are notorious for their massive energy consumption, relying on power sources that emit greenhouse gases responsible for climate change. But even if digital currencies were to be produced and exchanged using 100 percent clean energy—which is far from the current reality—their environmental impact would still be overwhelmingly negative, due to Bitcoin’s hardware demands and other factors.

28 September
The Crypto World Is on Edge After a String of Hacks
(NYT) More than $2 billion in digital currency has been stolen in hacks this year, shaking faith in the experimental field of decentralized finance, known as DeFi.
Hackers have terrorized the crypto industry for years, stealing Bitcoin from online wallets and raiding the exchanges where investors buy and sell digital currencies. But the rapid proliferation of DeFi start-ups…has given rise to a new type of threat.

18 September
ECB Chooses Amazon and 4 Other Companies to Help Develop Digital Euro
(Bitcoin.com) The European Central Bank (ECB) has selected five companies to help develop user interfaces for a digital euro. Each company will work with the ECB and focus on one specific use case of the digital euro. Amazon has been chosen to focus on e-commerce payments.
The ECB formally started investigating what its central bank digital currency (CBDC), a digital euro, might look like in October last year, noting that the investigation phase should last about two years. ECB President Christine Lagarde said in February that a digital euro will not replace cash but will complement it. “A digital euro would give you an additional choice about how to pay and make it easier to do so, contributing to accessibility and inclusion,” she explained.
Cryptoruble to Give Russian Companies Another Option for International Settlements
Cryptoruble to Give Russian Companies Another Option for International Settlements
(Bitcoin.com) Developers are working on a “cryptoruble” that, as they say, can improve Russians’ access to global exchanges and be used for cross-border payments. Defi platform Indefibank, which is behind the project, says the token will be pegged to the national fiat but independent from a state-issued digital ruble.

17 September
Ethereum’s big breakthrough shows crypto has hope — but a long way to go
By Megan McArdle
(WaPo) It has now been almost 14 years since bitcoin, the first decentralized cryptocurrency, launched in January 2009. Ever since, we have had a lively debate between early adopters proclaiming that crypto was the future, and skeptics (including me) pointing out that crypto had a lot of disadvantages compared to good old-fashioned money and the array of institutions dedicated to moving it around.
Even if you are not deeply versed in the intricacies of various cryptocurrencies, you are probably aware of some of these problems: Unlike money, crypto still has to persuade people other than enthusiasts to use it. It has to persuade governments to leave it alone. Transactions are pricey and cumbersome. And one of the most cited drawbacks is crypto’s environmental impact; the “mining” infrastructure for some of the most popular cryptocurrencies is estimated to consume more electricity than many countries.
On Thursday, ethereum, the second biggest cryptocurrency platform, moved to put that last concern to rest, undergoing a gut renovation of its architecture. The tricky feat (known as “the merge” for technical reasons that need not concern us) has radically reduced the amount of electricity needed to process transactions; by one estimate, ethereum’s energy usage and carbon footprint have now fallen by 99.9 percent.
15 SeptemberThe Ethereum ‘Merge’ is complete, says Vitalik Buterin
The move will transition the Ethereum blockchain from proof-of-work to proof-of-stake, which is less energy intensive. The Ethereum Foundation estimates energy consumption will drop by 99.95%. Currently, its consumption is equivalent to that of Chile.

15 August
The Crypto Geniuses Who Vaporized a Trillion Dollars Everyone trusted the two guys at Three Arrows Capital. They knew what they were doing — right?
(New York) Su Zhu and Kyle Davies, two Andover graduates who ran a Singapore-based crypto hedge fund called Three Arrows Capital … filed for bankruptcy and disappeared.
With their hedge fund in the midst of chaotic liquidation proceedings, Zhu and Davies are currently believed to be in hiding. (Multiple emails to them and their lawyers requesting comment went unreturned, except for an automatic reply from Davies that reads, “Please note I am out of office at this time.”) For an industry constantly defending itself against accusations that cryptocurrency is, at its heart, a scam, Three Arrows seemed to prove the antagonists’ point.
… For a firm that had always portrayed itself as playing just with its own money — “We don’t have any external investors,” Zhu, 3AC’s CEO, had told Bloomberg as recently as February — the damage Three Arrows caused was astonishing. By mid-July, creditors had come forward with more than $2.8 billion in claims; the figure is expected to balloon from there
Zhu and Davies are two ambitious young men, by all descriptions exceedingly smart, who appeared to understand the structural opportunity of digital currency rather well: that crypto is a game of creating virtual fortunes out of thin air and convincing other humans with traditional forms of money that those virtual fortunes deserve to be real-world ones.

9 August
Canadian watchdogs join probe of Celsius’ multi-billion-dollar collapse, sources say
Quebec’s largest pension fund had $150 million invested in bankrupt crypto lender
In July, crypto lender Celsius Network filed for Chapter 11 bankruptcy protection and owes users about US$4.7 billion.
Canadian regulators are working with counterparts in the United States as multiple jurisdictions investigate the multi-billion-dollar collapse of cryptocurrency lender Celsius Network LLC, according to sources with knowledge of the probes.
Caisse de dépôt writes off US$150-million investment in crypto lender Celsius (17 August)

7 August
How cryptocurrency became a powerful force in Washington
The infrastructure bill is in part stalled as negotiations proceed on how closely to regulate the crypto industry
(WaPo) Sen. Rob Portman (R-Ohio) and the Biden administration had agreed on a proposal that would give federal regulators authority to impose new tax reporting obligations on cryptocurrency brokers, which enable traders to buy and sell cryptocurrency. The crypto provisions emerged as lawmakers struggled to find ways to pay for the bill, with nonpartisan estimates suggesting the tax changes — which would codify work the Internal Revenue Service was beginning to undertake — would increase federal revenue by about $28 billion over 10 years.
But an odd-couple coalition of liberals concerned about government overreach into tech and conservatives skeptical of financial regulation have pushed back strongly against the plan, which, they argue, would harm innovation.
Regardless of the measure’s ultimate fate, the fact that crypto regulation has become one of the biggest stumbling blocks to passage of the bill underscored how the industry has become a political force in Washington — and previewed a series of looming battles over a financial technology attracting billions of dollars of interest from Wall Street, Silicon Valley and financial players around the world, but that few still understand.
“What I think you’re seeing is the maturing of the industry — you see the crypto folks now understanding how Washington can influence their world and Washington learning a little bit about the technology,”

12 July
They couldn’t even scream any more. They were just sobbing’: the amateur investors ruined by the crypto crash
Fuelled by hype and hysteria, the market in bitcoin and other cryptocurrencies went from an obscure niche to a $3tn industry. Then the house of cards collapsed
(The Guardian) The cryptocurrency industry is in roiling waters. Scarcely a day seems to pass without a wave crashing across the sector. “The rollercoaster has turned and taken crypto holders on a downward spiral,” says Susannah Streeter, an analyst at Hargreaves Lansdown. “Many people have been caused serious financial pain.”
Last month, major coins including bitcoin and ethereum dropped by more than one-third in just a week. While bitcoin has tumbled significantly on several occasions, this bear run – meaning a period of declining prices – feels different. The industry is larger and more interconnected than ever, with retail and institutional investors jostling for space in what was, until last year, a $3tn market. (The crash has wiped $2tn off the market’s value.)
… The mania around bitcoin and other cryptocurrencies was fuelled by a social media hype machine unprecedented in the history of financial markets. Investors touted new coins that were amassing huge returns, hung off the tweets of crypto-influencers and spoke in impenetrable jargon. “Demand for bitcoin related purely to the level of interest in this new technology, and that interest was manipulated by the companies that offered different cryptocurrencies and exchanges and startups,” [Dr Larisa Yarovaya, an associate professor of finance at the University of Southampton] says. “All of this happened on social media, meaning that investors didn’t even know whether there was genuine interest in crypto, or lots of Twitter bots encouraging people to buy. The system wasn’t transparent.”

1-2 July
Crypto hedge fund Three Arrows files for Chapter 15 bankruptcy
(CNBC) Singapore-based 3AC is one of the biggest casualties of the latest so-called “crypto winter” to date. CNBC reported Wednesday that Three Arrows had fallen into liquidation.
This crypto winter is warm compared to the next one
(The Hill) How in the world did we let cryptocurrencies become a $10 trillion industry before examining the systemic risks being created? Crypto coins, derivative securities, exchanges and the leverage created to support them now equal nearly half the asset size of the entire U.S. banking industry.
So, we really have caught a big break by having a crypto winter now before this unregulated industry grew even larger and subsumed other financial markets.
What should we have learned from this? As Bill Gates correctly notes, everyone is beginning to appreciate that the current version of cryptocurrencies to some extent relies on the greater fool theory. Purchasers expect the price to rise solely because they will be followed by additional purchasers with the same expectations. No such investment scheme has ever succeeded
The crypto world mesmerized legislators and regulators into a decade of inaction as it grew exponentially. But there is still time for them to come to their senses, modernize financial regulation and regulate cryptocurrencies like the money and securities they purport to be.
Perhaps then, crypto can proceed toward a more lasting future. With the economy simultaneously being buffeted by the aftermath of the COVID-19 pandemic, inflation and global conflict, crypto investors should for now prepare for a difficult winter. But it will not be nearly as harsh as the next one if the crypto orgy continues without smarter investors and better oversight.
Major crypto broker Voyager Digital suspends all trading, deposits and withdrawals
(CNBC) Voyager’s announcement comes amid a raft of margin calls and defaults across the sector, making the digital broker the latest collateral damage of the broad market selloff in cryptocurrency. The two most widely traded cryptocurrencies, bitcoin and ether, are down more than 70% from their peaks last November, and the May collapse of the UST stablecoin sent shockwaves through an already tumultuous market.
The news comes a few days after one of Voyager’s customers failed to make payments on a loan worth hundreds of millions of dollars, fueling growing concerns of an insolvency contagion effect across the industry.

13 June
Crypto Is Crashing. It Deserves to.
The decline feels like more than just a price reboot or a washout. It points to a system-wide failure.
(New York) If you’re anything but a die-hard observer of the crypto markets, all the crashes, frauds, Ponzi schemes and criminal indictments that have plagued the market during the past six months have been something of a blur. Crypto is volatile, but it lives at the margins of the financial world. In the U.S., at least, traditional markets and the broader economy have never really integrated with digital currencies, and most people don’t use bitcoin or dogecoin or ethereum on a day-to-day basis, like the dollar. When bad news happens, it can feel like hearing about a coup in a country you’re only vaguely aware of. Bad for somebody, sure, but does it affect me? So when bitcoin started to crash over the weekend, then continued to fall below $23,000, its lowest point in 18 months, it might have seemed like just another point of red on the downward continuum, another “crypto winter” that, its advocates will tell you, is part of a natural cycle that strengthens and purifies the market. And maybe it is. But the crash this weekend looks like more than just a reset after things got too hot — there are signs that the system could be breaking and that the money propping it all up was less solid than it seemed.

8 June
What are cryptocurrencies and how do you use them? Everything you need to know as a beginner
(Euro News) Cryptos are just like any other currency. You can buy goods and services with them or trade with them. Where they differ from traditional paper currencies we have in our wallets is that there are no physical coins or notes – the money is completely virtual.
Units of cryptocurrency can be bought from brokers or generated through an online process called “mining” and used to make payments or store money anonymously.
While they are popularly depicted as coins similar to casino chips, the physical coin is worthless without the printed code inside it.
According to Investopedia, there were more than 4,000 cryptocurrencies in circulation at the beginning of 2021. More and more are being launched all the time.
Some have also criticised cryptocurrencies for being environmentally unsound. The surge in their use (particularly Bitcoin) has meant growing demand for the computer hardware needed to run the technology that sustains them. The process of mining – unlocking reward coins by validating blocks with randomly generated numbers – has also spurred the use of energy-guzzling supercomputers to do the mathematical heavy lifting. (8 June 2021)
When China and other big countries launch cryptocurrencies, it will kick off a global revolution
Liang Zhao, Doctoral Researcher, Lund University
(The Conversation) One of the hottest topics in cryptocurrencies is the prospect of major economies launching state-backed digital coins. China’s central bank recently accelerated plans for what is currently known as the Digital Currency Electronic Payment (DCEP). It could launch within the next 18 months, while the European Central Bank is looking at something similar.
Meanwhile, Russia has been working on a state-backed cryptoruble for several years, and Sweden has its e-krona project. Indeed, several countries have got there already: Senegal and the tiny Marshall Islands now have digital coins that sit alongside their existing currencies, while others such as Venezuela and Ecuador have tried but failed to gain traction. (December 12, 2019)

6 June
How crypto giant Binance became a hub for hackers, fraudsters and drug traffickers
(A Reuters Special Report) As Reuters reported in January, Binance kept weak money-laundering checks on its users until mid-2021, despite concerns raised by senior company figures starting at least three years earlier. In response to that article, Binance said it was helping drive higher industry standards and the reporting was “wildly outdated.” In August 2021, Binance compelled new and existing users to submit identification.
With around 120 million users worldwide, Binance processes crypto trades worth hundreds of billions of dollars a month. The sector was hit by a sharp correction in May, its overall value slumping by a quarter to $1.3 trillion. [Binance CEO Changpeng]Zhao said he saw “new found resiliency” in the market.
The flow of illicit crypto through Binance, identified by Reuters, represents a small portion of the exchange’s overall trading volumes. Yet as policymakers and regulators, including U.S. Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde, voice concern over the illegal use of cryptocurrencies, the trade demonstrates how criminals have turned to the technology to launder dirty money.

21 May
Crypto is starting to lose its cool – just look at El Salvador
Rowan Moore
Fantasies of a Bitcoin City have been undermined by the country’s huge losses in cryptocurrency
(The Guardian) To its evangelists, bitcoin is a frictionless, empowering form of money that liberates citizens of the world from the shackles of banks and national governments. To sceptics, the cryptocurrency is a tool of kleptocrats and gangsters, environmentally monstrous in its consumption of energy, a digitally glamorised Ponzi scheme whose eventual crash will most hurt those least able to afford a loss.
Prepare for Recession: Musk and Goldman Sachs’ Blankfein Weigh In; Galaxy Digital’s CEO Talks on Terra Collapse — Bitcoin.com News Week in Review

19 May
Remember him? The charmer who raised the price of the life-saving drug Daraprim from $13.50 per pill to $750. Although he is barred from the pharmaceutical industry for the rest of this life, I cannot believe he won’t find another nefarious activity.
“I Started Using Uniswap in Prison”: Martin Shkreli
On an early Saturday Twitter Spaces call, the controversial entrepreneur discussed his thoughts on the future of Bitcoin and DeFi to an audience of crypto enthusiasts.
Shkreli decried the process of buying stocks in the U.S., suggesting that DeFi could improve the experience. “The idea that I can’t buy a Tesla share without going through this SEC apparatus and all these other steps is kinda nuts… there are people breaking the silo and trying to destroy it forever, I hope.”

17 May
The Great Crypto Grift May Be Unwinding
As an inevitable crash occurs, many of the swindles and alleged swindles are coming to light.
By John Cassidy
Last week, federal prosecutors arrested a fifty-year-old Long Island man and accused him of defrauding hundreds of investors by offering them gains of five per cent per week—yes, per week—from a fictional crypto-trading platform. …the indictment came during what is increasingly looking like the unwinding of the great crypto “bezzle.” The term comes from John Kenneth Galbraith’s classic account of the 1929 stock-market crash, and it refers to the “inventory of undiscovered embezzlement” that builds up during speculative booms, when investors become ever more credulous and rising prices create the appearance that real wealth is being created. In this halcyon part of the cycle, Galbraith noted, “the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.” It is only after the inevitable crash occurs that many of the swindles, and alleged swindles, come to light.
The day before Alexandre’s arrest, Europol, the E.U.’s law-enforcement agency, placed Ruja Ignatova, the German inventor of the OneCoin cryptocurrency, on its most-wanted list, for “having induced investors all over the world to invest in this actually worthless ‘currency,’ ” which has produced a total loss that “probably amounts to several billion” dollars. Earlier this year, the F.B.I. arrested a New York couple and accused them of helping launder billions of dollars in stolen bitcoin.

16 May
$3 billion in bitcoin was sold in a last-ditch attempt to save UST stablecoin from collapse
The debacle rippled through crypto markets, wiping out more than $200 billion of wealth in a single day. Bitcoin on Thursday briefly fell below $26,000, its lowest level since December 2020. The world’s biggest cryptocurrency was last trading at $29,526.75, down 1.4% in the last 24 hours.
Don Pittis: Crypto markets tumble and investors get their fingers burned
Canadian fintech scholar who warned of meltdown says economy will feel impact
(CBC) People who put their hard-earned cash into a tumbling cryptocurrency unit that is at the heart of the latest sharp decline in digital coins may be regretting they did not read a recent paper by Canadian financial technology scholar Ryan Clements demonstrating why it was bound to fail.
Now, other financial commentators are echoing his warning that this time, the loss of more than a trillion U.S. dollars in asset value from world cryptocurrency markets will have an impact well beyond the “crypto bros” who put in their own money.
But as Canadians who still hold a stake wait to see what Friday the 13th will do for asset values, Clements said the past week’s crypto sell-off has settled a few questions. One is whether, like gold, the limited supply of the most important cryptocurrencies means they are a hedge against inflation or against the decline of other risk assets. We now know they are not.
As inflation has climbed and markets have declined, even the best-known crypto token, bitcoin, was trading down nearly two-thirds from its peak of $69,000 in November of last year.
There were reports on Thursday that El Salvador, which has accepted bitcoin as legal tender, had lost $40 million US — enough for the cash-strapped Central American country to cover its next bond payment — and credit rating agencies warn of an increased risk of default.

13 May
Cryptocurrencies: why they’ve crashed and what it could mean for their future
By Gavin Brown, Associate Professor in Financial Technology, University of Liverpool; Richard Whittle, CAPE Policy Fellow, UCL; and Stuart Mills, Fellow of Behavioural Science, London School of Economics and Political Science
(The Conversation) Some (but not all) stablecoins rely to a large extent on perception and confidence – and once this is shaken, big falls can come into effect.
Crucially, the recent major falls in cryptocurrencies have called into question just how stable stablecoins really are. After all, they are designed to have practically zero volatility by maintaining a “peg” to some other underlying asset.
… For if stablecoins aren’t stable, then where is crypto’s safe space?
How investors respond will be key to the future of cryptocurrencies. We have already seen panic and despair, with some comparing this crash to a traditional run on the banks. But with bank runs, customers tend to be worried that their bank will be unable to give them their money, rather than worrying that their money has become worthless.
A more accurate comparison is with stock market crashes where investors worry that the stocks and shares they hold may soon be worthless. And so far, reaction to this crypto crash suggests that a large section of crypto holders view their investments in a similar way.
Stablecoin volatility shows an urgent need for regulation to protect consumers

11 May
The Crash of Crypto’s Perpetual Wealth Machine
(New York) This week…Luna and its partner coin, Terra, both imploded in spectacular fashion. Terra is supposed to be trade reliable at the value of exactly one U.S. dollar, but it plummeted to 29 cents on Wednesday morning. Luna was down 99 percent since its highs last month. More than $40 billion in wealth — no small part of it from retail investors — was gone in a matter of hours. The shock of the sudden collapse sent the price of bitcoin falling to its lowest point since July, exposing how a coin labeled a Ponzi scheme by its critics had impacted the larger market in digital assets. Meanwhile, shares in leading U.S.-based crypto exchange Coinbase were off by 25 percent, and the trillion-dollar-plus crypto industry is teeming with rumors about large funds or companies that may be on the brink of failure.
Many of the same crypto players who today are much poorer and more anxious than they were a week ago used to be vocal fans of the Terra-Luna currency duo. [Do] Kwon, a 30-year-old resident of Singapore and, naturally, a Stanford graduate, launched the coins in 2018, but they really caught fire among crypto speculators only in the past few months.
The other side of the Bitcoin
Philosophy professor David Morris: ‘There is a tension between cryptocurrency as a technology and social issues that are key to currencies and finance’
By Damon van der Linde, BA 08
(Concordia University Magazine) Part of the appeal of Bitcoin and other digital currencies is that many are deliberately untethered from the monetary policy, inflation rates and economic growth measurements that influence conventional currency values.
Instead of relying on trust in banks, governments or other people — as is the case with government-issued currencies — currently most cryptocurrencies depend on intense computation, or “mining,” to validate and approve transactions, in ways that prevent theft or fraud

27 April
Bitcoin ban: These are the countries where crypto is restricted or illegal
(Euro News) Bitcoin has been controversial since its beginning in 2009, as have the subsequent cryptocurrencies that followed in its wake.
While widely criticised for its volatility, its use in nefarious transactions and for the exorbitant use of electricity to mine it, crypto is being seen by some, particularly in the developing world, as a safe harbour during economic storms.
El Salvador became the first country to make it legal currency in September 2021, followed now by the Central African Republic in April this year.
But as more people turn to cryptos as either an investment or a lifeline, criticisms of crypto have continued to manifest in an array of restrictions on their usage.
The legal status of Bitcoin and other altcoins (alternative coins to Bitcoin) varies substantially from country to country, while in some, the relationship remains to be properly defined or is constantly changing.

18 April
From niche technology to mainstream market
Though blockchain-based currencies like Bitcoin and Ethereum are still evolving, Concordia experts agree: They’re reshaping the global financial industry.
By Damon van der Linde, BA 08
(Concordia University Magazine) The genesis of blockchain-based currency can be traced to a nine-page paper published in 2008 by the mysterious Satoshi Nakamoto, the pseudonym of the person or people who created Bitcoin.
“The initial intention of cryptocurrency was not to replace the American or Canadian dollar — it was an experiment,” says Boulianne.
“It became a revolution for those who disagree with the established financial system.”
Bitcoin was issued in 2009 as the world’s first digital currency. As of February 2022, more than 10,000 cryptocurrencies have been created, often by companies seeking to raise money through initial coin offerings (ICOs).

12 December 2019
When China and other big countries launch cryptocurrencies, it will kick off a global revolution
Liang Zhao, Doctoral Researcher, Lund University
(The Conversation) Today’s [international monetary] system dates to the Bretton Woods conference of 1944, in which to create a stable trading environment the Allied nations agreed to peg their currencies to the US dollar and the US agreed to peg the dollar to gold.
While technological change has been incredibly fast in the information era, the system of international payments has lagged behind. But once sovereign digital currencies start taking off, this will suddenly change.

One Comment on "Cryptocurrencies"

  1. Diana Thebaud Nicholson July 3, 2022 at 9:54 pm · Reply

    Chris Goodfellow:
    Crypto broker Voyager Digital suspends trading, deposits, and withdrawals
    Another one bites the dust. You have to be nuts dealing with these so-called crypto exchanges. In a severe liquidity squeeze they will all fold up. Not everyone can rush to the door when the market plummets. There is no deposit insurance nor government backstop on any of these firms.
    Some of these exchanges claim they have lines of credit and backstop investors that will step up to provide liquidity but this is mostly hot air as the backstop firms themselves are levered to the hilt and if margin loans are called it brings the whole house of cards down.

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