Let’s go back to 2008. There was an economic crisis. The government was vigorously looking for solutions to get out of the trouble. Central Bankers suggested, “a ground-breaking technique” called Quantitative-Easing, known as Q.E. This resulted in an unprecedented federal intervention to rescue banks and restore confidence in the finance sector. Bitcoin paper was released, and the era of crypto began.
Characteristics of crypto are way more different than the legacy financial system. Your wallet, the primitive part of the system, doesn’t care about your religion or skin color; if we speak more specifically about Europe, It doesn’t care about where you come from. All it matters is your wallet. (I must say this is a fucking great invention ever). I still think it has a great potential to push our civilization further.
On the other hand, crypto is not a regulated area. The Crypto ecosystem has bad guys and good guys, and as of now, we don’t have police in place. The downside of having non-regulation is those bad guys can just get away with it. As will happen with Luna’s Foundation, we will likely not see any police investigating this case.
To answer this question, we should be looking at the legacy financial system where bankers have their 9-5 jobs and do repetitive things all day long without any change. Everything is redundant, formalized, and regulated. We can’t expect any innovation coming out of this vicious cycle, right? We need people to think outside of the box.
I remembered the first Bitcoin crash in 2013. There were no stable coins, and it is now 2022. We have many stable coins now, and we need to keep innovating. Please look at where we are in defi.
I can tell you what will happen in the next crisis. Central bankers will print money again. The term might not be “printing money,” but I think it will sound so fabulous that you will think this time is different, but in the end, they will print money again because they are addicted. I believe this is the same as when you feel it is time to hard fork a pos chain. This could be addictive and dangerous. This could kill innovation in the crypto space. Instead of the hard fork and saving Luna, we need to rethink a new stable coin resistant to bank runs.
WoC Chief Economist