Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!

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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by ENERC » 04/11/18, 08:51

It is necessary to take this article carefully in echoes and look at the past of the guy who wrote it. The guy is a former adviser to the US Treasury and the IMF.
It's like asking a guy from an oil company to write an article about wind power.

The crypto were born following the financial crisis of the 2008 years and as many predict a new big financial crack in the year to varnish, critics on crypto become more and more virulent and rude. Nothing abnormal.

I think that the next crisis will be more serious than that of 2008 because we will no longer be able to increase our public debt by 30% as we did before: we will not be able to go from 98% to 130% of debt as we went from 60% to 90% to massively inject public funds to save the banks.
Moreover, the world has changed and become much more selfish: America first, Brasillia first, etc. Solidarity between countries to save the banks will not be as effective as 2008, and so the number of bankruptcies will be greater. The point where it's going to hurt a lot is that this time, it's the corporate debt that is causing the problem. The economic impact will be serious (see more).

Will cryptos win in 2019? Not sure. It will probably be in the aftermath.
The main "problem" with cryptos is that you can't create money like banks do. As a reminder, here is how a bank creates money:
- Mr X asks for a loan of 100 000 € to buy a home,
- the bank poses a mortgage of 100 000 € on the property
- and credits his account with 100 000 €
- she uses this money to speculate or finance the public debt
- and recover the interest paid by the praetor

As a reminder, French banks have created 35 times more currencies than they have. In other words, if 3% of loans are insolvent, she files for bankruptcy.

In crypto, it does not work like this: the praetor must have the funds. This prohibits any currency creation other than the slow, programmed creation of the blockchain. Crytos can not create virtual money as banks do. And if there is speculation, it is on the course crypto / fiat (= currencies of countries). You can not create a bitcoin by putting a mortgage on a home.

As for the energy cost of crypto, we must see that bitcoin is no longer the most widely used crypto (cf. https://coinmarketcap.com/exchanges/volume/24-hour/ ). Other cryptos have a much more favorable CO2 balance sheet.
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by ENERC » 04/11/18, 10:03

After....

The first phase of the crash has already begun:
- countries in difficulty: Venezuela, Turkey, Iran, ....
- currencies of countries in difficulty in free fall
- rise in interest rates (USA, Italy)
- slowdown in growth, including in China, (the case of the USA is apart because purchases were made before the rise in customs rates)
- public debt explosion (USA, China: 250% and 30 000 billion in July 2018)
- Reduction by the ECB of the available money, premise to the rise of interest rates in Europe

The second phase will probably occur via a payment default of a country. If, for example, Turkey, whose 72 holds € 24 billion in assets from Spain, calls for a reduction in its debt that has become non-refundable because, as they are denominated in euros, the Spanish banks fall and will drag the French into their downfall. It's just one of many possible scenarios. We're right on a powder keg.

The 3 phase is the expansion of the global crisis.

Since 3 months the price of bitcoin is stable at 5600 €. When it goes up significantly, it will be a sign that the crash is fast approaching.
Save who can before losing all his savings in the bank for those who have more 100 000 € or who think that this bank guarantee will not be respected.

Crypto safe haven during the next crisis ?. This is possible and this will generalize their use to the next crisis.
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by moinsdewatt » 04/11/18, 10:09

ENERC wrote:.

As a reminder here is how a bank creates money:
- Mr X asks for a loan of 100 000 € to buy a home,
- the bank poses a mortgage of 100 000 € on the property


No, there is rarely a mortgage.

I had taken a normal insurance. It's not a mortgage.

- and credits his account with 100 000 €
- she uses this money to speculate or finance the public debt

.

Whatever.
The 100 000 temporarily go to the account of the one who borrowed, to go rather quickly to the one with whom he made a real estate transaction. And after that it turns into the economy.
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by Ahmed » 04/11/18, 13:36

In addition to those reported by Moinsdewatt, I note some inaccuracies:

ENERC, you write:
Solidarity between countries to save the banks will not be as effective as 2008, and so the number of bank failures will be greater.

There is no need for "solidarity" for governments to save the banks: by proceeding in this way, they are saving themselves (and their friends!) ... it is all the easier because it is at the expense only taxpayers.
- Nothing prevents us from continuing to resort to debt, especially since there is no alternative to this option ...
- Defaults are inevitable since these massive debt policies can hide the systemic inability to operate as in the past: how, under these conditions, a refund would it be possible? I would be very curious if it is explained to me.
- A loan in the amount of 10000 € plays a dual role, but not as you describe it: it works for the bank in the form of the interest that it brings back to it and for the borrower, at least in the case of a productive investment (if it is for a good of consumption, it is only a temporary convenience).
- I can not imagine how cryptocurrency would resist a global monetary crack ...
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by ENERC » 05/11/18, 08:02

With numbers at the supports:
Image

If they cannot create money, how, for example, does the SG manage to have € 1351 billion in assets when they only have 37,5 billion real funds (line 5). The answer is line 6: loans to individuals and businesses on which they have repayment "insurance". Insurance is either a mortgage, or confidence in the borrower's ability to repay, or insurance taken out from a third party.
The 6 line is money that does not really exist.
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by moinsdewatt » 05/11/18, 08:27

ENERC wrote:
The 6 line is money that does not really exist.


Well yes it is the principle of lending by banks in the Western world.
You seem to discover.

But I understand that it can be a shock at first.

To give an idea the volume of new home loans to individuals in France was anticipated at the beginning of the year as 167 billion euros.
source: https://www.google.fr/amp/s/www.cbanque ... format=amp

The 6 liability line must be offset by the 1 line of financial assets. If the line 1 is not superior to the line 1 it goes very badly for the bank.
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by ENERC » 05/11/18, 10:42

I can not imagine how cryptocurrency would resist an overall monetary crack ...

If 100% was running in crypto, the 6 line would be lower than the 5 line in the table above. it drastically reduces currency inflation.
In crypto we can only pay with what we have and the blockchain checks the possession of the tokens (= banknotes) before authorizing the transaction.
In addition to crypto the money is directly held via a personal password or private keys that are put on a key in a safe. it avoids being in a situation like Cyprus in 2013.
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by Ahmed » 05/11/18, 19:28

ENERC: if we suppose, as you do, an impossibility to create money, therefore to generate debts, then the whole economic system would collapse instantly, since, as already seen, this liquidity can no longer be provided in sufficient quantities by the economy which some persist in calling "real".
I do not carry any value judgment here, anyway the debts are only a temporary remedy ...
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by Petrus » 17/12/18, 00:37

bitcoin.png
bitcoin.png (43.31 Kio) Accessed 3656 times
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Re: Bitcoin and cryptocurrency, what's a financial bubble? Explanations in 5 minutes chrono!




by ENERC » 17/12/18, 09:08

This is good news for the planet because the hashrate (= difficulty of mining) decreases:
Image
That's about 2 million mining machines that have been shut down since early November, about 2GW of electrical power.
30 000 PH / s it's 30 000 000 000 000 000 000 proposals encryption keys per second, knowing it takes a valid every 10 minutes.
Bitcoin is still far from being hackable.

With a value of "only" 100 billion for the 2000 combined crytocurrencies, it is still far from being enough to replace the currencies of the countries.
10 316 942 619 dollars traded in crypto on the last 24 hours. Source https://coinmarketcap.com/all/views/all/
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