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Not really. Fiat currencies today are issued and backed by governments. When the government fails and the country falls into deep debt or other issues, they cu
by raiyu 9y ago
Not really.
Fiat currencies today are issued and backed by governments. When the government fails and the country falls into deep debt or other issues, they currency becomes devalued.
So everything is ultimately backed by something to an extent. In this case if it's an ICO it is used for transact with this company on their product, which is the underlying backing. So if the company falls apart, it would stand to reason that the coin would drop in price, since it isn't backed by anything.
Not saying they are the same, simply pointing out that there is a link.
You can also look at the currencies of countries and their value compared to other currencies when they go through various economic turmoil.
- acjohnson55 9y agoAgreed. The whole point of owning a token is the idea that some person will eventually demand it because they require it for something they want. Either some transaction in the token ecosystem, a dividend, or _something_. I find it really hard to believe most of these tokens will have long-term demand.
- deleted 9y ago[deleted]
- olivermarks 9y agoFiat currencies are issued and backed by banks that lend that currency to nation state governments. There are only two countries left on the planet still in control of their currencies...Iran and North Korea.
- JumpCrisscross 9y ago> Fiat currencies are issued and backed by banks that lend that currency to nation state governments There are three types of money: central bank reserves, physical currency and commercial bank money. The U.S. government (Fed and Treasury, respectively) directly controls the first two down to the cent. Commercial banks "make" the final one, but to get the right to do that they have to agree to Federal Reserve jurisdiction (internationally, this happens with central banks entering into swap agreements with the Fed, i.e. opening "accounts" with the Fed into which the Fed deposits U.S. dollars whose--since this needs to be said--quantities it gets to track).
- olivermarks 9y agoMy understanding is the 'Federal Reserve' is a collection of private corporations/banks founded in 1913 who lend money to the US treasury at interest paid as dividends.
- JumpCrisscross 9y ago> My understanding is the 'Federal Reserve' is a collection of private corporations/banks founded in 1913 A common misconception, but incorrect [1]. The Federal Reserve was created by an act of the Congress in 1913 [2]. Part of the confusion arises from private banks holding "shares" in their respective regional reserve banks. These "shares" are less "share of stock" than "you are regulated by us" membership accounts with an archaic label. The history you mention, of a private organization gradually falling under the purview of public regulation, is closer to that of the Bank of England's [3]. > who lend money to the US treasury at interest paid as dividends American banks are required to hold a lot of their capital in safe assets, i.e. U.S. Treasuries and things that look like Treasuries. So yes, banks lend money to the government and then get back interest. If you'd like, you can do this too [4]. [1] https://www.frbsf.org/education/publications/doctor-econ/2003/september/private-public-corporation/ https://www.frbsf.org/education/publications/doctor-econ/200... [2] https://en.wikipedia.org/wiki/Federal_Reserve_Act https://en.wikipedia.org/wiki/Federal_Reserve_Act [3] http://www.intriguing-history.com/bank-of-england-history/ http://www.intriguing-history.com/bank-of-england-history/ [4] https://www.treasurydirect.gov/indiv/research/indepth/tbills/res_tbill_buy.htm https://www.treasurydirect.gov/indiv/research/indepth/tbills...
- olivermarks 9y agouseful links, thank you.