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The biggest risk to the world financial system is that people are going to realize the dollar isn't backed by anything, lose confidence in it, and it's going to
by smeej 6y ago
The biggest risk to the world financial system is that people are going to realize the dollar isn't backed by anything, lose confidence in it, and it's going to crash.
I don't know what you want to be holding if/when that happens, but I'd like to own some provably scarce resource that can be transmitted digitally.
- adyus 6y agoThe (U.S.) dollar is backed by the U.S. Army and always will be. Confidence decreases? The U.S. will likely start a war with the country whose currency tries to replace it (on "national security" reasons). Fiat will always be backed by military force.
- smeej 6y agoWell there's your problem: Assuming it will be a country's currency.
- adyus 6y agoIn that scenario, trust shifts to somewhere the U.S. cannot easily regulate. In case of crypto, that can just be banned and rendered useless, as long as the rest of the world is USD-bound. If a crypocurrency becomes popular in another country using another currency to on- and off-board, see my comment. It would take a miracle for cryptocurrencies to suddenly replace fiat without being bound to any fiat currency. Essentially, all the world would need to switch trust at once.