4 ms·

Ether and Bitcoin will be the base layers of the non-USD and non-YUAN financial system.

EA-3167 3y ago
What do you base that rather extraordinary claim on?
sharkjacobs 3y ago
What are you talking about? Is this purely hypothetical or is there a nascent independent financial systems that you think has potential to become the ~3rd largest in the world?
- rr808 3y ago
  Dont worry bro, there are thousands of posts on the net where people talk about how great it is.
A4ET8a8uTh0 3y ago
I watch that space out of personal interest and I currently see very little indication that this could even happen. There is some interest in bypassing existing dollar supremacy, but currently only China, EU and maybe BRICs as a whole could threaten it. And that does not even touch the digital aspect of it.
- prottog 3y ago
  > currently only China, EU and maybe BRICs as a whole could threaten it Only theoretically. The USD is the cleanest shirt in a pile of dirty laundry. Neither the euro nor any of the BRICS currencies are getting any cleaner.
- viewtransform 3y ago
  BRICS is a joke. Russia has a growing pile of Indian rupees and complains to India that they don't want any more. India will never agree to use the Chinese yuan as a dollar replacement because Xi Jinping is flashing his junk on their borders. China looks down on uppity India since they have a massive trade surplus with them. South Africa with water shortages and 16 hour power outages is not going anywhere economically. None of them want Russian currency because of sanctions. That leaves Brazil - which is looking to team up with nearly bankrupt Argentina for a common currency. Meanwhile Brazil (22B), India (122B) and China (380B) run multi-billion dollar trade surpluses with the U.S.
onlyrealcuzzo 3y ago
That financial system is and will be very small.
kurthr 3y ago
Nobody wants to transact in an inherently deflationary currency with high fees, unless they are speculators or money laundering. It's a store of value at best, which is more like gold than a currency. The gold standard was dropped for good reasons. It couldn't expand at the GDP growth rates and storage/transport fees were significant. Gold backed fiat solved the latter, but not the former.
- sb057 3y ago
  FWIW, the costs for transporting gold bullion are marginal. A fully-laden Boeing 747-400F cargo plane can carry 396,900 kg, or 12,760,000 troy ounces. At the current price of $1,936/ozt, that's over $24 billion in value transported for perhaps 0.1% overhead. These are perfectly reasonable sums to be expected in the realm of nation-state debt settlement.
  - kurthr 3y ago
    I agree those costs may not seem that high, and I think the transport costs in that case would be dominated by security. Daily BIS is ~$6T, and I'm not sure how much net would need to be transported, but even $1B/day in costs starts to seem significant. The problem is that even smaller quantities of $100M or $100k would have larger relative overheads. Once you're down to $1000 or toz size quantities where security is less of an issue, the testing and weighing costs become significant.
- scottiebarnes 3y ago
  If the alternative is fiat currencies printing themselves out of existence, then yes, people will happily transact in hard money with high fees. See Turkey, where you basically take on debt to buy anything (including commodity items like iPhones) that you can sell later, simply because the currency is spiraling out of control and you need your networth divested out of it.
  - WFHRenaissance 3y ago
    I'm always very surprised to see HN ignore the obvious counterweight that cryptocurrencies serve to fiat currencies.
imtringued 3y ago
You still need regulated banks and payment service providers.

What do you base that rather extraordinary claim on?

What are you talking about? Is this purely hypothetical or is there a nascent independent financial systems that you think has potential to become the ~3rd largest in the world?

rr808 3y ago
Dont worry bro, there are thousands of posts on the net where people talk about how great it is.

A4ET8a8uTh0 3y ago

I watch that space out of personal interest and I currently see very little indication that this could even happen. There is some interest in bypassing existing dollar supremacy, but currently only China, EU and maybe BRICs as a whole could threaten it. And that does not even touch the digital aspect of it.

prottog 3y ago
> currently only China, EU and maybe BRICs as a whole could threaten it Only theoretically. The USD is the cleanest shirt in a pile of dirty laundry. Neither the euro nor any of the BRICS currencies are getting any cleaner.
viewtransform 3y ago
BRICS is a joke. Russia has a growing pile of Indian rupees and complains to India that they don't want any more. India will never agree to use the Chinese yuan as a dollar replacement because Xi Jinping is flashing his junk on their borders. China looks down on uppity India since they have a massive trade surplus with them. South Africa with water shortages and 16 hour power outages is not going anywhere economically. None of them want Russian currency because of sanctions. That leaves Brazil - which is looking to team up with nearly bankrupt Argentina for a common currency. Meanwhile Brazil (22B), India (122B) and China (380B) run multi-billion dollar trade surpluses with the U.S.

onlyrealcuzzo 3y ago

That financial system is and will be very small.

kurthr 3y ago

Nobody wants to transact in an inherently deflationary currency with high fees, unless they are speculators or money laundering. It's a store of value at best, which is more like gold than a currency. The gold standard was dropped for good reasons. It couldn't expand at the GDP growth rates and storage/transport fees were significant. Gold backed fiat solved the latter, but not the former.

sb057 3y ago
FWIW, the costs for transporting gold bullion are marginal. A fully-laden Boeing 747-400F cargo plane can carry 396,900 kg, or 12,760,000 troy ounces. At the current price of $1,936/ozt, that's over $24 billion in value transported for perhaps 0.1% overhead. These are perfectly reasonable sums to be expected in the realm of nation-state debt settlement.
- kurthr 3y ago
  I agree those costs may not seem that high, and I think the transport costs in that case would be dominated by security. Daily BIS is ~$6T, and I'm not sure how much net would need to be transported, but even $1B/day in costs starts to seem significant. The problem is that even smaller quantities of $100M or $100k would have larger relative overheads. Once you're down to $1000 or toz size quantities where security is less of an issue, the testing and weighing costs become significant.
scottiebarnes 3y ago
If the alternative is fiat currencies printing themselves out of existence, then yes, people will happily transact in hard money with high fees. See Turkey, where you basically take on debt to buy anything (including commodity items like iPhones) that you can sell later, simply because the currency is spiraling out of control and you need your networth divested out of it.
- WFHRenaissance 3y ago
  I'm always very surprised to see HN ignore the obvious counterweight that cryptocurrencies serve to fiat currencies.

imtringued 3y ago

You still need regulated banks and payment service providers.