We are joined by Kirian Van Hest, who goes by Deso online, regarding his new article on his concerns over the Bitcoin model for currencies. Deso sees immense value in digital ledgers and trustless transactions, but thinks the current Bitcoin model has several weaknesses.
Some of these weaknesses in the Bitcoin model are being exploited by Tether, a stablecoin whose system he describes as a Ponzi scheme. We go through in detail, in the previous Part 1, the issues with the current cryptocurrency model.
In now this Part 2 of the interview, we discuss the Tether Ponzi scheme and how it may contribute to the eventual demise of the current version of Bitcoin’s cryptocurrency model. Please review Part 1 for background material for today’s continuation of the topic.
Part 2 Topics:
Why Tether is not backed 100% by dollar
Why Tether prints Tethers to buy Bitcoin and sell for dollars
During March panic crash, everything sold for dollars, exposing the Ponzi scheme
How Tether’s impending Bitcoin liquidation, post collapse, will affect Bitcoin prices
Bitcoin miners will eventually consolidate as prices drop below cost of production
The subsequent loss of trust will call into question the current cryptocurrency model
Further, the crypto model is closely following the early American banking model in two ways:
–Bitcoin’s Lightning network is the digital representation of the central banking system –Tether is the equivalent of fractional reserve banking
The ideas of digital ledger technology and trust-less transactions are very valuable; however, changes need to be made to the model to realize these goals
We integrate the developments of the private cryptocurrencies with:
–the IMF plan to implement worldwide digital national currencies
–the implementation of DLT into the commercial banking system
We discuss why DLT in the national banking system will not stop a hyperinflation of the currencies
We propose the steps needed to protect the integrity of currencies, regardless of the form in which they come
Deso’s article: Why i hate Bitcoin and why Tether will end up killing it.
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