Poker Chips Economy

Poker Chips Economy

By xuanling11 | Crypto Learning | 22 Sep 2021


SEC’s chairman Gensler doubts stablecoin, and he believes it acts like casino poker chips. Stablecoin is part of the Decentralized Finance (Defi) invention that pegged fiat currency to stabilize its valuation.

 

Why the government concerns?

What makes the government powerful is they have monopoly power over the money supply. There hasn’t been any challenge over this money power until the invention of stablecoin.

 

The way stablecoin to be stable

 There are four ways to stabilize the cryptocurrency price: backed financial assets like commodities, fiat currency, cryptocurrencies, or artificial through an algorithm. 

 

Stablecoin got no value

Similar to fiat currency, it got no value but through trust. Stablecoin may get no value but some mix of assets.

 

Fiat currency has its financial backed assets

Fiat currency is stablecoin like too. However, it got debts backed, which is different than stablecoin with true assets.

 

Why are true assets worth less than debts?

True assets do not have working capital! If someone owes you something, they have to work on it to pay you off. Therefore, true assets valuation is created out of thin air as appraisal valuation. 

 

Stablecoin companies can become commercial Federal Reserve

Stablecoin can become its own Federal Reserve to supply money to others exactly like the Federal Reverse but more efficient. The government fears that stablecoin to challenge their authority, and they want to regulate them.

 

Stablecoin is risky due to overleveraging assets backed

The government was nerve-racking because stablecoin did not perform as stable as it claimed to be due to unclear assets quality backing.

 

Government’s response of stablecoin

One response is CBDC or Central Bank Digitial Currency. The only difference between CBDC and stablecoin is that CBDC is a centralized financial system controlled by the Central Bank.

 

Two types of stablecoin to counter-argue the government

As much as the flexibility of stablecoin, it can divide into two types, true stablecoin, and deposit stablecoin.

True stablecoin is a non-interest-bearing coin that stabilizes its value against the reference currency through 1:1 liquid assets backing.

Deposit stablecoin is an interest-bearing coin that payout of interest periodically as bond-like security to help fund projects and pay later.

They can resolve issues of possible make prices consistent with over-leveraging assets.

 

Dangerous of CBDC

CBDC will not resolve the current poker chips economy with an over-supply quantity of money but make the privacy issues even worse. Citizens will have to supply their financial transaction information to the government to exchange power to spend their money.

 

Stablecoin can prevent privacy issues

Stablecoin is a type of cryptocurrency, and it can protect your privacy to a certain extend. It is quasi-anonymous to shield your privacy to a certain extent without possibly leak too much to another party.

 

In conclusion

Stablecoin is an answer to the Central bank’s reckless inflated currency. It may not resolve all issues, but it is a step to lead in the right direction.


Photo by Mimi Di Cianni on Unsplash
  

Related articles to reference here ⬇️⬇️:
-------------------------------------------------------------------------------------
Stablecoin
Stablecoin is Not So Stable
Stablecoin: We Ever Need Them More Than CBDCs
-------------------------------------------------------------------------------------
CBDC
CBDC: Stablecoin 2.0 or Stablecoin Killer
Chinese CBDC: the Ultimate Financial Weapon or Just another Copycat
CBDC vs Cryptocurrency: the War of Privacy
Game of Three Kingdoms: CBDC vs. Cryptocurrency vs. TechCoin
Why Crypto Got So Political Suddenly: The Beginning Tale of Government Crypto Surveillance Program
CBDC's Cross Border Payments System: Worse than Crypto
-------------------------------------------------------------------------------------
Defi
DeFi Swap: Great Returns come with Great Cost
Defi: A Rainbow 5-Layers Cake
Robot Sucks: How Lousy Jobs AMMs Did to Ruin the DeFi
Defi Winter: What May Come After the Bubble Pops
-------------------------------------------------------------------------------------
Defi Manual
Defi Manual: Part 1 - Cefi vs. Defi
Defi Manual: Part 2 - Regulations
Defi Manual: Part 3 - Financial Weapons
Defi Manual: Part 4 - Market Manipulation
Defi Manual: Part 5 - Synergies
-------------------------------------------------------------------------------------
Inflation
Inflation vs. Bitcoin: How Speculation to Hedge Inflation has Failed in Short Term but may Create Opportunity in Long Term
Hypothetically, What if the Fed Fails to Control Inflation, Will Crypto Save Us?!
Currency Debasement: Cryptocurrency Inflation Hedge Hypothesis Still Hold
-------------------------------------------------------------------------------------
Gold
Gold vs. Bitcoin: Digital Twin or Enemy
-------------------------------------------------------------------------------------
Volatility
Volatility of Bitcoin: Threat or Opportunity
-------------------------------------------------------------------------------------
Recent News
Lesson Learn from Robinhood IPO: Era of Crypto Exchange Comes to an End or a New Beginning?
City Coins: Are they the Era of New Coins?
The End of Era for Crypto Exchange Platform?!
Crypto Hacking: How Did it Really Happen?
Jack Dorsey’s Ambitious: Twitter wants to Become a Place of Freedom of Speech
Legendary Hacker: the White Hat into the Rescue
The Future of Cardano: as Clear or as Uncleared?
Patent the Blockchain: the Nonsense Action Shows a Worry from Big Tech Companies
Forget about Trade War: New Era of the International Trade
Epic Games vs. Apple: Tech Companies Crypto Adoption May Begin
Litecoin Fake News: How Fake it is?
-------------------------------------------------------------------------------------
China FUD
China FUD: Are We Done Yet?
Bitcoin Mining Recover?! The Chinese vs. The U.S Strategy of Blockchain
Red Alert: Lesson Learns from the Nearly Cashless Nation
Have We Ever Learn Anything from 2008?! To Print or Not to Print?!
-------------------------------------------------------------------------------------
SEC FUD
SEC vs. Ripple: the Endless Game of War
SEC vs. Defi: What is the goal of the Defi?
The SEC Defi Investigation: The Decentralization Theater
Coinbase Regulation Probe: The Future of Crypto Lending
-------------------------------------------------------------------------------------
NFT FUD
NFT: Digital Solution or Delusion?
NFT: The Future of Gamers' Assets
NFT Bubble: Does it Really Matter ?!
NFT Bubble May Just Almost Pop
Are We Popping NFT Bubble Yet?!
-------------------------------------------------------------------------------------
FOMO FUD
The World Without An Expert: Expert ≠ Rich
Satoshi Nakamoto's Statue: Should We Worship Him/Her?!
Tech Coin: The Coin We May Not Want to Own
Crypto Companies: Another Tech Giants or New Era of Tech
-------------------------------------------------------------------------------------
Miscellaneous
Where are We Position Crypto at : the Problem with Money and Wealth
What Categories Does Bitcoin Belong to or Does it Really Matter?
Quantum Financial System: The System Lost Itself in Quantum World
Crypto Hot Hub: The Best Place to become Crypto Incubator
Break the Fourth Wall?!
We Are Short for the Dollars: The Dollar's Liquidity Issue
Fiat vs. Crypto: Religion vs. Science or Vice Versa
-------------------------------------------------------------------------------------
Bitcoin Digest
Is Bitcoin Untraceable Anymore?! It Depends!
Currency Comparison: Bitcoin vs Dollar
Bitcoin ETF May Not Be Such a Great Idea
Bitcoin Lightning Network Explain
-------------------------------------------------------------------------------------
Ethereum Digest
Ethereum London Hardfork: How Hard does It Actually Fork?
Did the U.S. government just thumbs up on Bitcoin and down on Ethereum after the London Hardfork?
EIP-1559: The Future of Ethereum Economy
Ethereum Got Update Bug: A Blockchain Synchronization Problem
Buterin's Regret: Ethereum 8 Co-Founder Things
Can Cardano Really Kill Ethereum?!
Cardano is Smoking or Vision the Future
-------------------------------------------------------------------------------------
Shitcoin Economy
The Legendary of Shitcoin: Meme to the 🌓 or Unique of 💎 or Simply just 💩
Crypto Economy: the Untold Speculative Financial System We will Live?
Shitcoin Economy: Part 1 - Category
Shitcoin Economy: Part 2 - Regulations
Shitcoin Economy: Part 3 - Environment
Shitcoin Economy: Part 4 - Technology
Shitcoin Economy: Part 5 - Detokenization
-------------------------------------------------------------------------------------
Doge Economy
Doge 2.0: Who Let The Dog Out?!
Dogecoin 2.0: Doge Breeder Era
-------------------------------------------------------------------------------------
Energy FUD
Bitcoin's Energy Concerns, Scalability and the End of Bitcoin Prediction
Unknown Author’s Hypothesis: Creator of PoW and PoS Hybrid Blockchain
-------------------------------------------------------------------------------------
Tokenoconomy
Tokenism: An Old Idea Get A New Invention
-------------------------------------------------------------------------------------
Crypto-regulation
Legal Framework of Virtual Currency
The Cantillon Effect: The 18th Monetary Curse About to be Broken
-------------------------------------------------------------------------------------
Machine War
Artificial Intelligence vs. Blockchain: the Future of Machine War
Crypto War I: Birth of Public Key Cryptography
Crypto War II: Birth of Decentralized System
-------------------------------------------------------------------------------------
Disclosure: The article was written by a delusional author who is possibly a nut job without any questions whatsoever about expertise in the subject matters. You should not believe any words this author wrote or you may experience similar symptoms or even possibly become a nut job.

How do you rate this article?


10

0

xuanling11
xuanling11

A delusional author who is possibly a nut job without any questions whatsoever about expertise in the subject matters to write with a freestyle.


Crypto Learning
Crypto Learning

All article was written by a delusional author who is possibly a nut job without any questions whatsoever about expertise in the subject matters.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.