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The Next Generation Of Currency Wars: Private Vs State-backed Crypto

Recently Russia announced that it will be unleashing a CryptoRuble, just a week after Vladimir Putin strongly criticized Bitcoin and other private cryptocurrencies. When announcing the move, Minister of Communications Nikolay Nikiforov acknowledged that it was in part inspired by the aim of getting ahead of other governments:

I confidently declare that we run CryptoRuble for one simple reason: if we do not, then after two months our neighbors in the EurAsEC will.

In doing so, Russia is following the lead of another country that too has become hostile to private crypto, China. Last July the People’s Bank of China became the first central bank to announce it had developed a crypto-prototype that it plans to offer alongside the traditional renminbi.

That the first forays into state-backed cryptocurrency comes from two countries with a history of restricting a free and open internet is not surprising. While Bitcoin originated as a way to opt out of government control of money supply, increasingly governments see the underlying technology as a way to increase their control of the economy.

As Xiong Yue explained:

" For example, if the government plans to subsidize certain farms, say some corn farms, to support this sector of agriculture, they can directly add a certain amount of money to the wallets of some farms, for instance 100 million dollars and program this money to be sent to certain fertilizer merchants at a certain time, and that each can only spend maximum of 10 million dollars per year, and in this way, they can make sure that the farmers won’t squander the windfalls, and that this money won’t flow to other sectors, for instance, the stock market or real estate market. Even though this kind of monetary policy is bound to fail,

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from the perspective of government officials, CBDC provides them a better tool. For them, with the help of the CBDC, they can plan and manage the economy better."

Not to be left behind, the IMF – who some analysts, such as Jim Rickards, believe is prepared to step up to replace the US dollar as the next global reserve currency – recently opened the door to issuing their own cryptocurrency in the future. While some crypto-advocates have naively celebrated recent comments by Christine Lagarde on the future potential of digital currency, such praise simply reflects the increasing awareness of technocrats that the finance is changing and they must be prepared for it. Considering central banks around the world have continued to advance their war on cash, it is not surprising to see Lagarde and others come adapt to the concept so quickly.

Exchange Regulation
The usefulness of state-controlled crypto is why we should expect increased scrutiny and regulation on private cryptocurrency exchanges.

It's been reported that the Chinese government, which shutdown private crypto-exchanges in September, is looking into reopening exchanges with increased regulation. Russia, too, is working on exchange regulation, rather than an outright ban. This apparent change in direction may be the consequence of China’s exchange ban resulting in an increased use of peer-to-peer platforms in the face of the government crackdown.

For the same reason that government prefers regulated bank accounts to cash and safes, state officials may recognize the benefit to propping up licensed exchanges. Already we have seen numerous cryptoexchanges be willing to collect and hand-over sensitive customer information in exchange for government-issued licenses. Much like banks, these exchanges are increasingly being enlisted as tax collectors for government.

Calm Before the Storm?
While this loss of privacy may outrage Bitcoin’s initial supporters, it’s understandable why many current holders may be perfectly happy with these developments. After all, while much of Bitcoin’s initial appeal was its usefulness in black markets, a major reason for its astronomical rise in value is its increasing appeal among average customers who were never all that concerned with financial services regulation. Not only has it helped its appeal as an investment, but also its daily use. Japan, for example, saw a major surge in retailers accepting Bitcoin once a firm regulatory framework was implemented.

It is worth wondering whether this harmony between government and consumers will continue, however, once state-controlled crypto truly ramps up.

After all, we’ve already seen government rely upon traditional boogeymen of terrorists, drug dealers, and other criminals as justification for their increased control. The increasing use of Bitcoin by hackers and extortionists provides a modern-day twist to these age-old scare tactics. Is it all that difficult to foresee a scenario where governments attempt to freeze all regulated exchanges in the aftermath of some terrorist attack or other scenario? Or go one step further, and legally mandate replacing a privately-held asset for a government-issued currency?

The example of China demonstrates the inherently decentralized nature of Bitcoin will likely always ensure a degree of functionality beyond the reach of government. At the same time however, the increased popular appeal of crypto-currency also means increasing reliance on third-party services, and fewer individuals securing their investments in private wallets. Since the most popular – and thus most lucrative – exchanges and other services have an inherent incentive to maintain a good relationship with legal authorities, it is easy to see how this easily plays to the benefit of government officials.

Already within the industry debate is raging between those who prioritize “efficiency” and mainstream appeal – even at the expense of crypto's decentralized-origins. Luckily, Bitcoin’s original Austro-libertarian ethos means that we are likely to see major industry influence pushing back on state-control.

A Preemptive Strike for Monetary Freedom
In the meantime, this is yet another reason why what little political capital libertarians on monetary policy have should not be wasted pursuing moderate reforms such as forcing the Fed to embrace rules-based monetary policy. There is no hope to ever transform the Federal Reserve into a useful – or even non-harmful – institution. That hope does exist, however, in crypto.

As future monetary policy is soon to become a major topic of conversation as President Trump rolls out his Federal Reserve nominations, it would be a major loss for the cause to not see Senator Rand Paul and other Fed-sceptics use the opportunity to push discussion about the need for competition in currencies. Further, the recent surge in states that have legalized the use of gold and silver for the payment of debt means there has never been a stronger political case for the elimination of legal tender laws and the taxes imposed on alternative currencies like Ron Paul proposed when in Congress. Such a move now could help set the stage for America being a true safe haven for private crypto in the future.

Doing so may give the cryptocurrency industry the freedom to give us a fighting chance to truly end the Fed, and their clones around the world.

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Cryptos Are Crashing Again

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Largest Crypto-Mining Exchange Confirms It Was Hacked, Over $50 Million In Bitcoin Stolen

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Criminals Abandon Bitcoin As Privacy Weakens

While the establishment would like the world to believe that only criminal masterminds and people with something to hide would prefer the decentralized freedom of Bitcoin (as opposed to the 'under government watch' banking system that floats Washington's boat), the truth is that the biggest cryptocurrency is considerably less 'anonymous' than is commonly exclaimed.

In fact, as more and more criminals become aware of the real privacy concerns of Bitcoin, they are increasingly turning to other - more private - coins.

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Originally posted by 6IXSTRINGJACK:
The videos I had seen about bitcoin weren't just about speculation. They were touting Bitcoin as the "perfect currency".... One that could not be managed by banks, or split on Congress' (or any other government's) whim.

I dunno... doesn't the fact that it was less than 50 bucks a year ago and is now nearly $15,000 per "coin" kind of eliminate most of it's intrinsic value? How is this supposed to be used as currency when nobody but the uber-rich can afford a single one?

The ONLY thing I see going for it right now is that there is (supposedly) a finite amount of them. At the end of the day, all it is, is 1's and 0's.


I don't know how the speculation happened and how it reached this level, and I don't know when the bubble is going to burst, but what I think we're witnissing here is the prelude to a crash so hard that people will never use crypto-currency again, no matter how much of a "perfect currency" it has the potential of being. You won't be able to buy anything with it if nobody will accept it as payment. Unlike Federal issued USD, there is no laws anywhere I know of that say it is against the law for any business not to accept it as payment.

Do Right, Be Right. :)

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Originally posted by JAYNEZTOWN:
Bitcoin Crashes as Major Crypto Country Shuts Down Entire Internet
https://futurism.com/the-byte/bitcoin-crash-turmoil-kazakhstan

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The whole system relies on traders actually being able to exchange tethers* for real cash or — far more commonly in practice — other traditional cryptocurrencies that can be sold for cash on banked exchanges like Coinbase or Gemini, both headquartered in the United States.

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... iFinex... is printing tethers from thin air and using them to buy up Bitcoin and other cryptocurrencies in order to create artificial scarcity and drive prices higher.
... private companies issuing stablecoins (like tether) are indiscriminately inflating cryptocurrency prices so that they can be dumped on unsuspecting investors.

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In the case of cryptocurrency, regulation is an existential risk precisely because regulatory loopholes and fraud are the only reason the industry appears profitable despite being wholly unproductive and a waste of energy resources. The same applies to private cryptocurrencies as a whole. The longer governments take to ban them, the worse normal people will be hurt.

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Originally posted by 1KIKI:

I'm only partway through the article, but I see this as important:

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The whole system relies on traders actually being able to exchange tethers* for real cash or — far more commonly in practice — other traditional cryptocurrencies that can be sold for cash on banked exchanges like Coinbase or Gemini, both headquartered in the United States.

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Basically, people aren't holding or exchanging crypto because they think crypto is in itself so valuable. It's only a mechanism to get more real cash.

So the idea of crypto being a 'currency' is already falling apart. It's morphed into a craze-based collectible for trading - like tulips - in order to acquire real money.

*a cryptocurrency pegged to the dollar, 1 tether = 1 dollar

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Originally posted by 6IXSTRINGJACK:
The videos I had seen about bitcoin weren't just about speculation. They were touting Bitcoin as the "perfect currency".... One that could not be managed by banks, or split on Congress' (or any other government's) whim.

I dunno... doesn't the fact that it was less than 50 bucks a year ago and is now nearly $15,000 per "coin" kind of eliminate most of it's intrinsic value? How is this supposed to be used as currency when nobody but the uber-rich can afford a single one?

The ONLY thing I see going for it right now is that there is (supposedly) a finite amount of them. At the end of the day, all it is, is 1's and 0's.


I don't know how the speculation happened and how it reached this level, and I don't know when the bubble is going to burst, but what I think we're witnissing here is the prelude to a crash so hard that people will never use crypto-currency again, no matter how much of a "perfect currency" it has the potential of being. You won't be able to buy anything with it if nobody will accept it as payment. Unlike Federal issued USD, there is no laws anywhere I know of that say it is against the law for any business not to accept it as payment.

Do Right, Be Right. :)

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Originally posted by 1KIKI:

In regards to cryptos and tulips, here's the link to Project Gutenberg's copy of

Extraordinary Popular Delusions and the Madness of Crowds
https://www.gutenberg.org/files/24518/24518-h/24518-h.htm#tulipomania]

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“The tulip next appeared, all over gay,

But wanton, full of pride, and full of play;

The world can’t shew a dye but here has place;

Nay, by new mixtures, she can change her face;

Purple and gold are both beneath her care,

The richest needlework she loves to wear;

Her only study is to please the eye,

And to outshine the rest in finery.”

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You want purple in 2022 it's going to cost you.



Isn't she beautiful? She can be yours for the low, low price of only $241.99.

https://opensea.io/assets/0x495f947276749ce646f68ac8c248420045cb7b5e/8
3177898416165319384258918140288820276451610121276651584529183931460973756417

Or, yanno... If you're not insane you can just right click and Save As.

Hell. I dunno NFT law. It's probably insane. I could probably get sued for posting this image here, so I'll just hype it up. You should DEFINITELY buy this for $241.99.

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Vaccinated People: "You need to get muh vaccination shots that don't work because I got muh vaccination shots that don't work and I'm afraid of people that didn't get muh vaccination shots that don't work because muh vaccination shots that don't work don't work."

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Originally posted by JAYNEZTOWN:
Is central bank digital currency dangerous?

https://rumble.com/v17ih0e-is-central-bank-digital-currency-dangerous.
html

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Originally posted by SIGNYM:
Most banks that deal in unbacked currency... not backed by production of either commodities or manufactured goods or even a store of gold/silver/platinum or oil ... or even ACTUAL FIAT...are exactly like FTX. It's the same problem: near-unlimited issuance with no backing. Bank reserve requirements are too low, and credit extended for futures speculation is unlimited.

Thanks, Bill Clinton.

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Originally posted by JAYNEZTOWN:
Sam Bankman Fried too Big to Fail
Can Not be put in Jail?

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