Does crypto currency can save the economy?

[0t3p0t]

I agree that with the existence of crypto for poor and developing countries, there is an impact on the economy that can be absorbed by taking advantage of crypto developments.[/size]

Yes, taxes on local cryptocurrency exchanges and electronic wallets might help contribute every country's economy for few percentage but if improved and there is mass adoption it will be more. Some other local businesses here in my country accepted Bitcoin as payment through Lightning Network and they're doing good because they are in partnerships with tourism industries. Imagine the flow of transactions in that specific department as we are talking about millions here in that industry alone.

[DrBeer]

True, the solution there is more tailored to accepting cryptocurrency payments from the population, to pay for goods in an ordinary store. I haven’t found any information on how the Kinesis mechanisms are actually implemented, I can only guess.

Hi doctor
Do you know the inner mechanisms of your bank?
Does it prevent you from using it?

That said, I don't know what do you mean with Kinesis mechanisms actually. I can only tell you this is a question professionals don't care about.
Professionals care only about Kinesis' currencies being 100% backed up by gold and silver.
Audits take care of that.

Metals come from Kinesis' liquidity providers: they are precious metals wholesalers.

You can buy KAUs and KAGs - or fractions of them - on the kinesis exchange - using fiat or crypto -, or you can get them sent to you by your girlfriend or by selling something to another kinesis user.

With kinesis' virtual debit card you can pay at point of sale with your gold and silver: kinesis has financial partners - don't ask me for details or inner mechanisms - that while you stay at Starbucks convert on the fly 0,2 of the KAGs that you have in your kinesis account into 5 $.. €... Y... whatever fiat currency that Starbucks store needs.
Kinesis virtual debit card is accepted where Mastercard is accepted.
Starbucks' cashier gets paid.
You drink your cappuccino.
You don't need a bank account.


Kinesis Virtual Card - Everything you need to know

Hi Peter90 !

Yes, I know how the banking system works internally - I worked in the banking sector on the IT side
But if I were an ordinary person - I would not be interested in how a bank works, I would only care about the safety of my accounts, and the availability of a wide range of convenient services !

That is why I am interested in the "mechanics" and logic of the system. I worked with a project, which in some sense can be compared to what you are talking about. It is PundiX. They too offered an interesting solution, though without gold. They basically made a bridge between the fiat world and cryptocurrency. You have a PundiX wallet with cryptocurrencies, but you can pay in a regular store where you can pay with cryptocurrency. And the merchant can choose (depending on the legal framework):
- cryptocurrency
- fiat money. And here is the most interesting and tricky thing - you send a conventional bitcoin, it is dynamically sold through a layer (conventional exchange) that can work with local currency, and the seller is credited the amount in local currency. Although you paid in crypto.

In general - as implemented in kinesis, it may be interesting to "technical experts", and the user of the system see above, the main thing is that he can use a great service, which is kinesis ! For me kinesis has become a great REAL example of blockchain technology implementation in real life, with benefits for the ordinary consumer! Once again - I am sincerely glad that such a system has been realized and has a wide audience

[Peter90]

- how is this gold and silver actually secured?

Sure doc
Taken from their Trust and Security page


1) Counterparty risk protection

The holder of Kinesis currencies holds the full legal title of the underlying quantity of physical gold and silver.
At no point, will the bullion behind Kinesis digital currencies ever appear on the balance sheet of Kinesis or Allocated Bullion Exchange (ABX).
Resultantly, neither Kinesis nor ABX has any direct claim on the metals.


2) All gold and silver bullion held by Kinesis undergoes independent, third-party audits, four times a year

We employ the world-class independent audit and inspection specialist, Inspectorate International, a Bureau Veritas company, to conduct regular, independent, physical audits of all bullion underpinning Kinesis gold and silver-based digital currencies. The quantity of gold and silver held in our vaults is checked against the record of all KAU and KAG in circulation, stored on our blockchain.
Regular independent audits verify that every KAU and KAG within the Kinesis monetary system is based on an exact 1:1 allocated quantity of gold and silver bullion.
Additionally, independent auditors perform a series of assessments to ensure the weight and fineness of the bullion are as stated, and the quality of the storage is satisfactory.
The results of all of our audits are publicly available.


3) Immutable digital record

Each time new precious metals are introduced into the system a record is stored on the blockchain, maintaining an immutable and irrefutable ledger of all KAU (gold) and KAG (silver) within the system.
During our quarterly, independent audits, our blockchain enables auditors to ensure that the quantity of gold and silver held in our vaults corresponds exactly with the quantity of KAU and KAG in existence.


4) Secure and fully insured vault storage

Kinesis gold (KAU) and silver (KAG) are based 1:1 on physical gold and silver bullion, stored within fully insured, secure vaulting facilities in: Dubai, Hong Kong, Istanbul, Vaduz, London, New York, Singapore, Sydney, Toronto, Zurich, Panama City, Batam and Brisbane.
Furthermore, Kinesis is partnered with world-renowned vaulting providers: Loomis Zurich (Nasdaq OMX: LOOM); OZL Liechtenstein (Nasdaq OTCMKTS: OZMLF) and Brinks (Nasdaq NYSE: BCO).


5) Quality assurance

Under the ABX Quality Assurance Framework (QAF), all bullion has a verified audit trail and is stored in regularly audited, transparent holdings systems, with verification in place.

[DrBeer]

- how is this gold and silver actually secured?

Sure doc
Taken from their Trust and Security page


1) Counterparty risk protection

The holder of Kinesis currencies holds the full legal title of the underlying quantity of physical gold and silver.
At no point, will the bullion behind Kinesis digital currencies ever appear on the balance sheet of Kinesis or Allocated Bullion Exchange (ABX).
Resultantly, neither Kinesis nor ABX has any direct claim on the metals.


2) All gold and silver bullion held by Kinesis undergoes independent, third-party audits, four times a year

We employ the world-class independent audit and inspection specialist, Inspectorate International, a Bureau Veritas company, to conduct regular, independent, physical audits of all bullion underpinning Kinesis gold and silver-based digital currencies. The quantity of gold and silver held in our vaults is checked against the record of all KAU and KAG in circulation, stored on our blockchain.
Regular independent audits verify that every KAU and KAG within the Kinesis monetary system is based on an exact 1:1 allocated quantity of gold and silver bullion.
Additionally, independent auditors perform a series of assessments to ensure the weight and fineness of the bullion are as stated, and the quality of the storage is satisfactory.
The results of all of our audits are publicly available.


3) Immutable digital record

Each time new precious metals are introduced into the system a record is stored on the blockchain, maintaining an immutable and irrefutable ledger of all KAU (gold) and KAG (silver) within the system.
During our quarterly, independent audits, our blockchain enables auditors to ensure that the quantity of gold and silver held in our vaults corresponds exactly with the quantity of KAU and KAG in existence.


4) Secure and fully insured vault storage

Kinesis gold (KAU) and silver (KAG) are based 1:1 on physical gold and silver bullion, stored within fully insured, secure vaulting facilities in: Dubai, Hong Kong, Istanbul, Vaduz, London, New York, Singapore, Sydney, Toronto, Zurich, Panama City, Batam and Brisbane.
Furthermore, Kinesis is partnered with world-renowned vaulting providers: Loomis Zurich (Nasdaq OMX: LOOM); OZL Liechtenstein (Nasdaq OTCMKTS: OZMLF) and Brinks (Nasdaq NYSE: BCO).


5) Quality assurance

Under the ABX Quality Assurance Framework (QAF), all bullion has a verified audit trail and is stored in regularly audited, transparent holdings systems, with verification in place.

In this context, I answer the question in the title of the topic:
When cryptocurrency will be backed by real economic indicators, and other assets of the state - products of the economy, technology, highly liquid, provable, as well as will correspond to the financial model of the state, and will not contradict all aspects of the state structure, as well as will resist corruption and other schemes harmful to the economy - then cryptocurrencies can take the place of fiat, and help the economy.

You see - in the example you gave, people were able to build a scheme where everything is transparent, honest and really helps the citizens of the country to improve their situation. But... the nuance is that this is a highly limited society with a fairly simple scheme. The state and the economy of the state is not the economy of an individual citizen; unfortunately, everything is much more complicated there.

[Peter90]

Indonesia

world’s 4th most populous nation (and most populous muslim country)

Largest economy in Southeast Asia and 7th largest economy in the world by PPP GDP



so, I don't consider Indonesia as a highly limited society with a fairly simple scheme


Btw, credit to Indonesia's political leadership:
Indonesia has made enormous gains in poverty reduction, cutting the poverty rate by more than half since 1999, to under 10 percent in 2019

When cryptocurrency will be backed by real economic indicators, and other assets of the state - products of the economy, technology, highly liquid, provable, as well as will correspond to the financial model of the state, and will not contradict all aspects of the state structure, as well as will resist corruption and other schemes harmful to the economy - then cryptocurrencies can take the place of fiat, and help the economy.

You see - in the example you gave, people were able to build a scheme where everything is transparent, honest and really helps the citizens of the country to improve their situation. But... the nuance is that this is a highly limited society with a fairly simple scheme.

The state and the economy of the state is not the economy of an individual citizen; unfortunately, everything is much more complicated there.

Indonesia's gov is promoting Kinesis' gold-backed stablecoins because they think that platform can help the state and the economy of the state.
Obviously the Indo's gov thinks that K' gold-backed coins will correspond to the financial model of the state, will not contradict all aspects of the state structure, as well as will resist corruption and other schemes harmful to the economy

(Just a random note: in my view gold-backed cryptos' role is not to replace fiat)

[DrBeer]

When cryptocurrency will be backed by real economic indicators, and other assets of the state - products of the economy, technology, highly liquid, provable, as well as will correspond to the financial model of the state, and will not contradict all aspects of the state structure, as well as will resist corruption and other schemes harmful to the economy - then cryptocurrencies can take the place of fiat, and help the economy.

You see - in the example you gave, people were able to build a scheme where everything is transparent, honest and really helps the citizens of the country to improve their situation. But... the nuance is that this is a highly limited society with a fairly simple scheme.

The state and the economy of the state is not the economy of an individual citizen; unfortunately, everything is much more complicated there.

Indonesia's gov is promoting Kinesis' gold-backed stablecoins because they think that platform can help the state and the economy of the state.
Obviously the Indo's gov thinks that K' gold-backed coins will correspond to the financial model of the state, will not contradict all aspects of the state structure, as well as will resist corruption and other schemes harmful to the economy

(Just a random note: in my view gold-backed cryptos' role is not to replace fiat)

The solution is good and if indeed they managed to reduce poverty so significantly - I applaud them ! Bravo ! As far as I know - in such a timeframe and with such an indicator, there are actually no examples in the modern world !
Especially for a country with a huge population. Bravo again !

It is impossible to call the decision "extraordinary", but we must recognize that, unlike other countries, Indonesia has succeeded. To give an opportunity, in fact to provide fiat assets of the population with stable GOLD ! and at the same time with a convenient, and what is important - ACCESSIBLE, for all, method.

I agree with the last remark. It is rather a mechanism for stabilizing the economy and curbing inflationary processes.

[Peter90]

I think the possibility of the economic system of a poor country being elevated depends on the resources of the country. Even if Bitcoin or crypto currency can help in any little way, the country must have very great resources that can aid in generating good revenue for the country. For example, there are some countries that have some natural resources, such as crude oil and gold, as well as very fine soil and enough free land for commercial agriculturagricultural purpose and the cultivation of farm produce.

If there is no means by which citizens can earn money from jobs, businesses, or other legal means, then no one will have money to invest in crypto currency. People need to work before they can generate enough money to be able to serve their needs, and they will still have some to invest. If there is no job or any means by which citizens of a country can generate a good income forthemselves, that means people in such a country will likely not be financially stable and will not think of making any investment because their primary needs at that moment will be food, shelter, and clothing.

You are right on both points Dr. B
1) natural resources can be an important factor for the economy of a country;
2) people need money in order to invest in crypto.
But:

Re 1), natural resources are not enough in order to guarantee the economy of a country to flourish.
Good political leadership - at central, regional and local level -... infrastructure... a functioning monetary and financial system... are just as important as natural resources.
For ex. Zimbabwe and Argentina are two countries very rich in natural resources, but their population has suffered because of their national currency devaluation.

Money losing its purchasing power over time, that's a cause of poverty.
With money losing purchasing power, people are forced to take decisions - maybe risky decisions - in order to protect themselves from currency devaluation.

As long as the instability - in terms of purchasing power - of a currency impacts economic decisions of individuals and businesses, thus hindering economic development, cryptocurrencies can overcome the instability of a national currency through some mechanisms, e.g. - like BTC - making impossible to multiply arbitrarily the quantity of a currency in circulation.


Re 2) In this post I have shown how Indonesian migrant workers can spare 9 billions $ using Kinesis' stablecoins instead of traditional money transfer companies.

You say people need money in order to invest in crypto.
Well that's money Dr. B
Most important, that's not 9 billions $ for Indonesian organisations or public agencies: It's 9 billions $ going directly to ordinary people, i.e. the families of those migrant workers

Imagine the impact on the Indonesian economy of such amounts of additional capital at disposal of families and little businesses!

[Gormicsta]

In my view, the economy can be saved because cryptocurrency will facilitate transactions, reduce the possibility that we will lose money to scammers, and help us save time and energy in the case of a bank network breakdown or emergency.

[DrBeer]

In my view, the economy can be saved because cryptocurrency will facilitate transactions, reduce the possibility that we will lose money to scammers, and help us save time and energy in the case of a bank network breakdown or emergency.

Unfortunately this is where you are somewhat misguided. If your assumptions are based on classic cryptocurrencies - then I have to disappoint you - even buying 1 cent, you will pay a commission. And the smaller the payment, the higher in absolute value the commission.
Regarding security - here cryptocurrency as a decentralized solution looks much worse than fiat money - if you mistakenly send to a wallet number with an error - your money will disappear forever. If your seed phrase or wallet and its password are stolen - your money is irreversibly gone. Decentralization is a "two-way stick"

[Gurujebs]

In my view, the economy can be saved because cryptocurrency will facilitate transactions, reduce the possibility that we will lose money to scammers, and help us save time and energy in the case of a bank network breakdown or emergency.

I wish crypto can do this but this is not possible. Which coin can we use as an example for traditional transactions, do you know millions of transactions that need to be done in a day? I don't think it's even possible because the government need to watch most of the traditional transactions and because crypto has some anonymity on it layer, somethings will be difficult for government to approve and it will be hard for crypto to do what you mentioned.

Crypto gives opportunity to people that looks outside the traditional market and invest in them and research has shown that crypto always gives much profits than traditional markets. So people who doesn't have advantage in traditional market can make it in crypto market and become a what they want to be with patience.

[Bodhi2021]

Cryptocurrency can aid in elevating poor country's economy over time  because it's a modern technology aims at improving currency exchange in family of Finance

[Peter90]

In my view, the economy can be saved because a) cryptocurrency will facilitate transactions, b) reduce the possibility that we will lose money to scammers, and c) help us save time and energy in the case of a bank network breakdown or emergency.

a) yes
- through P2P we don't need the intermediation of a bank.
- blockchain transfers can be faster than bank transfers (particularly international).
- blockchain transfers can be cheaper than bank transfer fees.

b) I don't know

c) yes, as long as there is a card allowing the conversion of crypto to fiat on point of sale, bank account aren't necessary anymore, so in case of bank insolvencies, bank holidays etc... one is covered.
Also people can keep their money in their wallet, they don't need a bank for deposit and safekeeping.
Bank independency mean that your bank's problems are not your problem anymore

[DrBeer]

In my view, the economy can be saved because a) cryptocurrency will facilitate transactions, b) reduce the possibility that we will lose money to scammers, and c) help us save time and energy in the case of a bank network breakdown or emergency.

a) yes
- through P2P we don't need the intermediation of a bank.
- blockchain transfers can be faster than bank transfers (particularly international).
- blockchain transfers can be cheaper than bank transfer fees.

b) I don't know

c) yes, as long as there is a card allowing the conversion of crypto to fiat on point of sale, bank account aren't necessary anymore, so in case of bank insolvencies, bank holidays etc... one is covered.
Also people can keep their money in their wallet, they don't need a bank for deposit and safekeeping.
Bank independency mean that your bank's problems are not your problem anymore

Tell me - do your country/countries have really high fees for payments or money transfers from a card account ?
I can just say that in my country - most payments - no commission - from payment in stores, to transfers between cards. Except for transfers between different systems, there is a commission, but it is pennies. Speed of transfer - in my country also no problem - 30-60 seconds and the money is on your card or on the card of the recipient to whom you send.
Currency from other countries - I get on my current account WITHOUT any commissions. If they transfer 1000 euros to me, I get 1000 euros on my account.... I just don't understand some of the problems mentioned above, because of their absence in the banking system of my country.

[Peter90]

In my view, the economy can be saved because a) cryptocurrency will facilitate transactions, b) reduce the possibility that we will lose money to scammers, and c) help us save time and energy in the case of a bank network breakdown or emergency.

a) yes
- through P2P we don't need the intermediation of a bank.
- blockchain transfers can be faster than bank transfers (particularly international).
- blockchain transfers can be cheaper than bank transfer fees.

b) I don't know

c) yes, as long as there is a card allowing the conversion of crypto to fiat on point of sale, bank account aren't necessary anymore, so in case of bank insolvencies, bank holidays etc... one is covered.
Also people can keep their money in their wallet, they don't need a bank for deposit and safekeeping.
Bank independency mean that your bank's problems are not your problem anymore

Tell me - do your country/countries have really high fees for payments or money transfers from a card account ?
I can just say that in my country - most payments - no commission - from payment in stores, to transfers between cards. Except for transfers between different systems, there is a commission, but it is pennies. Speed of transfer - in my country also no problem - 30-60 seconds and the money is on your card or on the card of the recipient to whom you send.
Currency from other countries - I get on my current account WITHOUT any commissions. If they transfer 1000 euros to me, I get 1000 euros on my account.... I just don't understand some of the problems mentioned above, because of their absence in the banking system of my country.

so you are addressing a)

My country: intra-national bank transfers between different banks, 1 day
Crypto - depending on which one -: seconds/minutes

My country: inter-national bank transfers into another continent: more than 1 day,
plus: high transfer fees + bank speculating on currency exchange = very high total transfer costs

Crypto - depending on which one -: seconds/minutes
Costs - depending on which one -: minimal

There is a reason why international banks like JP Morgan are developing blockchain based solutions for funds transfers.

Btw, I forgot another advantage of cryptocurrencies vs. banks - thanks doc -, bank records can be forged, blockchain records - if I understand it correctly - can't.


The problem is that this world doesn't end with my country and your country, there are other countries too, for example countries like Indonesia.

Not everywhere in this world people can take the car and reach the next bank branch in 10 minutes.
Not everywhere in this world people can open and manage a bank account with the same easiness like you and me.
It's a big world.

In order to manage cryptos one needs only a smartphone.

In my country African migrants - like the Indonesian ones - were used to send money home through money transfer companies like MoneyGram or Western Union.
Maybe they can explain better the benefits of cryptocurrencies vs. traditional banking system.

[DrBeer]

Tell me - do your country/countries have really high fees for payments or money transfers from a card account ?
I can just say that in my country - most payments - no commission - from payment in stores, to transfers between cards. Except for transfers between different systems, there is a commission, but it is pennies. Speed of transfer - in my country also no problem - 30-60 seconds and the money is on your card or on the card of the recipient to whom you send.
Currency from other countries - I get on my current account WITHOUT any commissions. If they transfer 1000 euros to me, I get 1000 euros on my account.... I just don't understand some of the problems mentioned above, because of their absence in the banking system of my country.

so you are addressing a)

My country: intra-national bank transfers between different banks, 1 day
Crypto - depending on which one -: seconds/minutes

My country: inter-national bank transfers into another continent: more than 1 day,
plus: high transfer fees + bank speculating on currency exchange = very high total transfer costs

Crypto - depending on which one -: seconds/minutes
Costs - depending on which one -: minimal

There is a reason why international banks like JP Morgan are developing blockchain based solutions for funds transfers.

Btw, I forgot another advantage of cryptocurrencies vs. banks - thanks doc -, bank records can be forged, blockchain records - if I understand it correctly - can't.


The problem is that this world doesn't end with my country and your country, there are other countries too, for example countries like Indonesia.

Not everywhere in this world people can take the car and reach the next bank branch in 10 minutes.
Not everywhere in this world people can open and manage a bank account with the same easiness like you and me.
It's a big world.

In order to manage cryptos one needs only a smartphone.

In my country African migrants - like the Indonesian ones - were used to send money home through money transfer companies like MoneyGram or Western Union.
Maybe they can explain better the benefits of cryptocurrencies vs. traditional banking system.
[/quote]


Always interesting and enjoyable to read your replies - reasoned, meaningful, complete, thank you !

Yes, I absolutely agree that on the globe, almost 200 countries have different banking systems, as well as their services, fees, etc. I agree that in some countries, as you gave an example - inadequate conditions, terms, commissions of banking services. This is a fact. And when I communicate with my friends, for example in Germany, it is a shock to me that transferring money from card to card can take more than 10-30-60 seconds!
But if we talk about differences, we should not forget that the attitude to cryptocurrencies is also VERY DIFFERENT! From total prohibition and persecution, to quite loyal. Therefore, cryptocurrencies, at least today - can be an alternative to the banking, classical system, only in a limited number of countries.