This is an interview with Stefan Katanic from coinbio.com. Ryan Herron will ask a few generalized questions and then get into the nitty gritty. Enjoy :)
Here is a snapshot of their white paper. It is not out as of the date of this posting but check back with https://coinbio.com/ in the coming weeks...
Intro.
There is without a doubt an undercurrent of monetary uncertainty brewing beneath the surface of our economy. Upon breaching the nexus between the over and under the-counter markets, this uncertainty may leave the greatest financial forecasters at a disadvantage to account for all variables.
This is because we are in the early stages of quite possibly the largest redistribution of wealth in recent history.
What the lessons of the Great Recession are starting to show, as more and more data can be aggregated, and as scholars begin to apply their litmus tests to it, is that for all of its complexity – our financial system is haplessly susceptible to contagion because it is still a system that exists to serve people.
People are inherently fickle, unpredictable, but also ingenious. If anything, the grey area currently siphoning billions of dollars between the mainstream and underground financial markets is testament to this ingenuity
We are living in a time when finance, the technology that makes it possible in the modern era and the internet are coming together. This process will not be quiet; by its very existence it seeks to disrupt. But as with any paradigm shift, profits can be extolled from the process of creative destruction.
The dawn of crypto-currencies and blockchain technology represents the current spearhead of this global realignment.
As a nascent challenger to the financial status-quo, Bitcoin was among the first of these alternative products to pave the way forward. In less than a decade it has managed to accumulate a global market capitalization rivaling the most stead-fast blue chip stocks, the caveat being that Bitcoin and its compatriots operate solely on the basis of peer-to-peer accountability.
The lack of regulatory oversight has indelibly brought forth its fair share of skeptics, who maintain that this entire process is nothing more than clever deception – a Ponzi scheme of international proportions for the most vocal critics.
But what difference (if any) exist between the machinations of financial institutions, and government agencies responsible for the litany of financial crises since 1971?
he purpose of this guide is to provide the reader with an analysis that seeks to colour the discussion without sugar coating it. What any prospective investor needs to know before they choose to put their money into anything revolves around the typology of an investment, personal philosophical choices as an offshoot of investment strategy, weighing risk and reward, and understanding the global climate and how their demographic fits into the whole schemata.
This is not a document that gives definitive financial advice, nor does it serve as a forecasting tool. It is a manual that upon reading, should provide the prospective investor with a well-rounded introduction into the opacity of the crypto-currency market. What transpires afterwards is between the investor and their investment.
Money: A Brief History
The origin of money, as a medium of exchange, store of value, and unit of account has undergone fundamental shifts throughout human history. Ever since we started to exchange one thing for another, there existed a need to facilitate that form of exchange by a certain means. The earliest form of exchange was simply trading good A for good B – or bartering. If you owned livestock and wanted grain for example, you would negotiate with another ‘seller’ and come to a mutually agreeable ‘price,’ or value determination based on the exchange of livestock for grain. However, this form of exchange is limited, especially when large quantities of things are concerned, so people started to standardize their exchanges with a different medium. The introduction of gold and silver ducats which galvanized the Hellenic and Roman period into prosperity is the first real predecessor to modern money. The advent of gold coinage allowed empires to grow and expand overseas, filling their coffers with more bouillon, and financing costly wars for territorial gain and colonization. During the early Renaissance, the exchange value of gold for various resources allowed different city-states to vie for continental prominence. The Venetians controlled the commanding share of the salt trade, and the expression ‘salt for gold’ comes from the notion that during this period, you could exchange one kilogram of salt for one kilogram of gold.
The advent of credit in the 15th century as a major contributor to this great-power struggle further emboldened the various monarchies of the western world to re-draw the global map in their image. The more rudimentary form of crediting is what transformed the city-state of Seville, Spain from a proverbial merchant backwater that trading loosely in silks and fabrics from the orient and around the Mediterranean basin into a powerhouse of economic prosperity during the Reign of Habsburg Spain. Credit also helped transform the Dutch Republic into a hub of transport and trade, with the port of Antwerp serving as one of Europe’s largest destinations by volume for the international exchange of goods and services. The introduction of paper currency, backed by gold was the next step in the evolution of the money market, whereby states would guarantee the value of their currencies based on a fluid quantity of reserves in the state treasury. The British Pound Sterling was originally called that because ‘one pound,’ coin was equal to one-pound weight of silver for example.
The transition from commodity money to fiat currency did not occur until later in the 20th century, where the international monetary system underwent its most radical, and far reaching transformations. What differentiates a commodity currency from a fiat is essentially reducible to the difference between a tangible thing you can touch and hold versus a promise. After the Second World War, the international monetary system was reorganized under the auspices of Bretton-Woods. The United States emerged from WWII as the leader of the western bloc, and with this heralded the rise of the US dollar as the world’s reserve currency. The United States would guarantee the free-flow of US dollars backed by gold, underpinned by a system of capital controls and fixed exchange rates.
The problem arose when the number of US dollars circulating on the international market exceeded gold reserves in the US treasury. By 1960, US monetary liabilities had passed the point of no return, and the Bretton-Woods system came under increasing strain. When President Richard M. Nixon unilaterally closed the gold window in 1971, it marked the beginning of the death of Bretton-Woods, and the introduction of a new financial system. The neo-liberal monetary order that was born from the ashes of Bretton-Woods is currently the system we find ourselves in. The rise of finance capital, and the advent of speculation on currency appreciation making more profit than tangible financial transactions was made possible because commodity money gave way to fiat.
A fiat currency is essentially a currency that is backed only by the guarantee of the state issuing it that deems said currency to be of any value. There is nothing behind that currency, and this is exactly the reason why macro-economic shocks have increased in frequency and intensity since the end of the gold standard. By giving rise to speculation, the current-account remains open for banks to fund their risky lending practices abroad. For the average investor unable to operate with the same capital stock, they are left to the mercy of transnational financial forces they cannot hope to control, and are locked in a system they can only hope to stay afloat in.
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