The invention of Bitcoin has changed money forever and forced central banks to respond with their own iteration of cryptocurrency.
Worldwide, central banks are preparing to launch central bank digital currencies (CBDCs) as another second-layer monetary instrument originating from their balance sheets on par with reserves and paper currency.
It's uncertain how CBDCs will be constructed, how similar or different their technology will be to Bitcoin's, or the impact they'll have.
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"Bitcoin-backed banks will solve these problems. They can work like banks did before nationalization of currency. Different banks can have different policies, some more aggressive, some more conservative. Some would be fractional reserve while others may be 100% Bitcoi...
Gold & Silver Coins were a huge implementation for humanity growth & evolution. Unfortunately they had some cons:
"Today, our financial system is broken. It works, but the fractures within make it prone to ruptures. It almost collapsed in 2008 and again in 2020. The Federal Reserve has done its job as lender of last resort in each circumstance and kept the financial system alive, ...
With the emerging layered money the arise of centralized entities was a matter of time.
The first to appear and take control of the monetary system were the Bank of Amsterdam and the Bank of England.
Both entities gave unprede...
"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and...
"Actually there is a very good reason for Bitcoin-backed banks to exist, issuing their own digital cash currency, reedemable for bitcoins. Bitcoin itself cannot scale to have every single financial transaction in the world be broadcast to everyone and inlcuded in the b...
"The steady addition of a constant amount of new coins is analogous to gold miners expending resources to add goldto circulation."
The Bank of England was created in 1694 with the purpose to purchase new government bonds in an effort to rebuild the country after a crushing defeat of the English navy.
It was tasked with taking custody of precious metal,...
In 1971, the United States suspended gold convertability for the dollar; the suspension was supposed to be temporary, but the dollar never returned to any linkage with the commodity.
Two years later, the modern era of free-floating currencies
The Bitcoin blockchain most fundamentally describes a record of transactions simultaneously kept by all peers in the network. Blockchain can be understood as a Distributed & Public Ledger.
Bitcoin mining is the process of verifying new transactions to the B...
Bitcoin originated back in 2008, forty-six days after the fall of Lehman Brothers. Its whitepaper was sent to a very small online community called the Cryptography Maling List.
The paper was written by Satoshi Nakamoto. The...
It is a completely revolutionary form of money which is characterized by being:
"Gold is money. Everything else is credit."
"A puely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial instituton."
"Always and everywhere, monetary systems are hierarchical."
First of all we need to see the difference between first layer & second layer money:
It was created back in 1609 and thanks to the world's first joint-stock company, the Dutch East India Company (Vereenigde Oostindische Compagnie, or VOC).
The VOC was the first example of equity investors providing capital ...
Shortly after an earthquake in 1906 rocked San Francisco, the US immersed into a financial crisis.
Congress passed into law the Federal Reserve System on Decemeber 23, 1913.
The Fed was founded to combat financial crises, and it would...
Franklin Roosevelt issued Executive Order 6102 on April 5, 1933 which instructed all "gold coin, gold bullion, and certificates to be delivered to the government."
The order was effectively a forced sale of gold in exchange for Fed notes (c...
The Federal Reserve Act's stated the following purposes:
BTC is digital gold. It's a form of money. People trust BTC because they believe it to be rare and valuable. It has a price in hundreds of different currencies. It doesn't origin...
Initialy, gold and silver coins were issued as a first-layer form of money. Which means that coins where backed by its own value depending of the purity of gold/silver contained.
First records of coins usage trace back to a...
Let's see different forms of money used historicaly:
GOLD & SILVER appeared.
Prior to the existance of Layered Money there was simply money.
Money is a tool which allows peers the exchange of goods within a consensus value.
In 1944, world leaders gathered at a hotel in Bretton Woods, New Hampshire and formalized that all currencies besides the dollar were forms of third-layer money within the dollar pyramid.
Federal Reserve notes still promised the be...
Business Administration and Management Student | Blockchain, DEFI & Web3 | Social Worker | "Fix the money & fix the world."
Understand money history and the layers that conform our monetary system, as well as the revolutionary form of money Bitcoin.
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