Why the Fedcoin will be bullish for Bitcoin

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Mark Leavy
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Re: Why the Fedcoin will be bullish for Bitcoin

Post by Mark Leavy » Fri Jul 02, 2021 9:56 pm

Honest question.

When I think of a crypto currency that is pegged to a fiat currency, my first question is why? How is this better than folding money? What is the value proposition?

Off the top of my head I have:
1) It comes in denominations greater than $100 bills.
2) It is easier to transport.
3) Anonymous(?) transactions without physical presence.

The biggest downsides of course are the frictions in holding and transacting, risk of the peg being removed, and the risks of state attacks.

After a long and cynical life, I'm extremely wary of any 'pegged' currencies. They have a tendency to rapidly devalue in seconds when the peg is removed.
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Re: Why the Fedcoin will be bullish for Bitcoin

Post by Mark Leavy » Fri Jul 02, 2021 10:20 pm

vincent_c wrote:
Fri Jul 02, 2021 9:46 pm
I’ve been trying to solve the problem of a stablecoin and it made me realize that the only way to have a stablecoin is to have the Fed first issue a Fedcoin and then to have blockchain decentralized custodians to wrap Fedcoins to become a fully backed trustless stablecoin.

I think if this were to happen this would be a gamechanger for bitcoin and decentralized finance. Such a thing might not be allowed by the government but I wonder if they could really stop it. Any thoughts?
To get back on to your topic...

I imagine that if some sort of stable coin is inevitable then the smartest policy for the feds would be to adopt the Microsoft strategy of Embrace Extend Extinguish. That seems a fairly straightforward and predictable outcome.
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Re: Why the Fedcoin will be bullish for Bitcoin

Post by bitcoininthevp » Wed Aug 25, 2021 9:36 am

What is the problem of stablecoins that you are trying to solve?

Fedcoin (CBDC buzzword) is not going to be anything like a cryptocurrency in that the Fed will want complete control (allow certain transactions, block others, etc).

Current stablecoins (USDC, USDT) that are backed will probably be regulated to comply with something like SWIFT/wire transfers, etc, rendering them largely useless.

Algorithmic stablecoins are still a bit of a question mark but early iterations on this idea have resulted in the "peg" to USD to vary wildly.

Side note, IMHO, none of these pose a risk to bitcoin as they are solving totally different problems. Stablecoins solving transacting, bitcoin solving store of value and censorship resistance.
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Re: Why the Fedcoin will be bullish for Bitcoin

Post by bitcoininthevp » Wed Aug 25, 2021 10:07 am

CBDCs seem inevitable to me. CBDCs also seem to me one of the biggest threats to humanity that I can imagine.

Government controlling your tax rate based on political ties. Your money expires. Limits to how much you can spend on meat in a month. Cant send funds to that guy that said something bad about the president. Freeze money of political opponents. They take money from white people only to pay reparations. Per hour taxing. You’re fat or didn’t get the jab?, daily fines until you comply with recommendations. The list could go on forever and is a nightmare.

Act accordingly.
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Re: Why the Fedcoin will be bullish for Bitcoin

Post by bitcoininthevp » Wed Aug 25, 2021 10:40 am

vincent_c wrote:
Wed Aug 25, 2021 10:20 am
I've seen some policies that in theory should have been a nightmare for people but it seems many/most people just get used to it and it becomes the new normal.
Complete governmental control of your life seems hard to not be a nightmare. And complete control of the money gives them that.

Maybe at first its tolerable, just fining those evil folks that refuse the vaccine.
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