include("cmp.php");

Romantic Myth of Crypto Currency

My friend sent me links on Crypto Currencies to show that it can be a “Currency” or “Money” and why people supported such Money.

One of the articles has a very romantic reasoning, they are against the monopoly of money creation by the government or ruling elites as they view this as a “Pyramid Ponzi” scheme controlled by the King’s or ruling elites.

They want to “liberalize” this “Concentration of Power” of money creation, allowing everyone and anyone to “print” or “create” their own money!

I regard this as a very Romantic Idealism which is totally misplaced.

Everyone can actually “create purchasing power” as long as you can produce something that other people need, want or willing to pay for it. Money is just the medium of exchange which is used to price or determine the value of what you have produced.

Money is primarily, a medium of exchange and its value lies in its purchasing power, not the intrinsic value of the paper it was printed on.

We allow the government to print money so that it could relocate resources to produce various public goods like roads, park, defence etc. Of course the printing of money has an important caveat, it should not be excessive as compared to the amount of goods and services the country could produce, else it will result in inflation or worse, collapse of the public trust in its Currency.

Creation of money supply could also be done via the creation of credits of loans by the financial institutions like banks. This is linked to interest rates and they are all linked to the well being of the economy.

It is naively romantic to think that creation of money or printing of money is everything and only thing matters.

Although the value of currency depends on the purchasing power it could exert, but it is totally by different in purchasing power creation vs money creation.

One could gain something by producing something which can be sold and thus giving him a purchasing power. But this purchasing power will only end with him.

But if we are having everyone and anyone to produce money or currency which will also benefit him by giving him purchasing power, but that doesn’t end there. The money created and spent will go into circulation and increase the money supply.

Thus, if there is infinite amount of money that could be created by everyone, it will end up with hyperinflation! It is no different from a government going into crazy unlimited printing of money!

This reason alone invalidates the Romantic notion and aim of Crypto Currency empowering everyone to create money.

It would be have a disasterous effect if everyone could just anyhow print or create money instead of goods of services to benefit the society.

 

Goh Meng Seng

 

 

yyy
READER COMMENTS BELOW

8 Responses to “Romantic Myth of Crypto Currency”

  • MarBowling:

    “Thus, if there is infinite amount of money that could be created by everyone, it will end up with hyperinflation! It is no different from a government going into crazy unlimited printing of money!” Unquote!

    Response: Original Holee price of ONE SHITCOIN oops BITCOIN was UD$1. As it’s peak, it’s was UD$68k before it drops to current price of UD$29k. Some Joker like Cathie Wood is PREDICTING that the price would EVENTUALLY reach UD$500,000. Like the fiat currency PRINTED like cra$y by the Central Bank(in US it’s the Fed)of Major CUNTRIES, VERY LITTLE PRODUCTIVITY ACTIVITIES ARE CREATED AND PROMOTED TO JUSTIFY THE HUGE AMOUNT OF “MONEY” or “PURCHASING POWER” THAT ARE CREATED OUT OF THE THINNEST AIR aka QE, CRYPTOCURRENCY IS ACTUALLY ANOTHER MASSIVE CREATION OF “MONEY” or SO-CALLED ARTIFICIALLY CREATED “PURCHASING POWER” with PLAYERS GO FOR QUICK PROFIT$ BUYING AND SELLING WITH THOSE “FORTUNE$” CREATED OUT OF THIN AIR(JUST LIKE THE RELENTLESS MASSIVE PRINTING OF FIAT CURRENCY). Now with billionaires “PLAYING and SUPPORTING” the SHITCOIN oops BITCOIN(and also other crypto currencies)it will take a while BEFORE SOME KIND SOUL(PROBABLY SOME INFLUENTIAL COVERMENT OFFICIAL OF UNCLE SAM)WOULD BLOW THE MOTHER OF ALL BIG WHISTLES TO RUSH FOR THE EXIT! GOOD LUCK!

    GD Star Rating
    loading...
  • the food chain:

    //they are against the monopoly of money creation by the government or ruling elites as they view this as a “Pyramid Ponzi” scheme controlled by the King’s or ruling elites.//

    aiyoh. at least there is a collective face (garment, sovereign nation, etc) to it for fiat currency ?? and if the system weakens or near collapses, theoretically people will demand (or rebel ?) for quick corrective action to be taken to address it ???

    King or ruling elites will always rule the food chain below, the reason why it is good (a system or mechanism ???) to have the power of King (if it can be done) or ruling elites to be democratized and circulated among different people so that it does not stay concentrated and gets too “toxic” after a long time ???

    as for cryto, who will back it and many articles already written that it is mostly speculative OR used for ‘illicit’ purposes ????

    GD Star Rating
    loading...
  • xoxo:

    Crypto currency will be like a wet dream that turns into a nightmare.

    GD Star Rating
    loading...
  • Asd:

    I think you should be able to get a job at world Bank ar

    GD Star Rating
    loading...
  • opposition dude:

    Main difference between cold hard coins and dollar notes vs digital Bitcoin is the backing from a country’s government. Why old fashioned notes and coins has been so successful over the decades is because people have the TRUST and FAITH in it and it’s also backed up by their country’s government.

    Virtual currency isn’t backed by governments so this leads to fear and unknown among people who do not use it. Sure the going is good when you invested say $5000 in buying crupto when it was low and shot up to as high as 60k and you made a killing, it’s no different than investing in forex.

    So until the day comes when governments and people are comfortable with virtual currency as we all are with physical currency the stories of crypto will be non stop on how it will crash and all that. In a way, when we deal with cashless transactions it’s akin to crypto since, for example, you top up your EZ-Link using your Nets and not with cash although the cash is recorded down as moving out of your bank account to LTA.

    GD Star Rating
    loading...
  • Western fan:

    Why not? When USD become junk, that will happen. The west is sanctioning until nobody want to hold USD, US assets or USD reserve. Every non-western country now knows the very real risk in holding such stuff. Any moment they are not happy, they confiscate all your assets in the west.

    We should ask how much asset the pappies have in the west. Are they being held ransom? Are the gov policies affected?

    MarBowling: Some Joker like Cathie Wood is PREDICTING that the price would EVENTUALLY reach UD$500,000.

    GD Star Rating
    loading...
  • xoxo:

    Free of Central Banks’ and govts’ *intervention*(CONTROL)?
    Tell you its going to be *BIG TIME CROOK$* IN FULL CONTROL with cryoto$.

    How is crypto going to help formulate *monetary policies* that are necessary at different stages of economic cycles?

    Crypto is likely to bring about more serious financial issues/troubles globally.

    Ease of use?
    Free from sinister manipulation?
    Already,in recent times,BITCOIN HAS BEEN EXTREMELY MANUOULATED BY ITS *EARLY ACQUIRER$*,hasnt it?
    From a few U$ ,it went into hundred$ ,then into thou$ands,tens of thousands up to $65K PER UNIT?
    THAT IS EASE OF USE N FREE OF *CONTROL*???

    I SAY BITCOIN SHUD BE RENAMED BIT-CON!

    GD Star Rating
    loading...
  • panyusg:

    I am buying Gold. No fiat currency is safe. I will sell my gold bit by bit when I need money to purchase goods to sustain my living.

    GD Star Rating
    loading...

Leave a Reply

 characters available


Scroll Down For More Interesting Stuff


Member Services
Self-SupportMembers LoginSelf-Support
Sponsored Advertisement
Search On TR Emeritus
Sponsored Advertisement
Announcement
Advertisements
Visitors Statistic
Latest Statistic

UA-67043412-1