discuss Will you accept Central Bank Digital Currency? (CBDC)

[DanSanchez]

The rumors are correct, governments and central banks around the world are preparing a monetary shift equating to a "New Brettonwoods." There is the Digital Yuan, which is already in circulation and has over 10 million users, Digital Euro, which the ECB announced would be required for the Euro Zone, and the last one being FedCoin, the latest of the bunch with the most obscurity.

Here is the President of the Bank for International Settlements, talking about "having complete control" over the money.

https://mobile.twitter.com/Leve_raged/status/1412928948586127362

Likely a measure to "slow" the coming tsunami of monetary inflation into the real economy. The impact on retail banks, existing debt, and the current denomination of labor/value is unknown, but I think it's important we truly identify some pain points before we land as an industry.

My question to you is, will you accept CBDCs for your domains?

If yes or no, I'm interested to know your perspectives.

 

[Future Sensors]

Total control is the ultimate goal of the central banks.

I thought this was in response to Facebook who wanted to create their own currency and do the same.

 

[DN Playbook]

I will accept gold or silver bullion in addition to USD.

Currency is already digital. The only time I see a physical bill is when I go to the ATM.

Still trying to figure out this crypto stuff. How do you pay for groceries with it?

At this time USD is very strong against other currencies. Can't see it go away in our lifetimes.

 

[wot]

I would accept anything tradeable that would help me sell a name.

 

[bmugford]

I don't really understand how fiat digital currencies are much different than what we have now with banks.

If you buy something for $2,500 it is not like you normally pay in cash now. You use a CC or Debit card tied to fiat currency. That number is just a digital amount in a virtual account. The balance goes down.

I am not really sold on crypto, certainly not endless shitcoins, but I don't really see what problem this solves either.

Brad

 

[bmugford]

Still trying to figure out this crypto stuff. How do you pay for groceries with it?

You don't. Grocery stores have tiny profit margins of around 1% - 3%.

It would make no sense to take something that has wild swings in payment when your profit margin is so low to start with.

Brad

 

[DN Playbook]

You don't. Grocery stores have tiny profit margins of around 1% - 3%.

It would make no sense to take something that has wild swings in payment when your profit margin is so low to start with.

Brad

This is the answer I expected. So if you want to cash out of crypto currency, how do you do it? Is it only changed between virtual accounts or can you exchange it to legacy currencies and take it out in an ATM? Before I invest in something I want to be sure it has tangible or practical value in the real world.

 

[DanSanchez]

I don't really understand how fiat digital currencies are much different than what we have now with banks.

If you buy something for $2,500 it is not like you normally pay in cash now. You use a CC or Debit card tied to fiat currency. That number is just a digital amount in a virtual account. The balance goes down.

I am not really sold on crypto, certainly not endless shitcoins, but I don't really see what problem this solves either.

Brad

Look into the Digital Yen, the main difference is that central banks will have the ability to control where, when, and how you spend the money. Many speculate they will be introduced as an EBT replacement, but with Yellen finally admitting that inflation is becoming "rapid" they'll use that catalyst as a driver to introduce a "new way" to control inflation. The dollar defaulted on it's gold obligations in 1971 (https://wtfhappenedin1971.com/) and it allowed the US state to become the main beneficiary of an endless debt ceiling.

With a digital dollar, they would have to compete with sound money like Bitcoin. Once people realize that prices aren't going up because people are greedy, but because their money is being diluted, they will seek safer vessels.

Check BitRefill.com - I use it sometimes to buy giftcards with bitcoin, but the native denomination of trade in bitcoin has been happening for a long time. I personally had a domain store running on bitcoin in 2017 and it was mildly successful. Now I have 48hr, which only accepts bitcoin. It is for a reason. I dont want to have to subsidize the extreme overspending of a single country by utilizing dollars as my trade vehicle. Everyone that does, and accepts CBDCs will further surrender their ability to remain free from the taxation of inflation. Because that's what it is, using monetized "new" dollars to spend faster, at the expense of the value you already created.

It is a vehicle that manufactures inequality, poverty, and keeps countries at the helm of a monetary system that is essentially broken. The actual price of bitcoin is irrelevant for trade, I will give someone 20% to 50% discounts if they pay me natively in Bitcoin. I've operated under that premise for years because it is clear, the USD is only there to serve as a siphon of value into the hands of those that produce nothing. The digital dollar, fed coin, CBDC will only accelerate this truth.

Just for context, I highly recommend everyone to try to understand the way banks are failing today in the "reverse repo" collapse happening now. George does a great job at explaining this jumbled mess of a system.

 

[bmugford]

This is the answer I expected. So if you want to cash out of crypto currency, how do you do it? Is it only changed between virtual accounts or can you exchange it to legacy currencies and take it out in an ATM?

These stores would need entirely new systems to handle crypto payments. There is no world where you can pay for groceries with thousands of shitcoins, many popping up daily.

There is a better "store of value" argument to be made, than actual usage at this point. Take Bitcoin, it has massive technical limitations as a usable currency and huge transaction fees.

It is only useful in a small number of scenarios as an actual exchange currency, at this point.

There are multiple ways to hold crypto from exchanges, hardware, paper wallet, etc. They come with a varying amount of risk and/or pain in the ass factors when it comes to use in the real world.

If you have the currency on an exchange, it is generally easy to just sell for fiat currency. That is at least for the major players. If it is some obscure shitcoin it can be a many stage process.

Of course the vast majority of countries treat crypto as property, not currency. Which means any times you sell crypto (for a profit or loss), use crypto to pay for something (for a profit or loss), or receive crypto as payment for something...all of those are taxable events that must be recorded and reported to the IRS on taxes.

Brad

 

[DanSanchez]

These stores would need entirely new systems to handle crypto payments. There is no world where you can pay for groceries with thousands of shitcoins, many popping up daily.

There is a better "store of value" argument to be made, than actual usage at this point. Take Bitcoin, it has massive technical limitations as a usable currency and huge transaction fees.

It is only useful in a small number of scenarios as an actual exchange currency, at this point.

Brad

It's only bitcoin, shitcoins are just that. The store of value comes from it's limited issue, not from it's price. What technical limitations are you talking about? Download Blue Wallet of Muun Wallet to try lightning. Instant payments with almost zero fees. I use it daily.

A store would only need a phone to accept payments in a retail environment, no POS or banks needed in that case. It is scalable faster than the existing payment networks based in USD too. A Lightning node would essentially help any store become their own POS with unlimited devises processing near-zero cost payments. It's working now.

You can then take those bitcoin and put them inside your wallet for cold-storage without needing a bank.

Gotta look into it, you're using cons from 3-4yrs ago. Bitcoin is the most dominant payment network on the planet, nothing can compete.

Here is a prime example....

https://twitter.com/x/status/1416456598705229826

 

[bmugford]

Look into the Digital Yen, the main difference is that central banks will have the ability to control where, when, and how you spend the money. Many speculate they will be introduced as an EBT replacement, but with Yellen finally admitting that inflation is becoming "rapid" they'll use that catalyst as a driver to introduce a "new way" to control inflation. The dollar defaulted on it's gold obligations in 1971 (https://wtfhappenedin1971.com/) and it allowed the US state to become the main beneficiary of an endless debt ceiling.

With a digital dollar, they would have to compete with sound money like Bitcoin. Once people realize that prices aren't going up because people are greedy, but because their money is being diluted, they will seek safer vessels.

Check BitRefill.com - I use it sometimes to buy giftcards with bitcoin, but the native denomination of trade in bitcoin has been happening for a long time. I personally had a domain store running on bitcoin in 2017 and it was mildly successful. Now I have 48hr, which only accepts bitcoin. It is for a reason. I dont want to have to subsidize the extreme overspending of a single country by utilizing dollars as my trade vehicle. Everyone that does, and accepts CBDCs will further surrender their ability to remain free from the taxation of inflation. Because that's what it is, using monetized "new" dollars to spend faster, at the expense of the value you already created.

It is a vehicle that manufactures inequality, poverty, and keeps countries at the helm of a monetary system that is essentially broken. The actual price of bitcoin is irrelevant for trade, I will give someone 20% to 50% discounts if they pay me natively in Bitcoin. I've operated under that premise for years because it is clear, the USD is only there to serve as a siphon of value into the hands of those that produce nothing. The digital dollar, fed coin, CBDC will only accelerate this truth.

Just for context, I highly recommend everyone to try to understand the way banks are failing today in the "reverse repo" collapse happening now. George does a great job at explaining this jumbled mess of a system.

I get the inflation argument, though I think some people are going way over the top on it.

There is nothing unique with crypto that makes it a better hedge vs inflation than other property, assets, collectibles, etc IMO.

Inflation would drive everything up, not just crypto.

Brad

 

[bmugford]

It's only bitcoin, shitcoins are just that. The store of value comes from it's limited issue, not from it's price. What technical limitations are you talking about? Download Blue Wallet of Muun Wallet to try lightning. Instant payments with almost zero fees. I use it daily.

Let me know when Bitcoin is as efficient as Visa when it comes to processing transactions.

How can you use Bitcoin to buy a $4 cup of coffee without a high transaction fee?
Which coffee shop can I go to and buy that cup of coffee with bitcoin?

There is hardly any real world actual usage cases at the moment.

Everyone takes USD. Hardly anyone takes bitcoin as payment.

The average person is not going to go through all these hoops for a basic transaction that works fine on CC.

Brad

 

[DanSanchez]

I get the inflation argument, though I think some people are going way over the top on it.

There is nothing unique with crypto that makes it a better hedge vs inflation than other property, assets, collectibles, etc IMO.

Inflation would drive everything up, not just crypto.

Brad

It's just Bitcoin, ETH and all the other shitcoins are inflationary in extreme ways. Most can't even tell you how much circulating supply there is. Basically mimicking the fiat/dollar system to make the richest stakers, richer.

Bitcoin is unstoppable, it cannot be inflated. RE can be confiscated and taxed into oblivion by counties, cities, states, and federal entities. Assets, depends on their liquidity. Bitcoin is the most liquid asset, I'm focused on trading domains for it because it matches the rarity and hardness of the domains I'm selling. Dollars are inflated, counterfeit copies. Almost 40% of all dollars in existence were created during 3/2020 - 4/2021.

Download BlueWallet.io and send me a lightning invoice for 100 sats, I'll pay it from here for almost free.

 

[bmugford]

Some other things to factor in, crypto is not as anonymous as people promote.

If you are not doing anything shady, no big deal. If you are doing something shady that public blockchain will be there to haunt you forever. The second you get tied to a wallet those transactions are public, and easily traceable for law enforcement or anyone else who wants to put in some research.

The ease of tracking has lead to many major criminal rings being taken down and influencers with their rug pull shitcoin promotions being exposed.

It is also very easily traceable for the IRS, when it comes to tax fraud.

Crypto is always at a risk from world governments as well. It is true their main power is currency (and military).

There is no way they will let it threaten that power in any major way without taking action.

Brad

 

[DN Playbook]

I'm seeing a lot of rhetoric that makes all of this sound exciting. I am not seeing a lot of facts. Crypto and nft's depend on a large number of people to buy into them in order for them to have any value. So there is motivation to talking them up. But people can't live on crypto currency as far as I can tell. Physical currency has at least a couple of thousand of years' history and is accepted everywhere. Today, it is mostly digitally transferred in the Western world but people understand them. Hard to see crypto currency gaining track against legacy currencies in such a short period of time. IMHO.

 

[DanSanchez]

Let me know when Bitcoin is as efficient as Visa when it comes to processing transactions.

How can you use Bitcoin to buy a $4 cup of coffee without a high transaction fee?
Which coffee shop can I go to and buy that cup of coffee with bitcoin?

There is hardly any real world actual usage cases at the moment.

Everyone takes USD. Hardly anyone takes bitcoin as payment.

The average person is not going to go through all these hoops for a basic transaction that works fine on CC.

Brad

Bitcoin can process 1000x more transactions for a fraction of the energy required by Visa alone, add the USD wire/SWIFT system to that inefficiency and bitcoin is standing alone in a valley of dead fiat. Bitcoin adoption is growing at a faster rate than the internet, in fact, it will get to a billion people 5yrs sooner.

Everyone that takes USD will start seeing their dollars be worth less every time. Prices started rising outside the US before you guys saw them rise in the US. The average person won't be able to afford to live off of dollars soon, many here in Guatemala live off of $1 and they are starting to suffer greatly. Rich folks won't notice as much, poor people will starve if they continue using the dollar. The use case is becoming evident in places like El Salvador, which are dollarized.

On the government taking action against Bitcoin (forget crypto), they already have. China has banned it almost every year since 2015. They most recently banned bitcoin mining, which just resulted in a hash power drop of almost 60%. The network adjusted, there was a scheduled difficulty increase due to so much competition, but it adjusted down and allowed existing miners to profit more.

 

[bmugford]

It's just Bitcoin, ETH and all the other shitcoins are inflationary in extreme ways. Most can't even tell you how much circulating supply there is. Basically mimicking the fiat/dollar system to make the richest stakers, richer.

Bitcoin is unstoppable, it cannot be inflated. RE can be confiscated and taxed into oblivion by counties, cities, states, and federal entities. Assets, depends on their liquidity. Bitcoin is the most liquid asset, I'm focused on trading domains for it because it matches the rarity and hardness of the domains I'm selling. Dollars are inflated, counterfeit copies. Almost 40% of all dollars in existence were created during 3/2020 - 4/2021.

Lots of things are rare and don't have value, so the rarity argument is non-starter to me. It comes down to demand. If there is demand + rarity then sure, but rarity alone means nothing.

Why is bitcoin a better hedge than real estate, gold, silver, collectibles, etc.? It isn't.

It is an asset like anything else.

Brad

 

[bmugford]

Bitcoin can process 1000x more transactions for a fraction of the energy required by Visa alone, add the USD wire/SWIFT system to that inefficiency and bitcoin is standing alone in a valley of dead fiat. Bitcoin adoption is growing at a faster rate than the internet, in fact, it will get to a billion people 5yrs sooner.

Everyone that takes USD will start seeing their dollars be worth less every time. Prices started rising outside the US before you guys saw them rise in the US. The average person won't be able to afford to live off of dollars soon, many here in Guatemala live off of $1 and they are starting to suffer greatly. Rich folks won't notice as much, poor people will starve if they continue using the dollar. The use case is becoming evident in places like El Salvador, which are dollarized.

On the government taking action against Bitcoin (forget crypto), they already have. China has banned it almost every year since 2015. They most recently banned bitcoin mining, which just resulted in a hash power drop of almost 60%. The network adjusted, there was a scheduled difficulty increase due to so much competition, but it adjusted down and allowed existing miners to profit more.

People need to realize something... You know we are coming off a pandemic right?
One where people spent far less money than normal.

More people are spending now because of that.

A lot of this "inflation" is from a low. For instance compare gas prices, hotels, flights to pre-pandemic level.

Yes, inflation is a thing. It is also a boogeyman. It will find an equilibrium.

Brad

 

[DN Playbook]

On the government taking action against Bitcoin (forget crypto)

Isn't bitcoin crypto?

The average person won't be able to afford to live off of dollars soon, many here in Guatemala live off of $1 and they are starting to suffer greatly.

How can people in a small village or elsewhere in Guatemala use bitcoin or crypto to buy food???

 

[bmugford]

I also would be more pro Ethereum that Bitcoin personally, as it has better actual use cases now and in the future IMO.

I think when it comes to currency some (limited) supply is needed to keep the system going. Over time currency is lost via theft, death, crashes, loss of credentials, etc.

The supply of Bitcoin would start dwindling on a long enough time scale. I don't think that is a positive thing when it comes to a currency use.

Brad

 

[DanSanchez]

People need to realize something... You know we are coming off a pandemic right?
One where people spent far less money than normal.

More people are spending now because of that.

A lot of this "inflation" is from a low. For instance compare gas prices, hotels, flights to pre-pandemic level.

Yes, inflation is a thing. It is also a boogeyman. It will find an equilibrium.

Brad

That's the central bank's argument, it isn't true. You can see it reflecting in the producer price index, which is often ignored by the media. The M2 money supply is at extreme levels, 40% of all dollars in existence today were created from thin air in less than 12 months. The inflation we see now is due to the oversupply of money in the real economy, mostly injected through banks and franctional reserve banking. The Fed removed ALL reserve requirements from banks right before Covid started, mostly due to a Repo Market scare in Sept 2019. Not related at all to the pandemic shutdowns.

I would argue the shutdowns simply delayed the inevitable inflation by a few months and will make it much worse by 2022.

Eth is utter trash, you're comparing a copy of the dollar to sound-money. Deflationary currency is the pendulum swinging away from the existing system, it's not at all like the dollar, which has made us all dependent on endless inflation to realize growth. It has polluted prices to an extreme level, whereas people have trillions of dollars to allocate to negative-yielding bonds in Europe, or can afford to borrow $1 million dollars for a family home, when they clearly don't have it.

There is a retraction coming in the fiat system and that's when bitcoin (sound money) will be the key to stabilizing the lack of fiduciary responsibility central banks have had over the past 50 years in default.

On ETH use cases, they're farming tokens and shill-bidding on doodles, sure most people in bitcoin won't touch that stuff with a ten foot pole. It is for a reason, it is a false perception of value. Most of those tokens are falsely inflated with fake funding injections. Most of those exchanges are literal scams that are there to siphon away your bitcoin. I know of several ICOs from 2017 that started the same way and ended in total disappearance. Ultimately ETH is a play-toy compare to bitcoin, their POW blockchain is shifting to POS and their miners, which secure their network, are getting screwed. You can't run a full-node or a master node, you can try syncing the blockchain beyond 3 months, but you might have to wait a few years and need a few hundred terabytes of memory.

 

[bmugford]

That's the central bank's argument, it isn't true. You can see it reflecting in the producer price index, which is often ignored by the media. The M2 money supply is at extreme levels, 40% of all dollars in existence today were created from thin air in less than 12 months. The inflation we see now is due to the oversupply of money in the real economy, mostly injected through banks and franctional reserve banking. The Fed removed ALL reserve requirements from banks right before Covid started, mostly due to a Repo Market scare in Sept 2019. Not related at all to the pandemic shutdowns.

I would argue the shutdowns simply delayed the inevitable inflation by a few months and will make it much worse by 2022.

Show attachment 195873

Eth is utter trash, you're comparing a copy of the dollar to sound-money. Deflationary currency is the pendulum swinging away from the existing system, it's not at all like the dollar, which has made us all dependent on endless inflation to realize growth. It has polluted prices to an extreme level, whereas people have trillions of dollars to allocate to negative-yielding bonds in Europe, or can afford to borrow $1 million dollars for a family home, when they clearly don't have it.

There is a retraction coming in the fiat system and that's when bitcoin (sound money) will be the key to stabilizing the lack of fiduciary responsibility central banks have had over the past 50 years in default.

Honestly, it sounds like you are just fear mongering inflation and pumping Bitcoin. More power to you, but I wonder how all the people who invested at $64K are feeling now?

That loss is certainly more than the loss from inflation in the same time.

Any asset is a hedge against inflation.

Even if inflation is the issue...therefore Bitcoin is not the answer to me.

I don't think Bitcoin is going to re-invent the world. I don't see anything special about it either vs other crypto or assets in general.

Brad

 

[DanSanchez]

Honestly, it sounds like you are just fear mongering inflation and pumping Bitcoin. More power to you, but I wonder how all the people who invested at $64K are feeling now?

That loss is certainly more than the loss from inflation in the same time.

Any asset is a hedge against inflation.

I don't think Bitcoin is going to re-invent the world. I don't see anything special about it either vs other crypto or assets in general.

Brad

You can have opinions, certainly, but you are using arguments from 2017 that I've addressed and you continue bringing up fallacies to dispute how bitcoin actually works. You like ETH, it's not a comparable system at all, it is an actual scam though, but power to you there.

On "scare mongering" inflation, it's incoherent to want to ignore the inflation if you earn dollars, you can do it if you want, but it will be at your own expense. I am not afraid to discuss the truth if you think it's scary, I don't know what to tell you. Don't act if you feel like I'm trying to force you to anything.

The price drop was unfortunate, but ETH also fell by 60%, which is a higher percentage loss than bitcoin. I saw it as an opportunity to acquire more bitcoin faster, erase the speculators from the equation who are looking for more dollars from trading bitcoin.

Bitcoin is on a new realm, clearly you are distorting it because you have little perspective on how it actually functions. No offense though, you have little perspective on it's ability to remain strong even after being attacked on multiple fronts by those that would rather see you accept the inflation and have to work harder to pay for the same things.

 

[bmugford]

You can have opinions, certainly, but you are using arguments from 2017 that I've addressed and you continue bringing up fallacies to dispute how bitcoin actually works. You like ETH, it's not a comparable system at all, it is an actual scam though, but power to you there.

On "scare mongering" inflation, it's incoherent to want to ignore the inflation if you earn dollars, you can do it if you want, but it will be at your own expense. I am not afraid to discuss the truth if you think it's scary, I don't know what to tell you. Don't act if you feel like I'm trying to force you to anything.

The price drop was unfortunate, but ETH also fell by 60%, which is a higher percentage loss than bitcoin. I saw it as an opportunity to acquire more bitcoin faster, erase the speculators from the equation who are looking for more dollars from trading bitcoin.

Bitcoin is on a new realm, clearly you are distorting it because you have little perspective on how it actually functions. No offense though, you have little perspective on it's ability to remain strong even after being attacked on multiple fronts by those that would rather see you accept the inflation and have to work harder to pay for the same things.

I am not surprised Bitcoin pumpers can't accept valid criticism and want to diminish it.

I have some holdings as a hedge, but I don't pray at the alter of Bitcoin like some people do.

I also don't take my investment guidance from Elon Musk, like shitcoiners do.

I am reasonably concerned about inflation. You really think we are going to live in a world where Bitcoin becomes the one world reserve currency?....Please.

Brad

 

[Lox]

Bitcoin, any coin: Transactions that are computationally impractical to reverse would "protect sellers from fraud", ... no comment.

Every time we swap $ for BC, we're swimming in a muddy waters, risking to lose % - in a second - because the stability of s.c. coins are heavily deepened on Q4/Q1 wax players (in <> out)

Late 1990s: When we put the SETI project algo + HashCash algo together, we get the Bitcoin.

There is a very tiny reason to believe that the Bitcoin or any coin will contribute to the rise in global prosperity. Rules of Jungle. Your smartphone app activity / commands can be intercepted just like that.

... Trust is much much older and wiser than s.c. Bitcoin. I will accept CBDC.

imo

Regards

 

[DN Playbook]

Any child above 5 years of age understands money. You give them $1 or so and they can buy ice cream. They see the value in fiat currency. They can see the benefits of saving their allowance. Simple. How would you explain bitcoin to a five year old? Any currency is only as valuable as the those who are willing to accept it and understand it. If it will only be floated among those who speak bank and computer jargon then it will continue to have extreme fluctuations and limited usability. And even eventually evaporate. All other investments can be liquidated and turned into cash. But it doesn't seem so with bitcoin or other crypto currencies unless you can find someone that accepts them and then is able to sell you something you can turn into cash. Am I wrong here?