The real solution would have been to push for a complete overhaul of the international economic system, decouple all countries from relying on a single reserve currency, and encourage each country to issue their own, resource backed, currencies.
Yes I agree with this.
And, if we are to believe that there is a crypto currency that can act as world reserve currency, without allowing any central entity to issue the cryptos, then we are essentially saying that Triffin was wrong.
I also think this is true, there was no crypto in Triffin's time. There is no single country that crypto is issued to. Triffin's Dilemna doesn't work with Crypto.
If we were to believe this claim, and agree that Triffin Dilemna is true, then for any distributed crypto currency to become a world reserve currency, it is neccesary to be able to issue unlimited amount of cryptos and make the liquidity available for the countries as they need to expand.
Not true. You can still have a crypto that is used by the majority of the world and is used as an exchange between currencies. It would also be kept in reserve by governments.
You can have all countries using resource based currencies but there won't be a central banking solution. Crypto will be much more voluntary since you can take the open source code and add to it and/or create a new crypto with the same layout. If something goes wrong with the crypto, it's much easier to remedy.
Not true. You can still have a crypto that is used by the majority of the world and is used as an exchange between currencies. It would also be kept in reserve by governments.
So when countries want to expand and require a lot more of this crypto, how will they go about issuing that?
They'll have to take out a loan in crypto and in that loan they'll have to put up collateral and pay the loan off over time.
But there is a limited amount of the crypto so they can't go unlimited borrowing all the time. They also cant go unlimited printing either or they devalue their currency and people on the ground will just pay in Crypto instead. It will act like gold and silver did over 100 years ago.
When the US govt printed out too much money as gold/silver backed economy, traders would just redeem the dollars for gold/silver and trade the gold/silver in another country to get a profit.
But there is a limited amount of the crypto so they can't go unlimited borrowing all the time
This is the real point. Basically what we are saying is that Triffin's Dilemna is not a dilemna at all. Its a false dilemna.
They'll have to take out a loan in crypto and in that loan they'll have to put up collateral and pay the loan off over time.
Crypto is no good unless every aspect of it is recorded and verifiable in the blockchain. So for something like this to work (loan in crypto + collateral), you need the loan to be recorded + the collateral to be verifiable on the blockchain.
On top of that, there is an additional problem. If a country finds a huge gold mine (for example) and need to get this crypto loan against it to start funding their economy with it, there needs to be an easy way to "mine" additional required crypto, and secure it against these resources.
So what we are really talking about is a resource backed digital currency thats transparent, fully verifiable, and hopefully distributed.
So far, we dont have any crypto that actually does it, but I am sure that work is happening behind the scenes.
Crypto is no good unless every aspect of it is recorded and verifiable in the blockchain. So for something like this to work (loan in crypto + collateral), you need the loan to be recorded + the collateral to be verifiable on the blockchain
This is not a problem, this already happens.
On top of that, there is an additional problem. If a country finds a huge gold mine (for example) and need to get this crypto loan against it to start funding their economy with it, there needs to be an easy way to "mine" additional required crypto, and secure it against these resources.
I'm not sure what you mean by needing to "mine" additional required crypto. I get that the resources have to be secured against resources extracted from the country and that would come from their own resource based monetary system. Of government overprints their money supply, regular people can just exchange their sovereign currency for crypto through exchanges or P2P trading.
So what we are really talking about is a resource backed digital currency that's transparent, fully verifiable, and hopefully distributed.
Part of resource backed digital currency will be securing the supply chains of items on an immutable blockchain. Cardano and a few others like Vechain does this.
Yes I agree with this.
I also think this is true, there was no crypto in Triffin's time. There is no single country that crypto is issued to. Triffin's Dilemna doesn't work with Crypto.
Not true. You can still have a crypto that is used by the majority of the world and is used as an exchange between currencies. It would also be kept in reserve by governments.
You can have all countries using resource based currencies but there won't be a central banking solution. Crypto will be much more voluntary since you can take the open source code and add to it and/or create a new crypto with the same layout. If something goes wrong with the crypto, it's much easier to remedy.
So when countries want to expand and require a lot more of this crypto, how will they go about issuing that?
They'll have to take out a loan in crypto and in that loan they'll have to put up collateral and pay the loan off over time.
But there is a limited amount of the crypto so they can't go unlimited borrowing all the time. They also cant go unlimited printing either or they devalue their currency and people on the ground will just pay in Crypto instead. It will act like gold and silver did over 100 years ago.
When the US govt printed out too much money as gold/silver backed economy, traders would just redeem the dollars for gold/silver and trade the gold/silver in another country to get a profit.
This is the real point. Basically what we are saying is that Triffin's Dilemna is not a dilemna at all. Its a false dilemna.
Crypto is no good unless every aspect of it is recorded and verifiable in the blockchain. So for something like this to work (loan in crypto + collateral), you need the loan to be recorded + the collateral to be verifiable on the blockchain.
On top of that, there is an additional problem. If a country finds a huge gold mine (for example) and need to get this crypto loan against it to start funding their economy with it, there needs to be an easy way to "mine" additional required crypto, and secure it against these resources.
So what we are really talking about is a resource backed digital currency thats transparent, fully verifiable, and hopefully distributed.
So far, we dont have any crypto that actually does it, but I am sure that work is happening behind the scenes.
This is not a problem, this already happens.
I'm not sure what you mean by needing to "mine" additional required crypto. I get that the resources have to be secured against resources extracted from the country and that would come from their own resource based monetary system. Of government overprints their money supply, regular people can just exchange their sovereign currency for crypto through exchanges or P2P trading.
Part of resource backed digital currency will be securing the supply chains of items on an immutable blockchain. Cardano and a few others like Vechain does this.