RE: Fleccy12 Jan 2023 18:17
"The next phase of crypto is 'stable coins' a digital version of FIAT. The attraction of crypto is the ease of payments. It cuts out the middle man who is scraping pretty much 3% off every transaction. With crypto being peer to peer, that business is dead. A blockchain ledger is however a very important part of the chain. Without it, tax can go unpaid, crimes can be committed etc etc. Governments and business are very interested in the crypto world, that's why it will be embraced.
DEFI is the future, FIAT will soon be the past."
There are a few things to unpick there.
First off, Fiat currencies are tied to the economy of the Country where the Central Bank is located, who control their respective currency, except the EU where the ECB controls the currency across many countries. You could argue that the Euro is similar to a Decentralised token, as it's used across many countries in the absence of a debt union. The problem with the Euro is the management of debt across the Euro block, since the Bond spreads mean Germany can borrow money at a much lower rate than Greece, then lend money to Greece and make a profit even though they share the same currency.
In the real World, how would a Decentralised currency work when it comes to debt management? I can see how a stable coin tied to a Fiat currency and controlled by the relevant Central bank would work, with each Central Bank Fiat currency having its own stable coin, to be used in cross border transactions by the banks maybe, but that doesn't fit the utopian view of current crypto fans.
As far as daily transactions, why do you need crypto? The blockchain would have to be updated with every transaction and would be overloaded in short order. In developing countries like Nigeria, money management/ payment/transfer apps, like M-Pesa, have become popular; In the developed countries we all use our debit/credit cards to pay for everything electronically anyway.
I'm not being disingenuous when I say I see little every day use for Crypto currencies, I really don't see much real World use for them. Maybe you could explain how they get around the economics of a Decentralised currency in a World of many different economies? Who would guarantee and back a single Worldwide Decentralised Currency? And might it not just transfer control from Government/Central Banks to big corporations?
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