Time will only tell whether the Bitcoin ecosystem successfully implements these countermeasures to late Renaissance banking crises.
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The underlying issue is really simple: participants in the ecosystem think they’re richer than they are. Total amount of hard currency in can’t be smaller than total amount of hard currency out. Confidence loss and profit taking has drained the hard currency reserves.
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That is the really charitable version. The less charitable version is “Why do participants believe themselves to be richer than they are? Because they’re in a credit bubble; their assets were bought with assets inflated by loans collateralized by their assets.”
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LOL. For real? This is your replacement for the FDIC?
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I am not affiliated with any Bitcoin exchange and am a notorious skeptic about the cryptocurrency ecosystem, about which I’ve been largely wrong every year since 2009 but still feel strongly that I will be right approximately once.
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...of course when done incorrectly this is a major factor of economic collapses such as the 2008 American housing market crash. See: The Big Short.
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