Friday, September 15, 2017

Token Economy

The bitcoin and other crypto currencies are falling some 50% because of the Chinese government anti-speculation restrictions. The whole phenomenon will end badly, said Damon, like the Dutch tulip craziness. Israeli banks actively discourage their clients when try to buy bitcoins, because they do not want to be exposed to this kind of business. That is, they fear that it is for illegal transactions or cheating on tax, or that the client may sue them for his   losses. I have no bitcoins yet my banker is calling me twice a week to warn me of my non-diversified high-risk portfolio.

I think that these tokens (there are hundreds of them) will never become a real currency, because their worth is unsupported by an organization and varies according to the whims of the public. You cannot make a contract on a currency that changes its worth from day to day by 50%. When the government lost its control of the Argentine peso, people used the American dollar and the economy was dollarized. Only the strongest and stablest currencies can survive, like the Swiss franc and the American dollar. And in our days of miracles, the Israeli shekel.

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