4 ms·

Imagine McDonald's makes its own money, let's call them clown-bucks

37 points by Crazyontap 4y ago

favorited 4y ago
That reminds me that McDonald's did print their own money! It was their version of a gift-certificate, before magnetic-strip gift cards were around. You'd get a bound booklet of 5 imitation dollar bills, which you could tear off and redeem for the equivalent dollar-value of food at McDonalds. https://imgur.com/a/6U3o64p https://imgur.com/a/6U3o64p
- superasn 4y ago
  Now imagine McDonald took a $10B+ loan and based on the collateral of the gift-certificates it has printed but hasn't given away. Because that is what is happening in crypto afaik. I think this part probably didn't happen in real word before ...or did it? (hoping it didn't)
  - fineIllregister 4y ago
    This whole analogy is bad because McDonalds produces physical goods, which provide a basis for a valuation of clown bucks, gift certificates, or whatever. At the some point, the holder of clown bucks can turn them into burgers, a commodity in a competitive market, that McDonalds has demonstrated the ability to deliver consistently. There is no incentive for McDonalds to stop producing these burgers, so no risk of rug pulling. Collateralizing the loan with McDonald's gift certificates would just be a bet that McDonald's will sell 10b$ more food, minus some delta to incentivize people to use the lender's clown bucks instead of greenbacks.
- bravetraveler 4y ago
  These were buried incredibly deep in my memory, thank you for the reminder
ratg13 4y ago
Is this not how airline and hotel points work?
- kelseyfrog 4y ago
  That's new. I didn't know I could buy points from those who make them and transact them between other accounts.
  - batiudrami 4y ago
    Funnily enough you actually can with airline points and there are websites dedicated to this economy of getting points then selling or transferring them to another airline where they are more valuable or useful (Singapore Airlines’ KrisFlyer program is very popular).
    - ratg13 4y ago
      Not just airlines, but other types of points or even Amazon gift cards.
- thenewwazoo 4y ago
  No, because loyalty points are unfunded liabilities on account sheets.
- impulser_ 4y ago
  What airlines or hotels are taking out loans backed by their points? That's the problem.
  - ratg13 4y ago
    All of the major US airlines did exactly this. https://www.marketwatch.com/story/airlines-are-using-frequent-flyer-programs-to-sell-debt-heres-how-it-works-11600285585 https://www.marketwatch.com/story/airlines-are-using-frequen... Or am I misunderstanding your comment?
geenew 4y ago
Canadian Tire Money: https://en.wikipedia.org/wiki/Canadian_Tire_money https://en.wikipedia.org/wiki/Canadian_Tire_money Used to be able to use that at the local video rental place.

37 points by Crazyontap 4y ago

That reminds me that McDonald's did print their own money! It was their version of a gift-certificate, before magnetic-strip gift cards were around. You'd get a bound booklet of 5 imitation dollar bills, which you could tear off and redeem for the equivalent dollar-value of food at McDonalds. https://imgur.com/a/6U3o64p https://imgur.com/a/6U3o64p

superasn 4y ago
Now imagine McDonald took a $10B+ loan and based on the collateral of the gift-certificates it has printed but hasn't given away. Because that is what is happening in crypto afaik. I think this part probably didn't happen in real word before ...or did it? (hoping it didn't)
- fineIllregister 4y ago
  This whole analogy is bad because McDonalds produces physical goods, which provide a basis for a valuation of clown bucks, gift certificates, or whatever. At the some point, the holder of clown bucks can turn them into burgers, a commodity in a competitive market, that McDonalds has demonstrated the ability to deliver consistently. There is no incentive for McDonalds to stop producing these burgers, so no risk of rug pulling. Collateralizing the loan with McDonald's gift certificates would just be a bet that McDonald's will sell 10b$ more food, minus some delta to incentivize people to use the lender's clown bucks instead of greenbacks.
bravetraveler 4y ago
These were buried incredibly deep in my memory, thank you for the reminder

ratg13 4y ago

Is this not how airline and hotel points work?

kelseyfrog 4y ago
That's new. I didn't know I could buy points from those who make them and transact them between other accounts.
- batiudrami 4y ago
  Funnily enough you actually can with airline points and there are websites dedicated to this economy of getting points then selling or transferring them to another airline where they are more valuable or useful (Singapore Airlines’ KrisFlyer program is very popular).
  - ratg13 4y ago
    Not just airlines, but other types of points or even Amazon gift cards.
thenewwazoo 4y ago
No, because loyalty points are unfunded liabilities on account sheets.
impulser_ 4y ago
What airlines or hotels are taking out loans backed by their points? That's the problem.
- ratg13 4y ago
  All of the major US airlines did exactly this. https://www.marketwatch.com/story/airlines-are-using-frequent-flyer-programs-to-sell-debt-heres-how-it-works-11600285585 https://www.marketwatch.com/story/airlines-are-using-frequen... Or am I misunderstanding your comment?

geenew 4y ago

Canadian Tire Money: https://en.wikipedia.org/wiki/Canadian_Tire_money https://en.wikipedia.org/wiki/Canadian_Tire_money Used to be able to use that at the local video rental place.