OMG. I am getting old. I find myself agreeing with…….gasp………an economist. And not just ONE of them, but TWO. At the Fed no less. Two economists at the New York Fed’s Money and Payment Studies believe that cryptocurrencies are a store of value that can be THE solution to making payments in a trustless environment. Obviously TRUST is essential for almost any type of payment and cryptos can satisfy that transaction trust. THIS REALLY IS A MUST READ! Way too much great information to paraphrase further. If you want to know the future, READ THIS.
(Bill Taylor/Founding Editor)
“Michael Lee and Antoine Martin, economists in the New York Fed’s Money and Payment Studies function, said cryptos are a store of value with the added benefit they “solve the problem of making payments in a trustless environment.”
“Like any functioning form of currency, cryptocurrencies facilitate payments between parties and provide a store of value,” Lee said before adding:
“What’s special about them is that they can serve those roles even in environments where trust—or lack of trust—is a problem.
Trust is implicit for practically any means of payment… Some of these problems go away with cash because when I hand cash to the grocer, there is no need for trusted intermediaries.
But if you think about it, even cash requires some trust. The grocer has to believe that the cash I pay with will retain its value and not be eroded by inflation or confiscatory monetary reforms. So she needs to trust the central bank.”
Cryptos, of course, do not have a central bank, nor can any one person or group control them. The only aspect you need to trust is 51% of the people, if that.
Cryptos “are not backed by a physical commodity,” Lee says. “But then neither is the dollar and most other modern currencies.
It’s long been known that currencies that are intrinsically worthless, mere pieces of paper are recognized as valuable because payments with money are so much easier than the alternative, barter.”…”