Walt (01-14-2022)
Walt (01-14-2022)
My two cents on distributed ledgers/smart contracts:
Right now, we have the most extensive world trade system ever. It is easy to move goods and services almost anywhere on earth, and to pay for them easily. More amazingly, contract disputes are well handled, without allowing local courts to rip off foreigners. So why do we need distributed ledgers/smart contracts?
That is all works because of a few large international banks. They are so complex no one really knows where the risk is, or even where they are making their money. There is no way to ring fence their operations, because they must by definition be inter-jurisdictional. It would not be clear which government should bail them out, if they failed.
So right now, I see distributed ledgers/smart contracts as a backup in case we lose our international finance system.
In the future, it might be a way to democratize international business. People too small to be supported by the international banks could trade internationally with ease... MAYBE. But who knows.
Phantasmal (01-14-2022)
You refuse to accept the fact that the world knows the federal reserve is insolvent. Everyone is running away from the dollar. The markets are about to collapse for the 6th time in 35 years. Zombie companies are being kept buoyant with endless QE. Bitcoin City is preparing to sell Bitcoin bonds paying 6.7%. It's all about risk and reward.
Go back and compare the dotcom scam to what we see today with the Uber and Peloton scam. Who the hell is investing in all these red ink companies? The dotcom scam resulted in the nasdaq dropping 90% in a very short time. All these millennial investors are about to learn a painful lesson on how the game is played.
The Nasdaq Composite fell by 78%, which is a lot, but not the 90% of your claim. It caused almost no inflation. Inflation was very low at the time.
The Dot Com Bubble was bad for me... But it certainly was not a systemic threat like the Great Recession, 7 years later. Even if Uber and Peloton collapse completely, they are only 0.4% of the market or so. We would hardly notice it.
Do not get me wrong, the market is overvalued, and will contract (sooner or later), but that is hardly a disaster.
Anytime 90% of an industry goes bankrupt, it's considered a scam. There are thousands of companies like Uber and Peloton that never made a profit yet continue to get huge investments. Who are these inventors? Airbnb and Uber alone could start a dotcom type crash that sends the entire gig economy into a downward spiral. That won't be good for home and auto ownership.
90% of the tech business did not go bankrupt. It was mostly loss of value, without bankruptcy. For instance, Cisco lost 86% of its market value, but did not go bankrupt. They were unreasonably overvalued, and that was adjusted by the market. Their business continued to generate a profit, so they had no need of bankruptcy protection.
Airbnb and Uber are also unreasonably overvalued yet continue to get huge investments that will lead to something other than a typical market adjustment. Again, economists are projecting a 45% drop in the markets. Bitcoin is expected to drop 60%. That would be a good time for anyone who understands risk/reward to get in.
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