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Digital Dollar Inevitability, And Why It Will Be Here Sooner Than You Think – What It Means For Bitcoin

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Digital Dollar

What to expect in this article?

      Ingenious setup put in place by the government to introduce digital dollar

      Two parts strategy to introduce digital dollar you should know

      Why introducing the digital dollar will be essential to keep the economy going?

      Why will this be a good thing for Bitcoin and few cryptocurrencies?

Nerds dream and capitalists reap. There is no bigger cluster of capitalists than in the US.  

Blockchain and digital currency are one of the wettest dreams of the nerds and now the capitalists from the Capitol itself are going to reap the benefits of that dream.  This is how the dream of anarchists is going to, yet again, hand the reins to capitalists.

Zero interest rates – ingenious set up to introduce digital dollar

Zero Percent Interest ratesZero interest rates are the first step to a digital currency set up. 

How? You may think.  

It’s quite ingenious really: when you cannot lower the interest rates below zero – you make keeping (saving/hoarding) cash in the bank account burdensome and make it impossible to hide the money.  When people are penalized/charged for keeping money in a bank account and when they cannot hide it – they end up spending it. 

Spending stimulates the economy.  Stimulus checks stimulate the economy for a little while but a whole country going on a spending spree because it is expensive to ‘keep’ money will stimulate the economy to new peaks.

Executing this digital dollar stimulation is a two parts strategy – pay attention.

Part one: In general, when banks start charging fees to keep our money in the account – we’ll take it out of the bank and shove the money in a mattress or buy precious metals and then shove them somewhere. 

Here comes part two that involves making the money impossible to hide by making it digitally traceable so that its every move is traced, tracked, tagged and taxed. 

Premise for the Execution: Health is the new patriotism

The US Congress has already tinkered with the idea of the digital dollar in the first draft of the stimulus bill, however, they dropped the idea on the final version.  So we know that it is in the works.

To introduce a nationwide digital currency mandate – the government may use health as the primary reason.

Health will be to Digital Dollar what patriotism was to the patriot act. 

health moneyHere is how it might be presented: Physical money is spreading the COVID-19 (or some other) virus and we need to shut down the entire paper money from circulation ‘to protect our people’.

You might think that such a thing would never happen.  Government may never shutdown paper money.  

Think again. 

India had demonetized their 500 and 1000 denominations overnight in 2016. Many people who were ready to make deals the next day using their big bills were left with color paper which became useless overnight.

And, India is primarily a cash economy.  

Cash to GDP in India is 11% vs. 7% in the US.  More and more people in the US are going cashless. Even those who carry cash only carry a small amount in their wallets and what exists in their banks is in ‘digital form’ anyway.

Adding a health stigma to the already dying paper money will make it easy to ‘put it to sleep’.

Conditions are ripe for a total take down of ‘hard-cold-paper’ money.

Execution

Execution will happen in phases.  We speculate that taking entire economy cashless will involve:

PHASE ONE: Limit on withdrawals: whenever the date to go digital is declared we anticipate a limit on withdrawals from banks.  There will be no point of going digital if everyone simply takes the money from the bank. To curb this issue, there may be limits imposed on how much money you can take out in a day or week or a month.

PHASE TWO: demonetize the bills:  Those who thought they could take their money from the banks and stash them in their mattress will be forced to bring those bills back to the bank when the bills are declared ‘illegal tender’.  If a country like India where a major part of the economy runs on cash can void its currency overnight then a country like the US can definitely do it.

PHASE THREE: window to exchange your paper money with digital dollar Once the bills are declared useless – people will be given the opportunity to deposit their ‘bills’ back into the banking system. Only this time, bills so deposited back will be destroyed and converted to digital dollars. During this window, governments across the world will be able to surrender their US Dollar bills to local US embassies (or other representative agencies/banks) in exchange for digital dollars.

PHASE FOUR: taking care of the elderly:  Those who are at a certain age and protest this move from paper money to digital currency will be given few choices in our view.  One, senior citizens may be exempt from the digital currency mandate. Or, two, they may be special digital dollar cards (similar to debit cards but loaded with digital dollars) that will be loaded with the spare change every time the elderly transacts at a store, thus facilitating a slow conversion of their paper money to digital form.

PHASE FIVE: All systems go: even with 80% of the paper bills in circulation converted to digital dollars – all systems will have been put in place to move forward.  At this point, every single digital dollar will be easy to trace, track, tag and tax, in real time

The US Dollar is already digital, how is digital dollar different?

US dollar digitalIt is true that most of the US dollars in existence today exist as a mere digital number in the financial system.  However, people can withdraw the money in paper bills. Once money goes into circulation as paper currency – it is almost entirely impossible to track its movement. 

Almost all illegal activities take place only in paper cash.

When there is ‘no choice’ of paper currency and when every digital dollar in existence is traced through immutable technology (like blockchain) then those who exploited the system will find it difficult to circumvent it.  If we can stop the spread of diseases in the process, well, that’s a bonus. 

We also anticipate that the new digital dollar will have following features:

Technology backed (blockchain or similar DLT based tamper proof technology)

Portable to transact directly over private messengers (like WhatsApp/Facebook/etc.,)

Digital dollar will be platform agnostic, that is, it will be seamless to track its movement over multiple platforms.  For example, movement from bank to a messenger and then to a foreign bank, etc.,

Every wallet that holds the digital dollar will add to the network strength making it almost impossible to hack with any amount of money

Advantages of digital dollar

in favor of bitcoinHere is a short list of benefits from introducing a digital dollar that can be traced, tracked, tagged and taxed in real time:

 Avoid circulation of germs and viruses through contact of paper bills

 Transaction level tax system to impose and collect taxes in real time

 Curb the illegal activities that heavily rely on paper cash

 Curb money laundering and tax evasion

 Seize accounts of perpetrators in real time

Disadvantages of digital dollar

against bitcoinNot everything is rosy about the digital dollar.  There are some pitfalls:

Undue power vested in the government, what happens when few bad players in the government take advantage of the system?

When every dollar can be traced, tracked, tagged and taxed in real time – what happens with the data collected on citizens of the country?  Who will guarantee that data will not be used to manipulate people

In a capitalist society, can we really trust private institutions (like banks) to play by the rules?

People will lose alternatives

Why is it good for bitcoin?

bitcoin-gift cardsOnce the digital dollar is created and mandated, the government may be able to monitor spending habits of its citizens. Whether the banks and private agencies will get hands on these spending behaviors, and if so, how will that be used will not be known until some scam makes the headlines.

Those who care for their privacy (and are not committing criminal activities) will want alternatives.  

Obviously, precious metals cannot be used for daily transactions but you can use bitcoin and cryptocurrencies for daily transactions. The ability to use bitcoin and cryptocurrencies to transact will actually work in bitcoin and crypto’s favor when digital dollar is rolled out.

Advantages of bitcoin (and other cryptocurrencies) over digital dollar

in favor of bitcoin  You do not need a bank or third party to hold your own bitcoin

 It cannot be seized by governments or banks

 You can participate in transactions without someone mining your data

 Helps secure privacy

Disadvantages of bitcoin (and other cryptocurrencies) compared to digital dollar

against bitcoin Bitcoin does not have a lot of history backing it

While most cryptocurrencies (including bitcoin) can be tracked, some private cryptocurrencies are almost impossible to track and criminals may turn to these alternatives. This in turn will make the case against crypto stronger

Less than 1% of global population actually uses bitcoin (or other crypto) and that means number of places where it will be accepted will be limited

Will the government create its own digital dollar?

We expect that the government will develop a private blockchain based system that is not open to the public.  A collaboration between IBM (Hyperledger), Federal Reserve and major banks will likely be in the cards for this rollout.

We do not anticipate the government to tie up with Facebook’s Libra project.  If they do – well – it’s shameful and blatant disregard to public interest.

We can see Coinbase playing some role.

Can Coinbase stand to gain with digital dollars?

There is an off chance that USDC from Coinbase will stand to gain traction acting as the bridge between crypto space and the digital dollar.

Coinbase has all the right infrastructure, connections and good reputation to form the alliance.

Will digital dollar be the end of crypto as we know it?

We think that the cryptocurrencies whose only value proposition is ‘transfer of value’ will probably bite the dust since people will rather trust a government backed digital dollar than a private cryptocurrency.

Bitcoin should hold its own.

Projects that develop a great utility on their platform might keep their crypto standing intact.

Government issuing digital dollars based on blockchain (or DLT) will be a great stamp of approval to the legitimacy of the technology and should help boost the space. Digital dollar will make many crypto projects obsolete. Those that stand on their own will thrive.

best Crypto Tax Software

Thank you for reading and sharing this article. Stay safe and healthy!

IMPORTANT DISCLAIMER

We have used referral codes where available.

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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All Roads Lead to $100K Bitcoin: Various Perspectives that Support $100K BTC

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Bitcoin to 100K

Bitcoin to 100K

There are a lot of theories in the crypto space that argue that Bitcoin will reach $100,000 before the next halving.  Some even argue that we could reach that price point before the end of 2021.

Here we have compiled a few perspectives that support a higher price point for Bitcoin.

IF we missed any, please let us know and we will be glad to add it for others to read.

Bitcoin’s ability to reward savers

If you saved $100,000 throughout 2017, today its value would have been $94,000, a total loss of 6% due to inflation. That is without considering the fees and hidden charges that institutes charge.

Even if you invested in the S&P 500 for 12 months at $8333 each month throughout 2017, your portfolio value today would have been $110,000.

If you saved $100,000 in Bitcoin throughout the 2017 (prices ranged from $920 through $14,000 during Jan 2017 through December 2017).  For the purposes of this comparison we are using the last week prices from each month as available on Coinmarketcap historical snapshots.

$100,000 invested in equal amounts throughout 2017 would look something like this.

Bitcoin to 100K

Since 2017, Bitcoin price has crashed and rebounded.  At the lowest point of the crash of $3000 per bitcoin, your portfolio value would have been $144,000.

In today’s average price of $16000 per bitcoin, your $100,000 savings would have been worth $770,000.

Due to its increasing demand and reducing supply, Bitcoin is expected to reach $100,000 in the next 4 years. Some models show that bitcoin will be worth $1 Million by 2030.

Only time will tell us whether bitcoin reaches these prices or not, but point being, no other asset of any class has crazy growth predictions like Bitcoin has.

Stock-to-flow ratio

According to Plan B, Gold had the highest stock-to-flow (SF) ratio of 62.  That is, it will take 62 years to produce the gold that is currently in the market.  In other words, you cannot willy-nilly inflate the supply in a year or two due to how scarce gold is and how difficult it is to find and mine it.

Current SF for Bitcoin is 25, however, by the end of 2020 or 2021, this could jump to 50.  By the next halving in 2024, Bitcoin could surpass the SF of gold.

According to Plan B, “The predicted market value for bitcoin after May 2020 halving is $1trn, which translates in a bitcoin price of $55,000. That is quite spectacular. I guess time will tell and we will probably know one or two years after the halving, in 2020 or 2021. A great out of sample test of this hypothesis and model.”

However, following the trajectory of Plan B’s SF analysis, Bitcoin could easily reach $1 Million dollars by 2030, according to some commenters.

Stimulus and unlimited printing of fiat

COVID has exposed another flaw in the fiat system.  It is that governments can print as much money as they wish whenever they wish to do so.

Whenever governments resort to simply print money without having a basis in asset value or growth in GDP, it erodes the value of the fiat in circulation.

This is what happened to Argentina, Venezuela, Zimbabwe and more.  

The US dollar has lost over 99.97% value since 1900.  For instance, whatever you could buy with $1 in 1900 will need $31 today.

COVID has added salt to the wound for fiat.  It exposed the blatant fact that governments can and will print money to their whim without regard to the inflation and impact on savers.

This increased supply in fiat helps stock market and market liquidity which in itself helps people who are invested in the stock market and other vehicles which is generally the wealthier part of the society.

Other factors strengthening the crazy Bitcoin price predictions

  • Institutional FOMO, for instance, Square, PayPal, Grayscale, etc., entering the market
  • Easier onboarding of new retail investors
  • Greater technologies and DApps being built on Bitcoin 
  • Great DeFi services to lend and borrow money
  • Globally accepted single denomination that does not need to be converted in the future (with enough places accepting bitcoin)

What other factors do you think will contribute to Bitcoin’s shooting past the $100,000 barrier?

Let the FOMO begin…

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

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Crypto Roundup: All Your YouTube Influencers in One Place

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Crypto Roundup

Visit our Crypto Roundup section daily for a dose of all your favorite Crypto YouTube influencers in one place.    

Worried about missing updates from your favorite YouTube crypto influencers?  

Welcome to the Crypto Roundup.  

On this page, we will post a quick summary of the videos from some of the most popular YouTube crypto influencers.

Ivan on Tech  Altcoin Daily

Crypto Zombie Box Mining

Ellio Trades Lark Davis

Data Dash Bitboy Crypto

MMCrypto Chico Crypto

Altcoin Daily

Video title: Bitcoin Will Be OVER $20,000 By Christmas 2020! BIGGEST WEALTH SHIFT OF OUR LIFETIME! Cryptocurrency

Date: 19-Nov-20

  • World’s biggest wealth shift of our lifetime is happening right now and no mainstream media is talking about it, except CNBC.

  • Preston Pysh predicted on August 26th that: “Bitcoin should be reaching its all time high by Christmas.”

  • If you are looking to buy a dip, there may not be one.
  • Ricardo Salinas Pliego, a mexican billionaire, has just revealed that 10% of his liquid assets are into bitcoin.

Lark Davis

Video Title: STOCKS HIT NEW HIGHS! WILL COVID VACCINES LEAD TO MEGA PUMP IN 2021? [Are You Ready?]

Date: 19-Nov-2020

  • Stock markets and bitcoin pumps higher on the news of the second successful covid vaccine.
  • There could be more chances for the new stimulus. Means more inflation, more debt and simultaneously pumps stocks, gold and bitcoin.

Crypto Zombie

Video Title: BITCOIN $18.5k TOP!!?! DON’T BE FOOLED!! HODL FOMO BEGINS!!! $TRILLIONS FLOOD!!

Date: 18-Nov-2020

  • Overall sentiment of Bitcoin has changed drastically from ICO craze in 2017 to a time where people are FOMOing to own more bitcoin.

Ivan on tech 

Video Title: BIG WARNING TO ALL HODLERS!!!!!!!!! DO NOT GET REKT!!! BITCOIN $18,500 REJECTED – NOW WHAT?

Date: 18-Nov-2020

  • Ivan expects bitcoin to shoot past $20K resistance before end of this year, giving it 85% probability

Chico Crypto

Video Title: World’s Most Powerful Turn BULLISH on BITCOIN

Date: 19-Nov-2020

  • All those who hold big bags of Bitcoin will come out of the shadows to talk up the Bitcoin rally, a $20K bitcoin could be on the cards before the end of this year
  • Ethereum mining could act as a big catalyst for Ethereum’s price
  • Big companies like google could play a bigger role in mass adoption of crypto

Let the FOMO begin…

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Lessons from the Veteran HODLERS to the Newbies!

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Lessons in Crypto

For all those who entered the crypto market after the 2017 bull run – here are few lessons from the HODLERS from the last bull run(s).

This is our attempt at making all you newbies aware of the mistakes veteran cryptoers did.

Let’s get started…

Don’t FOMO in to all the hype

FomoIt’s hard not to FOMO in crypto.  The trick is to make sure you don’t lose your shirt in crazy bets.  Always limit your bets to what you are comfortable losing.

The common ways you can become victim of FOMO are:

  • Following your favorite YouTuber without actually doing your own research on the project.
  • Investing into projects at the top.
  • Believing in promises of 100x or 1000x without any substance behind those claims.

HODLing far too long

Remember why you are into crypto – to make the money.

Never fall in love with your crypto, and HODL the tokens even when they are 10x and more.

Have a strategy to take your capital out before you become a HODLer.  

If you believe the project really has what it takes to go beyond 100x and more, just sell in instalments so as to not miss the ride.

One of the best ways to HODL is to take your capital in full and profit in tranches.

This rekt story will give you a right perspective of what it looks like, it’s one of many:

Don’t put all your eggs in one basket

Never go all in on one project. No matter how strong the project may look, even the projects with strong fundamentals don’t do well sometimes. 

And, you will be kicking yourself watching other projects go up and your portfolio just doesn’t seem to make a move.

And don’t over do it and have a portfolio with over 100 projects either. It is very difficult not to have invested in more than 15 projects but anything less than 20 is a good way to go, in our opinion. 

Put aside the share of Profits for Taxes.

One way you can get a good night’s sleep is by paying taxes. 

Always keep a habit of putting aside a % of your profits in USDT or other stable coins, as a reserve to take advantage of market volatility and also to meet your tax obligations. 

Exchanges are more evil during bull run

Foreign ExchangesDon’t trust exchanges. Yes we already know that, but they play more games during bullrun, some intentional and some technical. 

Many exchanges tend to go under maintenance when the prices shoot up too high too soon (Coinbase?), and you can’t sell. 

And the shady exchanges scam out before you know.

Regulators seem interested when the market cap of these projects goes through the roof, which then adds FUD around the project crashing the prices.  

Exchange may freeze funds pending investigations when such issues arise.

Take for example OKEx. Users are unable to withdraw their assets from the exchange for almost a month now, not certain if they ever will, and all that started with the legal dispute.

Never fall for Arbitrage gains

Arbitrage is when you buy in one exchange at a lower rate and sell on the other for a higher rate to take some profits. 

Some shady exchanges show a lot higher prices than the other genuine exchanges and when you deposit your assets to sell at those prices there won’t be actual volume to execute the trade. You may be stuck with either a high fee for withdrawal or other funky rules to take your own money out. 

Remember, there is no free Giveaway

Free CryptoScammers rise with the rising market.  

When the crypto market buzzes with all time highs – scammers cash in big time on newbies.

The most lucrative scam in crypto is ‘Free Giveaway’. Whether it be through YouYube ads or discussion groups and wherever they can get your attention.  Read this article on various sophisticated scams that are being deployed.

We hope these lessons help you through your trades and crypto life.  Stay safe and always DYOR.

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

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