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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.

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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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5 questions we want XRP army to answer!

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xrp investing news

What follows is our opinion.  

Let’s not be hostile.  

Top 5 Cryptocurrencies 2020

We are simply posing some questions based on the information we came across and our own limited interpretation. 

It is quite possible that the sources we are referring to are at fault or our interpretation is. Either way, just answer these questions for us so that we can learn new things about XRP that we did not know.

Our readers know that we have been anti-XRP for a long time. We got trolled, mocked and called ignorant. Well, to each their own.

Our questions to the entire XRP army are simple, here they are:

Question 1: If crypto was to replace (or at least reshape) the entire banking business then what does a token whose sole business model is based on ‘accommodating’ banks have any future?

To put differently, when the world starts conducting commerce via text messages why do we need banks and Ripple which wants to serve banks?

Our basis for this question: 

In the future when we will start doing business with each other over text messages, wallets and email signatures, why do we need a payment gateway from Ripple?

We know that WeChat payment enables users to transact over chat.  Other companies are trying to catch up with this (primarily why Facebook was looking at creating its own currency, Libra).

However, once we have a digital dollar, we do not even need an outside stablecoin since one could, in theory, use the digital dollar directly.                  

Question 2: Why do you have to pay businesses to use XRP if it is so superior?

Our basis for this question: 

Financial Times reported that Ripple paid Moneygram to use Ripple technology.

Here is a direct quote:

It turns out Ripple has been paying a significant amount of subsidies cash to MoneyGram’s business since buying into the company in June. In the third and fourth quarter alone the Ripple benefits amounted to $11.3m.

What’s more, until a consultation with the SEC**, MoneyGram had been more than happy to book these cash flows as revenues. Due to the SEC guidance, however, it has now had to restate fourth-quarter guidance to account for Ripple payments as “contra expenses”.

XRP Twitter

Question 3: What is Ripple’s revenue worth without the ‘selling’ XRP?

Our basis for this question: 

The question seems to be answered by the XRP’s CEO himself. Here is an excerpt:

Asked if XRP was keeping everything cash flow positive at Ripple Labs, Mr Garlinghouse answered: “Well XRP is one source. I don’t know how to answer that because if you took away our software revenues, that would make us less profitable. If you took away all our XRP, that makes us less profitable. So I don’t think about it as one thing.” 

He clarified later: “We would not be profitable or cash flow positive [without selling XRP], I think I’ve said that. We have now.”

In our opinion, we think that the only reason Ripple (XRP) is even operational is because of the billions upon billions of XRP tokens that they keep dumping on the unassuming investors.  

Is this a wrong assumption?

Question 4: If Ripple does not need XRP, why is XRP needed?

Our basis for this question: 

This is based on our understanding that Ripple’s technology can be used by the businesses without having to use XRP.  It is recommended but not ‘required’.

Is this accurate?

Ripple’s solutions can work without XRP (its native token).  So, if XRP is not a utility token in strict sense, how are its creators able to mint and sell them at will without tripping any security laws?

Question 5: If Ripple [XRP] is to act as the ‘stable’ value while the transactions take place on Ripple network, why should anyone trust XRP which is backed by nothing instead of stablecoins like USDC that are backed by real world assets?

Our basis for this question: 

We would personally trust USDC more or even Facebook’s Libra rather than XRP which is backed by nada.

This is what Demelza’s opinion was during our interview:

“The main point is that if XRP were able to back their currency with financial assets and stabilize the purchasing power of the currency, then that would mean XRP coins should have no price appreciation. In fact, only the equity shares of Ripple Labs would profit from XRP’s adoption as a global reserve currency. But Ripple Labs is a privately held company. After fully understanding what XRP is, one realizes that XRP’s investment pitch does not make sense at all.”

Conclusion

We are trying to convince ourselves as to why we need Ripple in the crypto space if:

  • Future of payments is going to be ‘self-bank’ & over the chat
  • There are better stablecoins in the market 
  • Ripple itself as a technology doesn’t need its own native token, XRP

For this very reason, our opinion is that the money will flow out of XRP and the creators will keep dumping their bags into the market until the market can no longer absorb it and then it will be ‘lights out’.

We await for the XRP army to provide us insights that we did not know and our opinion changes…

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

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

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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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DeFi is Not the Holy Grail of Crypto, Here is Why

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Defi Yfi

DeFi has been making millionaires overnight and turning millionaires broke at the same speed.

Those who are on the bandwagon are rejoicing and those who either missed out or got burned by one of the fake projects are yelling ‘Scam’ at DeFi.

Top 5 Cryptocurrencies 2020

Our views are a bit different on the subject.

We do think DeFi is going to be a successful vertical among the blockchain (and crypto) solutions.

It will not be THE holy grail for the redemption of crypto status though.

Supply Chain, Crypto Lending, Insurance, Financial Services, Accounting, Identity, and many more verticals will collectively take blockchain and crypto to the masses.

Shifting our focus back on DeFi, here are some of our thoughts on the current state of DeFi. We do appreciate you dropping any insights you have that we might have missed.

DeFi is not a ponzi, here is why

If the DeFi project you are eyeing meets the following conditions, it is not a ponzi:

  • Audited code: Is the code on which DeFi runs is audited by reputable blockchain auditors? 
  • Reliable team: Who is behind the project? Do they have the know-how? Do they have a history of running scams or leading successful projects? 
  • Actual (sustainable) revenue model: What is the revenue model?  Is it too ‘scammy’ sounding or is it based on sound mathematical (and algorithmic) models?
  • No lock-in periods: Is it easy to get in and out of the platform without any restrictions or lock-in periods?

If you answered yes to ALL of these questions then there is a 100% certainty that the DeFi you are dealing with is not a ponzi (or scam).

However, a caveat is due here.  

Just because the project is not a ponzi doesn’t guarantee its success. Lot of well intentioned companies fail, that’s just the nature of business.

So, do not be one of those guys who sells their home to invest in crypto or DeFi (and that itself is not advice, just an opinion).

If you don’t want to hear it from us, listen to what Yearn Finance creator has to say about DeFi tokens (not all, obviously) having ZERO value.

Source: Crypto Culture

DeFi on Ethereum is not sustainable, here is why

Ethereum DefiMost, if not all, DeFi projects that are making the news today are on Ethereum. 

Ethereum is not a reliable blockchain when it is overloaded.  It gets choked and crashes.  

People are already complaining about exorbitant fees on the network due to the DeFi craze.  

DeFi itself as a crypto vertical is quite new and we are sure there are going to be a lot of ‘killer apps’ that will show up on the scene.

We are currently looking at the DeFi solutions that are being built on other blockchain networks (subscribe for free to know when we post that article).

PolkaDOT is not the end all be all, here is why

Polkadot Defi EcosystemMany are turning to the DOT as the next big thing after Ethereum.

It may very well be.

However, it has not had the chance to prove itself, not yet.

Ethereum’s resilience (or lack thereof) was revealed only during the ICO craze (and then later during CryptoKitties debacle).

What monsters lie in the DOT’s belly?  We don’t know and we would be weary of anyone who claims to know with certainty.

Other things to consider

Entire DeFi space is pretty new and we do not know what we do not know about potential vulnerabilities.

While this is true of Bitcoin itself, Bitcoin has withstood assault for over a decade and still stands stronger.  

Same cannot be said about DeFi.  

Can you imagine someone investing their life-savings into DeFi only to have funds taken because of a bug in the code?

Needless to say, many folks are exploiting the looping system in the DeFi where they take loan against their deposit then lend it back to the platform to take another loan against their deposit, and ad infinitum.

This is causing the DeFi systems to show more liquidity than what truly is.

Conclusion

We think DeFi is an exciting development, however, we still put it alongside ICO craziness for now.

When this space matures and we see reliable solutions emerge – DeFi has the potential to drive a trillion dollar vertical on its own.  

That is just the potential, all the trials and tribulations that we have to go through to get there is going to be one hell of a ride.  

So buckle up and enjoy (and please do not lose your shirts on the ride)!

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

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

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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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These forgotten gems could resurge during this bull run

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Forgotten Crypto Gems

Forgotten Crypto Gems

Disclaimer:  We own few of these tokens and there is no guarantee that these coins will actually resurge. Everything you are about to read is an opinion.  Our intention is to put some projects that have taken the backseat in recent times.

If you are curious as to why we give away so much for free – please check this Crypto Freebies page.

Top 5 Cryptocurrencies 2020

Crypto market is quite weird.  

It deceives the onlooker as if it’s learning from its past mistakes but it’s really not.

For instance, during the 2017 ICO craze, anyone could pitch any half-assed idea and raise millions from unassuming investors.

This bull run in 2020 is all about DeFi and Data Oracles.

Just slap ‘DeFi’ to any project without an actual product or even a single line of code written and you will make a boatload of money.

Because the ‘pump and dump’ practices are not closely monitored in the crypto space, many YouTubers are dumping their bags on their viewers.

It is so blatant that the YouTuber will start out saying “I loaded my bags with this” and then go on about all the mooning stuff and throw in a small disclaimer somewhere and voila. 

They make hundreds of thousands or even millions each day. And we are not exaggerating about that.

You contrast that with what you find here.  

We are giving away all the information we are digging up for free (including our Top 5 tokens for the next decade that we hope will 100x).  If you are curious as to why we give away so much for free – please check this Crypto Freebies page.

We recently started the microcap gems series where we are looking to dig up projects with a decent team, an actual product and lower market cap (usually under $5 Million, sometimes even less).

Because of the $$ limit on the microcap gems, there are some projects that we couldn’t cover in that series.

However, we wanted to float these projects in front of the discernible audience (and newbies who may not have looked into these).

This article’s sole aim is to ‘point’ you to these projects. It will not be a deep dive and as always we encourage you DYOR before investing.

Dragon Chain

Dragon Chain price prediction“Dragonchain is an enterprise and start up ready platform to build flexible and scalable blockchain applications.”

Like most projects we pick, Dragon Chain has solutions ready for business today.  This is not a pipedream or a 15 year roadmap.  That is why we think this is a forgotten gem.

This project is still going strong in the background in terms of development and traction.  They released a video in August about how their anti-fraud and transparency proof systems are used by an exchange.

Website: https://dragonchain.com/

Ticker: DRGN

ATH: $5.27

ATL: .02

Current Price: $0.079

Cindicator

Cindicator CND price prediction

“Cindicator builds predictive analytics by merging collective intelligence and machine learning models. Cindicator’s analytical products are available exclusively to holders of CND tokens.”

Market pays top dollar for prediction data.  Cindicator is one of the first projects to build an AI based market intelligence platform on blockchain.

Cindicator boasts over 135,000 analysts from over 135 countries.

In our opinion, Cindicator is a viable project, although it has not gained traction.

Website: https://cindicator.com/

Ticker: CND

ATH: $0.347

ATL: $0.002

Current price: $0.011

FunFair

Funfair Price Prediction

“FunFair is a revolutionary blockchain technology platform that provides low cost, high quality, transparent casino experiences that are Guaranteed Fair.”

The space that FunFair is targeting is a massive one and is expected to grown even more in the coming years.

Ticker: FUN

ATH: $0.33

ATL: $0.0010

Current price: $0.0052

This page will be updated with future ‘forgotten gems’, so please consider subscribing

Acronyms used: 

ATH: All Time High

ATL: All Time Low

DYOR: Do Your Own Research

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

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

best Crypto Tax Software

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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