FIRST IN 100% DECENTRALIZED SOCIAL MARKET MEDIA – GIANT BLOCKCHAIN CRYPTO PROJECT 

HVC is poised to triumph in the crypto economy.

Cryptocurrencies have many use cases. Some act as a store of value, others power blockchain to make it possible to create trustless digital contracts and permissionless decentralized applications. Some cryptocurrencies are pegged to fiat currency allowing for stable transfers of value, and some underpin protocols that offer decentralized data storage and video streaming. 

Each of these use cases requires a particular set of blockchain attributes and economic incentives. Many say that there is no single cryptocurrency project that can do it all; however, there is one that comes very close in a field that has been, for the most part, put in the too-hard basket by the majority. 

Who Dares Wins 

Markethive is a monolithic blockchain project currently operating as a social network, an entire inbound marketing platform with email, blogging, and digital media capabilities that broadcast to the vast internet. It’s a complete Market Network and the first of its kind. 

Markethive is predominantly a free system where users can access a platform that can cost more than $2,500 offered by other marketing platforms. There are, of course, upgrades that open up more tools and monetization opportunities, the first being the Entrepreneur One Loyalty Program, and coming soon is the Premium Upgrade. 

The many domains Markethive has and its autonomous cloud systems that ensure its sovereignty and longevity make it untouchable and immune from the tech giants’ rule and biased agender. But can still remotely infiltrate the social media platforms and reach the multitudes either locked in or looking for an alternative meritocratic medium.

In other words, wherever you go, Markethive is there, anywhere and everywhere, delivering its message via its community of entrepreneurs to a far-reaching audience. This next-generation social market media is poised in the wings, and when the time is right, it will emerge as a shining light to lift people up and bring financial sovereignty and hope in this gloomy and uncertain world.  

The video platform, conference rooms, the unique four specific news feeds currently in development, and many other projects and incentives add to the credibility and need for an ecosystem in the social media and digital marketing space. 

In 2018, Markethive released its coin, with the ticker symbol of MHV that enabled the distribution of the coin to the members within the Markethive system by way of infinity airdrops and subsequently a micropayment faucet. The coin is currently in the process of being labeled with a new name, HiveCoin, with the ticker symbol HVC. 

Now in the final stages of BETA, Markethive will officially launch with the release of its first wallet developed from scratch to service the community’s needs. This is Markethive’s internal web wallet, with the end goal of a wallet app accessible from your smartphone (external wallet) that includes built-in messaging, news feeds, e-commerce, conference rooms, etc., with the highest security measures. 

Meanwhile, the growing user base is accumulating their native coins, Hivecoin (HVC), in anticipation of the release when they transact using HVC within the Markethive system and externally.

What Sets The Markethive Coin (HVC) Apart?

The Markethive platform enables the users to earn HiveCoin cryptocurrency with everything they do and are paid for their loyalty. The Vault is an innovative concept that allows Markethive members to stake their coins, similar to a bank account. The more coins held in your vault, the higher the micropayments received, and then there’s the monthly interest paid to you based on the number of coins in your coin clip.

The company issues these micropayments, incentives, and rewards, not just the users, which is commonplace and the only form of payment in other crypto-based platforms. However, Markethive has a tipping protocol the people can utilize and substitutes the like button. 

It isn’t only a social media network or inbound marketing platform; it lends itself to the cottage industry concept allowing members to monetize the various initiatives Markethive is developing, starting the Banner Impressions Exchange. It’s also where entrepreneurs can facilitate and promote their personal businesses to a built-in audience as well as a springboard to the far regions of the internet. 

In Markethive’s all-encompassing ecosystem, the objective of the Markethive coin (HVC) is to be utilized as a form of payment rather than just selling it (pump and dump scenario). This gives a purpose and actual use case for HVC, equalizing the velocity and increasing coin value. 

Bitcoin has established itself as a store of value that affects the value of most other altcoins, albeit positively or negatively at any given time. However, if a coin or project’s use case and utility are credible, it can result in a parabolic shift, increasing in price, without riding on Bitcoin’s coattails. 

 

The Markethive Blockchain 

Markethive is currently situated on the Ethereum Blockchain while in BETA. However, Markethive aims to utilize a 3rd generation Blockchain developed by Cardano and Elrond. These Blockchain protocols have the advanced capabilities to produce the distributed database system Markethive requires. 

This ensures that all data that the extensive user base inherently creates in a social media environment is decentralized and safely integrated and stored on the blockchain, including all forms of content, videos, images, etc.

It is considered a  mammoth task for a blockchain and not conducive for an established social media platform like Facebook with its trillions upon trillions of data already in its system. Markethive conceived and initiated this blockchain protocol, making it easier to integrate. We just had to wait for the right technology to surface.  

Thanks to technology evolution, the Markethive social market network’s ability to build a massive database management blockchain can only be done on a 3rd generation blockchain platform like Cardano or Elrond. The Markethive blockchain will be forked off the 3rd generation blockchain, with HVC being a native token, a fungible multi-asset token. 

Native tokens represent value and act as an accounting unit, which can be used for payments and transactions and sent to an exchange address. Native means that these tokens are supported by the main chain’s accounting ledger without the need for additional smart contracts, as the ledger features built-in support to track ownership and transfer of more than one type of asset.

Ethereum blockchain issues tokens through a custom coded smart contract, which issues a non-native token. This token won't have all the advantages of Ethereum, and you have to pay for smart contract execution every time you move your token. This is why people complain about Ethereum fees being so high. It's not very efficient, leaving the door open for human error when coding smart contracts.

The low cost in transactional fees and the increased throughput into the thousands make the Cardano and Elrond blockchains a favorite in future generation blockchains. A sustainable, scalable financial operating system is becoming a reality. 

 

HiveCoin And ILP Smart Contracts – The Markethive Ecosystem

The Markethive  ILP smart contracts that the entrepreneurs have recognized as valuable and acquired will work seamlessly in the background on the Markethive blockchain forked off a 3rd generation blockchain. At the same time, the HiveCoin (HVC) will be used as a medium of exchange and will continually be circulating, earned, and accumulated by users within the Markethive economy.

It allows us to be completely decentralized financially with complete autonomy and protection of our intellectual property, ascertaining a viable and comprehensive ecosystem. This bodes exceptionally well for the Markethive ecosystem and benefits all participating in it. 

Essentially the Markethive ecosystem will have its own financial operating system within the new global financial operating system or future of internet money envisioned by the architects of the emerging technology, strides ahead of the initial technology of Bitcoin and Ethereum.  

Markethive – Staunch And Benevolent Vision

Markethive’s vision is a fully decentralized social network inbound marketing platform integrated and operated on a massively distributed database system, the internal giant blockchain, controlled by a smaller external blockchain Markethive’s Dapp wallet will utilize. 

This is a very advanced technology Markethive is integrating at which no other platform is doing or will attempt to do. It is a vast undertaking and needs to be done right so security is not compromised, on all levels, hence the methodical and time-consuming approach. Markethive is incomparable to any other media platform and, although touted it that couldn’t be done, is 90% done. 

It’s about looking after the community, the products and projects, the use, and the utility. Getting it right, being clever and evolutionary will pay huge dividends in the mid to long term for everyone in the ecosystem. Markethive is always focused on where we are going and why we are going there in the mission, giving economic sovereignty and identity to all, especially those that don’t have it. 

I know it’s hard to get your head around. Most people don’t comprehend what we have in our midst with Markethive but rest assured, this gigantic all-in-one platform current flying under the radar will be a life-changing positive force of how we work, earn, and socialize online. 

Come to our Sunday meetings at 10 am MST as we approach massive major upgrades and be the first to know about it. See and hear explanations, ask questions, and witness the ever-evolving technology and concepts of Markethive as we stay one step ahead of tyrannical technocrats.  The link to the meeting room is located in the Markethive Calendar. See ya there.

 

 

 

 

Inequality? Or Just A Fact Of Life?

How Do The Rich Get Even Richer? 

I think most of us have heard the saying, “the rich get richer, while the poor get poorer.” And the rich keep getting richer mainly because many are paying little in the way of taxes, if anything at all. How is this possible? What are the brazen loopholes and tricks that the 1% use to stay ahead and continue to gain wealth?   

Over the years, there has been much discussion, studies, and headlines around a billionaires tax and what it means for us non-billionaires. So why is there all this talk about billionaires and taxes in the US once again? 

Well, that's for two key reasons. Firstly, the policymakers in Washington are trying to go after this class of people with new tax proposals to help fund the American Families Plan.

The other fundamental reason it’s back in the spotlight is the amount of wealth accumulated over the last decade by specific individuals. And their wealth has been taxed at extraordinarily low rates. 

Image Source: Lisa Larson-Walker/ProPublica. 

Thanks to the Secret IRS files, the data was recently brought to light, essentially a leak of tax information that ProPublica covered in June. The leak contained vast troves of IRS data on the tax returns of thousands of the nation's wealthiest people covering more than 15 years. 

The Secret IRS Files

This report uncovered some of the most Illuminating stats of people like Mark Zuckerberg, Elon Musk, Jeff Bezos, Warren Buffett, etc. From 2014 to 2018, the 25 richest Americans increased their wealth by a collective $401 billion.

However, they only paid taxes of $13.6 billion during that period, equating to an effective rate of about 3.4%. Crazy, right? And if we were to drill down into some of the richest of this rich list, the numbers get even crazier. 

The illustration below shows the taxes paid on wealth growth for Buffett, Bezos, Bloomberg, and Musk. Buffett only paid an effective rate of 0.10%. Paying such low tax rates, it's no wonder that Buffett has become one of the biggest proponents of raising rates on the uber-wealthy like himself. 

Image Source: ProPublica

Now, you can see the effect of rates is 0.98%. 1.30% and 3.27% for Bezos, Bloomberg, and Musk, respectively. 

Another interesting graphic from this report is the one below.  It compares wealth growth and taxes paid by Bezos and the average American family. That noticeable dip on the household graph is that during the 2008 recession, many families lost their homes, where the bulk of their assets were. Bezos mostly owned stock, so he escaped any foreclosure. 

Image Source: ProPublica

The point here is not to shame these billionaires, as they have built successful companies, and capitalism rewards risk-takers. Moreover, it's also worth pointing out that all these folks have been paying what is legally owed. 

They've been doing what any rational person would be, using the tax code to their advantage. But this report highlights that the burden of proportional tax is borne much harder by those less well-off. And the reason for that is because of that same tax code.

 

The Enigmatic Codes

So let's take a closer look into these complex codes. Before we can delve into the specific tactics used by the rich, we have to understand precisely how most of them make their money. That's because the way that they make money will impact the type of taxes they'll pay. 

Most people will pay an income tax on their income which is mostly your primary source of income. In the case of most of society, this is their salary or wage. This income is taxed at different rates and goes up to 37%  at the US Federal level for the highest tax bracket. 

The examples used are from US taxes. Although the practice is broadly the same in other countries, This income tax is usually hard to avoid, as it's taxed when it's earned, and in many cases, taken out of your paycheck. 

However, when it comes to the uber-rich, they own assets that are taxed as a capital gain only when they appreciate. Notably, long-term capital gains tax for assets held for more than a year is much lower than income tax. 

For example, the top tax rate for capital gains in the US is 23.8%, which is much lower than the maximum rate on ordinary income. Based on the raw percentage, that would be the same rate of tax paid by someone who earns between $86k and $164k. So, you can now see why so many of these billionaire founders of companies choose to take token salaries.

Bezos earns a measly $80k, and Steve Jobs famously took a one-dollar salary. Mark Zuckerberg and Larry Ellison have followed suit. By doing this, they're avoiding having to pay any income taxes at all. They are taking stock and options on a stock that will only be taxed at the capital gains rate, over 13% lower than they would have paid, should they have opted to take income. 

But the critical point is this capital gains tax is only due to being paid once the gain is realized, in other words, sold. They are not obligated to make this sale in any way, shape, or form. They can hold on to these assets for a lifetime and never pay tax on them, and that is precisely what most of them do. 

So, how can these guys afford to live without realizing those gains? There’s a common misconception that wealthy people try to avoid debt, and it’s actually quite the opposite. They are among the most prolific users, and they do it in ingenious and efficient ways. One of these is borrowing against their assets and living off borrowed money. They're using their vast assets as collateral to take out debt. 

Buy Borrow Die Tactic

They’re doing this because they don't have to sell those assets and realize that gain, so they can avoid paying any taxes on the rapid appreciation in their wealth and still live like kings. This self-explanatory tactic is called, Buy, Borrow, Die. 

In a nutshell, they accumulate valuable assets that can be used as collateral assets such as stocks, bonds, real estate, art, etc. Then once they have these assets, they move on to the next step, looking to borrow cash using the assets as collateral. Then, of course, the inevitable happens, and they leave their fortune to their heirs. 

The first two steps may sound similar to a home equity line of credit, but it's much more favorable than that. We usually have pretty onerous terms when we apply to get credit and use our house as collateral. We have higher interest rates, and the amount of credit we get on our homes is limited. 

However, if you offer a bank highly liquid securities as collateral, you can get an absolute bargain. According to this piece in the Wall Street Journal, some of these lenders don't even need credit reports. Goldman Sachs’s private bank has even offered securities-based loans on anything from $75k to $25 million, with no personal financial statements, tax returns, or paper applications. 

In terms of interest rates, Merrill Lynch quotes 3.2% for those with assets of over $1 million and a low 0.87% for those with assets of over $100 million. Those are rates of interest and terms that we could only dream about. Then once they have this cash, they can do whatever they want with it. 

Yes, they have to pay interest, but it's trivial. Moreover, the value of their assets usually appreciates more than the interest rate. This is termed Positive Carry, where they end up better off than before. 

But the real kicker is that interest on loans is tax-deductible. These interest payments can be used to offset their already low tax bill. And, of course, they don't really ever have to pay this off. The banks are okay with rolling it over into perpetuity. 

You get to live your best life and still retain the upside on all those assets. You see, it benefits the banks to have such high-value collateral. It's easy to liquidate, unlike houses, and the bank itself can earn high returns on those assets. It’s the rehypothecation process, and most of the nearly 1000 wealthiest Americans use this tactic. 

For example, Elon Musk, and cable billionaire, John Malone have pledged $150 billion of their stock for loans. There is the risk that the stock collateral falls in price and that these billionaires will get a margin call. Still, these assets generally appreciate, especially with all that money printing going on at the FED. 

Image Source: Tenor. Funarg

Now, there's a lot of accumulated capital gains sitting out there, and by some estimates, it's as large as $5 trillion. This wealth has never been taxed and never will be taxed in some cases. That's because of the final step required of these billionaires, which is to die. 

When these billionaires with so much wealth eventually die, they leave that wealth to their heirs. They may have outstanding loans that these heirs then pay off; however, they keep the assets. These assets may incur an estate tax, but several strategies around gifting, donations, and charitable foundations lessen the burden, but that's irrelevant when considering that these heirs won't have to pay those accumulated unrealized capital gains. 

It is all thanks to something called the Step-Up in Basis. Essentially, when people die and their heirs inherit their fortune, the “cost” of the investment in the eyes of the IRS is the value of the asset that they received. That makes the asset free from any capital gains tax. If or when the asset appreciates again in value, the tax payable is only the difference, not the original price.

This is how some family dynasties have held onto their wealth for generations. They can pay legions of estate planners and accountants to structure the most sophisticated of vehicles that are beyond the reach of us mere mortals. 

 

The Ongoing Debate

Many progressive politicians looked upon these tax strategies for the elite rich with some indignation. They are now at the forefront of a debate around billionaire taxes in the US. A proposal by the Biden Administration plans to come after the unrealized gains of assets held by wealthy individuals to help fund the massive social spending and climate bill. 

Irrespective of what the bill will finally contain, it's clear that part of the effort to pay for it involves taxing wealthy individuals. For example, back in May, the initial target of the bill was the Capital Gains Tax rate. 

As they were aware of the fact that CGT was much lower than income taxes, the Democrats proposed increasing the top rate for CGT to 39.6%. If you include the Medicare surtax, it will be 43.4%, with some state taxes increasing those numbers. 

This proposal was a tough sell as it applied to anyone with over $1million in income, which is a much larger subset of people than just billionaires, so that was overturned. The Biden White House returned with the proposal to tax the unrealized capital gains of some of the wealthiest Americans, a much smaller subset of around a thousand people.  

That didn’t go down too well either, as it sounded like a wealth tax, and in fact, that’s how it was marketed to some progressives. Janet Yellen explained that it was “merely a capital gains tax on liquid assets held by extremely wealthy individual billionaires. I wouldn't call it a wealth tax.”  

 

The Terminology Not The Real Issue

Whatever they want to call it, it is clearly a tax designed to go after the wealthy for their unrealized gains, a tax that many legal Scholars said may even be unconstitutional. But it's not the terminology that was controversial; it’s the whole concept itself. Who would determine whether an asset was sufficiently liquid? Where do you draw the line?

And if you do draw the line, would this discriminate against some billionaires in favor of others? Would those billionaires who have most of their wealth in stock have to pay that unrealized gain tax, while others who own land don't?

What if these billionaires have to pay that tax in one year on a Gain, but the following year, there's a loss? Shouldn’t they be entitled to a tax refund on the back of that loss? Will the IRS pay that out? 

What if some of the most ultra-wealthy have to sell their holdings to pay these taxes? What impact could that have on the broader market? Assuming someone like Elon Musk or Jeff Bezos had to sell tens of billions worth of stock in the companies they own, would that not harm the stock market? The same stock market that millions of middle-class Americans are invested in with their 401ks. All of that, for a mere potential tax benefit of $250 billion. 

In response to the above questions, the answer lies in the evidence of how these wealth taxes have worked previously in Europe. In 1990, twelve European countries had a wealth tax, and however, there is only four today. One of the most recent casualties of the wealth tax was France which scrapped it in 2017.

This has provided a practical case study to analyze the real effects of these wealth taxes. In France’s case, since the 1980s, it has had an annual wealth tax on all those individuals who had over 1.3 million euros in assets. 

The first and most obvious impact of this wealth tax was that it drove the billionaires out. There was an exodus of wealthy people from France when it was in place, and because billionaires are the people who have the most means to move their tax domicile, they can easily move to more friendly regimes. By the prime minister's estimate, some 60,000 people with 35 billion euros worth of assets left between 2000 and 2016. 

Furthermore, the wealth tax was tough to enforce and costly. According to French Economist Eric Pichet, the cost of administering the tax was twice as much as was brought in. The country's fiscal budget was not only worse off than if it hadn't gone after this tax, but it now had even fewer billionaires to tax in the first place. 

Source: The Economic Consequences of the French Wealth Tax

Many other countries in Europe came to the same conclusion – the administrative burden just didn't make much sense. There were so many exemptions and loopholes that the rich could almost wholly avoid it. Then, of course, there was the impact this had on general Investments. 

Despite what most people tend to think about billionaires, their Investments do help to fuel innovation and economic growth. This was precisely the reason given by the Austrian government when it eliminated its tax, and it placed an “economic burden on Austrian Enterprises.” Switzerland also illustrates the potential drawbacks of a wealth tax in this article. 

Consequently,  Europe got a real-life practical example of the Laffer Curve. This well-known economic theory shows the decreasing marginal returns of taxes, and you get to a point where increasing taxes brings in even less revenue. 

Image Source: Fee.org.The Laffer Curve

 

Closing Thoughts

Now we’re faced with the pandemic that destroyed our economies and pushed millions into unemployment, but the rich got even richer during this time. Not only that, but they managed to accumulate most of that wealth without having to pay their fair share of tax on it. 

Naturally, this has led to a backlash from the populace. It feels just so inherently wrong that Warren Buffett pays 0.10% on his taxes, while his secretary pays over 37%. But to Warren's credit, he has been the one to point out this disparity. 

However, having said all of that, the alternatives don't sound too appealing either. Taxing unrealized gains is a recipe for potential disaster that could bog the IRS down for years. A proposal that the rich would fight tooth and nail and which could be proven to be unconstitutional. 

General wealth taxes have also been highly ineffective when implemented in European countries. Their impact has made governments and citizens poorer, while the rich simply migrate to other more favorable jurisdictions and enjoy their wealth there instead.

Some argue that we shouldn't be taxing success. If you disincentivize someone enough, then they will reduce their economic output. (That's the Laffer Curve.) I’m sure many would not be happy if the government wanted to tax all the gains on the cryptocurrency they’re hodling that has not been sold or has any intention to sell.  

I’m sure that many homeowners feel the same about their houses or apartments. Does this mean that the billionaires who own stock cannot feel similarly angered by the proposal? It's a complex and sensitive predicament for sure. 

The fact remains, though, as pointed out by the likes of Joseph Stiglitz and many others, that inequality is a blight on our society; tackling inequality would make life better for billions of people and supercharge the world economy yet, it's easier said than done. 

Perhaps instead of targeting the wealthy individuals at the top of the pyramid. It would be better and fairer to go after the corporations that have made them rich in the first place. The corporations with billion-dollar profits and tiny tax bills. The corporations that offshore their income and treat their workers appallingly in many cases. 

Individual enterprise should be allowed to flourish, but corporate greed is a much more insidious and damaging force in the world. So, maybe they should go after that instead. What are your thoughts? 

 

 

Resources: Coin Bureau, ProPublica

 

ELROND – Taking Blockchain And Crypto To The Next Level

A Technology Ecosystem For The New Internet

Cryptocurrencies have many use cases. Some act as a store of value, others power blockchains that make it possible to create trustless digital contracts and permissionless, decentralized applications. Some cryptocurrencies are pegged to Fiat currencies to allow for stable transfers of value, and a few even underpin protocols that offer decentralized data, storage, and video streaming. 

Each of these use cases requires a particular set of blockchain attributes and economic incentives. This is why it's often said that there is no single cryptocurrency project that can do it all. That may well be true, but there is one that comes close. 

 

What Is Elrond? 

Elrond has combined the scarcity of Bitcoin, the programmability of Ethereum, and the speed of next-generation cryptos, like Solana, to create a cryptocurrency network unlike any other. Elrond is a platform built for internet-scale and capable of processing thousands of transactions per second at $0.001 per transaction, and able to scale to hundreds of thousands with demand.

Elrond’s distinction is being a project with a soul. One that has united forces of an incredibly vibrant community of 190,000 people, spanning 18 languages and in almost 30 countries. Elrond aims to create the backbone for high bandwidth, transparent financial system, and extending universal access to anyone, anywhere.

Elrond’s egold (EGLD) native token has exploded in value over the last year and seems to be poised for more gains. The Blockchain project has been considered under the radar and received very little crypto media exposure until now. 

Image source: Elrond · Growth

Historically, Elrond was founded in 2017 by Benjamin Mincu, Lucien Mincu, and Lucien Todea. The Elrond white paper was released in November 2018, and the elrond main net went live in late July 2020. Like Cardano and Polkadot, Elrond is a competitor to Ethereum and seeks to be the foundation for the “new internet economy.”

 

Growth At All Costs

Unlike many smart contract cryptos, Elrond has a “growth at all costs” approach and has wasted no time onboarding individuals and institutions. It seems to be a perpetual process as Elrond has announced so many partnerships and integrations almost daily that it’s too many to mention here, so I’ll touch on some highlights. 

Coin98Analytics produced this graphic to demonstrate the enormity of the Elrond ecosystem.

 

The Ledger hardware wallet enabled support for egold in November 2020 and partnered with the Poly Network to make it possible to use Bitcoin, Ethereum, and dozens of other cryptocurrencies on Elrond as wrapped ESDT tokens.  

Elrond's documentation explains that they will be native to the Elrond chain, like e-gold. This means that they won't require a smart contract to issue and send like ERC 20 tokens on Ethereum. This protocol is very similar to Cardano’s Native assets, which have almost the same properties as ESDT Tokens. 

In December 2020, Elrond announced that it had partnered with Bitgo, which is one of the largest cryptocurrency Custodians. Also, Binance joined Elond as a staking provider. In October 2021, Elrond commenced collaboration with Ardana Stablecoin Hub on Cardano Blockchain to make egold (EGLD) one of the first native assets to collateralize stablecoins issued on the Cardano network. 

In the long-term, this collaboration will make it possible to bridge assets, such as the Cardano-native ADA token or other tokens issued on the two blockchains. This will allow their value to be leveraged in DeFi opportunities available on both networks.  

Beniamin Mincu, Elrond Network CEO says,

“This creative exploration of collateralizing a stable coin on one chain with the native coin of another can be a good starting point for interoperability between two progressive global ecosystems that are anchored in performance and innovation.”  

At the beginning of this year, Elrond began its initiative of onboarding the next billion people called 100 days of Hypergrowth. In addition to onboarding as many projects and users as possible, Elrond has launched its fully community-owned defy ecosystem, the Maiar DEX DeFi platform. The project describes itself as a technology ecosystem for the new internet. It includes fintech, decentralized finance, and the Internet of Things.

“By distributing Maiar DEX ownership to the next billion users, we lay the foundation for a truly global financial system that is accessible to everyone, everywhere,” said Beniamin Mincu, Elrond Network CEO.

 

What Makes Elrond Blockchain Different?

The Elrond blockchain uses Adaptive Stake Sharding to achieve incredible throughput features a robust consensus mechanism called Secured Proof of Stake and is smart contract compatible thanks to Arwen Virtual Machine.

In layman's terms, sharding involves breaking up a blockchain into multiple pieces called shards. This increases transaction speed because you can divide the transactions between different clusters of validator nodes running shards on the blockchain and process them in parallel. This is in contrast to regular blockchains, which require all the validators or miners to process one transaction at a time.

Sharding in the Elrond network was designed from the ground up to address the complexity of combining network sharding, transaction sharding, and state sharding. Elrond’s adaptive stake sharding takes this idea to the next level by dividing transactions, validators, and even the record of transactions between shards. The result is a cohesive protocol design, which not only achieves full sharding but attains the following goals as well:

1. Scalability without affecting availability requires increasing or decreasing the number of shards to only affect a negligibly small vicinity of nodes without causing downtimes or minimizing them while updating states.
2. Fast dispatching and instant traceability require that computing the destination shard of a transaction must be deterministic and trivial to calculate, eliminating the need for communication rounds.
3. Efficiency and adaptability require that the shards should be as balanced as possible at any given time.

A trivial step-by-step example of how it works is depicted in the animation below:

Image Source: Elrond Network

 

Secure Proof of Stake (SPoS) ensures that no single shard is corrupted by randomly selecting a set of 61 validators from each shard and choosing one to produce a block based on its stake and reputation. This unique setup makes it possible for Elrond to process over 5,000 transactions per second per shard.

Image Source: Elrond Network

 

The best part is that the Arwen Virtual Machine gives smart contract transactions about the same speed, which is quite rare. More importantly, the Arwen VM can operate between shards, a development hurdle many other sharded blockchains are struggling to overcome.

Elrond is a complete redesign of blockchain architecture to achieve global scalability and near-instant transaction speed. The underlying technology beyond the current state-of-the-art concept is better explained in the video below by our mate Guy from Coin Bureau. 

 

Wrapping It All Up

Elrond is a next-level project, and it managed to combine the best features of many leading cryptocurrencies in the space and even improve them. Elrond's adaptive state sharding is like the sharding Ethereum is working on in its 2.0 version, but better. Elrond’s secured Proof of Stake is like Harmony’s Effective Proof of Stake (EPoS) but better. Elrond’s Arwen Virtual Machine is like Cosmos’s Cosm Wasm Virtual Machine, but better. 

When you combine these three features, you get a blockchain that is theoretically capable of handling more transactions per second than every other smart contract Blockchain combined. Elrond’s development has been exponential since its main net launched last year, and the growth is well deserved with much more on the horizon.

Furthermore, with its highly regarded team, Elrond started out with very few proclamations but a lot of activity and consistent growth over time. Contrary to what often happens today, where the launch of new projects is preceded by too much spam, sensational announcements on social networks, millionaire ICOs to raise substantial funds before any commencement of technical work on the project. 

Conversely, Elrond’s development started out quietly and self-assuredly, without asking anyone for money, at least initially, and then managed to gain investors’ trust with a whole series of steps and transformations that have evolved over the recent years.  

I believe we will be hearing a lot more about Elrond in the future as momentum builds and the need for this unparalleled technology becomes paramount to enable universal access and transcend the global economy. Elrond will be the wave that will lift all boats, taking this massive opportunity from a niche group of people and extending it to everyone in the world. Elrond is set to open the flood gates to create a new market.

Disclaimer:  This content is provided for informational purposes only and should not be relied upon as legal, business, investment, or tax advice. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors and may not under any circumstances be relied upon when deciding to invest.

 

 

 

MARKETHIVE UPDATES AND INTEGRATIONS

• Wallet in final draft mode

• Staking the Markethive Way

• Staying One Step Ahead 

Markethive started out as a sophisticated inbound marketing platform with a social media interface harvesting a robust collaborative culture. The entrepreneurs of the Markethive community have been using the free system and tools, promoting their businesses, and branding themselves across the internet with much success. 

With the advent of Blockchain technologies, Markethive set its path on an unprecedented journey of combining marketing, social media, digital broadcasting, e-commerce, gamification, etc., with cryptocurrency and decentralized Blockchain, distributed ledger technology. An ongoing project of massive proportion to deliver sovereignty, financial and self, and freedom of self-expression for all equitably, without bias. 

Markethive is a Vision from the Divine Source. Its mission is to fill the vacuum for the world's entrepreneurs – To empower and enrich the lives of every individual on every level across the globe. And the timing couldn’t be more perfect as we witness the soul-less destruction, tyranny, and surveillance of humanity gift wrapped and delivered to us as protection and for our own good. 

We are building an ecosystem, and there’s an absolute need and use for our coin (HVC) for everything we do; therefore, the potential for the open market to accept and embrace HiveCoin is very promising. Binance has done similar to what Markethive is doing. You can read about its rise to success as an ecosystem in this article.   https://markethive.com/group/marketingdept/blog/theriseofbinanceakintothemarkethivejourney

 

Wallet In Final Draft Mode

The Markethive web wallet is in the final draft mode and has various functionalities. It’s currently being built on Ethereum and is a mechanism that has been developed from scratch to service the needs of the community. This is Markethive’s internal wallet, with the end goal of a wallet app accessible from your smartphone (external wallet) that includes built-in messaging, news feeds, e-commerce, and security measures. 

Notably, active Entrepreneur One members will be the first phase of receiving the initial internal wallet upon release. It’s also important to note that the Entrepreneur One membership will no longer be available when the wallet launches. 

If you're considering taking advantage of all the benefits of the E1 upgrade for $100 monthly, which includes 1/10 of an ILP per year, go to the Membership Upgrade tab on your home page. Time is running out for this offer. Entrepreneur One Upgrade Explained.
 
Click here to learn more about the ILP (Incentivized Loan Program)

 

The Vault Has A New Home

Apart from documenting your reports, history, balances, and transfers of HVC, ETH, and other top altcoins, the Markethive wallet will display a live chart tracking the progress of the HVC value in real-time. Your HiveCoin balance total is shown, including the HVC you have staked, which means what you have deposited into the Vault and rewards you with additional HVC also displayed, thereby increasing your portfolio. 

The wallet also houses the Vault, which displays your Markethive Credits, subscriptions, and statements. The Vault, already in operation within the Markethive back office, is where you currently purchase Markethive Credits to pay for your subscriptions and various services; however, all the functions of the Vault are being upgraded and are accessible in the wallet, so it’s fundamentally a comprehensive economic center for the Hive.

The image below is a mock-up of the internal wallet to get an idea of what’s coming. 

 

What Are Markethive Credits?

A Markethive Credit is similar to a stable coin and is what generates all of the activity. One Markethive Credit = $1usd. These credits can be purchased through the Vault section of the wallet via Bitcoin, Ethereum, credit/debit card, or Paypal.  

You can pay for anything through the Vault such as the Banner Advertising Impressions, the Boost, Press Releases, and Sponsored Articles, gaming activities, and more as these services are implemented and introduced into the Markethive system.
Your Vault credit can be used to buy ILPs and future upgrades that will unlock extra services and incentives. These will follow once the wallet is launched. 

 

Better Than A Bank Account

Utilizing the Vault by having an ongoing threshold balance of Markethive Credits can be very lucrative. In other words, keeping a certain amount in the Vault above your monthly commitments (subscriptions) that are debited will award you compound interest paid in HVC of up to 5% and deposited directly into your CoinClip or Wallet. 

 

How Is the Interest Calculated?

Markethive releases coins into the market, in contrast to mining, via Airdrops, Bounties, Faucets, or Micropayments. Keeping a designated threshold of Markethive credits in the Vault is a form of staking. Staking generates interest, meaning you are paid additional HVC based on how many coins you hold and your other activities in Markethive.

Your Hive Rank score adds to your daily interest and can be a significant multiplier. Your CoinClip Score is determined by the spread of earned and current balance of HVC. Essentially, if you send coins out of the system, you lower your score for staking. If you bring coins into the system, you increase your score. 

ILPs count as coins, so buying ILPs can significantly increase your staking rewards. Upgrading your membership adds to your staking interest, and logging in every day is rewarded with an additional interest increase.

Transferring any chosen amount of HiveCoin, HVC, from your wallet into the Vault for a set time period (e.g., 30 days) will earn interest also. Essentially, you are staking those delegated coins, and the higher the balance of staked coins, the more interest earned. You can choose to keep it in the vault and accumulate or transfer it to your wallet for transactional purposes. 

 

Image source: Fool.com What Is Crypto Staking

What Is Staking In The World Of Crypto? 

Staking is a way to put your crypto to work and earn rewards on it. Staking in general crypto terms is how many of the cryptocurrency blockchain projects verify their transactions, allowing participants to earn rewards on their holdings. 

Staking simply stands for holding a delegated amount of cryptocurrency in your wallet for a fixed period and is integral to the Proof of Stake protocol and a way of supporting the blockchain of a cryptocurrency in which you’ve invested.

Staking is available with cryptocurrencies that use the proof-of-stake model to process payments. This is a more energy-efficient alternative to the proof-of-work model, which requires mining devices that use computing power to solve mathematical equations.

 

Staking – The Markethive Way

In the case of the Markethive, the Vault section of your wallet is where you can stake the coins you hold and is an easy and passive way to earn income. The rewards and interest that one gains from staking vary depending on the length of the time, the amount of HVC staked, and Hive Ranking. 

Because Markethive includes the Markethive Credit threshold balance in its staking protocol, it would be advantageous for you to keep it above the threshold along with an increasing Hive Rank enabling you to earn the maximum amount of interest. The Vault will notify you if you go below the threshold. 

By buying or earning HiveCoin and banking it in the Vault, you are essentially burning the coin, and it is a good thing, as explained in this article on how Markethive creates coin velocity. There are many ways to burn crypto coins which is advantageous to the wealth and health of the currency. 

In this instance, to burn the HiveCoin means pulling the coin out of the marketplace and staking or holding it in the Vault, so there’s less supply. The less supply, the greater the demand, which in turn increases the price of the coin. 

So there are three types of currency in Markethive. The HiveCoin, (HVC), the ILP Tokens, and the Markethive Credits. And remember that the Markethive Credits are always equivalent to $1usd of which you buy products and services. Keep in mind the more you use the vault, the higher the interest rate. The more you use the system, the higher the interest rate. 

The four facets scored for stake interest are Hive Rank, Coin Clip score, Loyalty Level, and Attendance Bonus as illustrated in the schematic below. Also, total interest is paid on both your vault balance and coin clip, or wallet balance, and the interest on this combined total is paid at the end of each month. 

 
CEO of Markethive, Thomas Prendergast, reported in a recent email to all in the Markethive community, 

“The wallet is in its final draft and design. How long this can take is still to be determined, but we already have a working wallet. When the interface is completed, then we will announce the wallet to be released. I don’t easily get excited, but this has me rather anxious as this is a major milestone of the many milestones we have reached.”

 

Meanwhile, Two New Systems Implemented 

Two other vital upgrades were accomplished this week: 

1. New registration and login system. 
2. Markethive support ticket portal. 

Markethive’s registration and login system is now owned and operated by Markethive. This is important as we now do not have to rely or depend upon 3rd parties such as Oneall Login API Services. 

You choose which email networks you would like to log in with, and the ability to log in with your domain email will be integrated. When logging in with the new system for the first time, enter your email or username. The system will recognize you have an account and send an email with a link to log in initially.

Once logged in, go to Login Networks in your settings and add the other networks displayed. There will be more added as we move forward. 

The social networks you have linked to your Markethive account are now for remote broadcasting only with the added advantage of the bounty program that is in the works. This means you will be rewarded for registering all your separate accounts through the Markethive platform and by subscribing and following the many Markethive social media accounts will qualify you for the Infinity Bounty Program. 

Markethive Ticket Support is now active. This system enhances personalization, keeps records and information on all tickets you generate. You can upload documents and prioritize your queries, streamlining the support process. 

Ticket support can be found at the far right on the blue bar on the Home page. Fine-tuning to this system is still required, so your feedback when using the ticket support will be much appreciated. 

Now, our Telegram Support Channel can become a support for the Markethive community. It will be a place where people can ask questions or seek assistance from other Markethive associates about anything they may need help with—Eg., uploading a video, etc. 

These two new implementations make Markethive a more independent force, galvanizing its armor protecting its community from the oligarchs’ control and oppressive antics where many have fallen victim. Markethive – A sanctuary from the world chaos and storm that is brewing with intensity. 

Come to our Sunday meetings at 10 am MST as we approach massive major upgrades and be the first to know about it. See and hear explanations, ask questions, and witness the ever-evolving technology and concepts of Markethive as we stay one step ahead of tyrannical technocrats.  The link to the meeting room is located in the Markethive Calendar. See ya there.

 

 

The Latest Report On CBDCs. A Dystopian Nightmare!

Cryptocurrencies’ continued adoption puts pressure on governments worldwide, and their reckless money printing has only added fuel to the fire. Now they're rushing to develop their Central Bank Digital Currencies before it's too late. In a previous article, I explained how the implementation of CBDCs could well be part of the great reset plan. Today, we’ll explore a recent report, revealing what features CBDCs will have, how governments plan on rolling them out, and what implications this could have for cryptocurrency. 

The report was composed by the Bank for International Settlements or BIS, which is fundamentally the bank for central banks. Its primary role is to facilitate coordination between central banks around the world. Over the last few years, the BIS has been devising a template for Central Bank Digital Currencies or CBDCs to be issued by their respective central banks. 

It must be stated that CBDCs are not cryptocurrencies by any standards. This is because CBDCs are centralized, permissioned, and offer very little or no privacy. They are entirely controlled by central banks and the governments to which they are accountable. Almost every Central Bank is working on a CBDC of its own, and seven of these central banks have been actively helping the BIS construct a CBDC template. 

These are the United States Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan, the Swiss National Bank, the Bank of Canada, and the Swedish Central Bank. In October 2020, these seven central banks and the BIS published the first of many reports about what and how CBDCs will look. The second CBDC report came out on September 30th, 2021, and contains even more details about what CBDCs will look like. 
It's divided into a three-part system;

1. Design and interoperability.pdf 
2. User needs and adoption.pdf 
3. Financial stability implications.pdf 

The authors provided a short six-page summary.pdf of their three-part CBDC report, and there are a few interesting points in the summary, which were seemingly not mentioned in the three sections of the report. 

The very first thing worth pointing out is the most important, and that's everything you read here applies to a public or retail CBDC. Now, this is a small but insanely significant detail because central banks, governments, and select institutions will use their own so-called wholesale CBDCs. A wholesale CBDC template is also being worked on, but one blatantly obvious thing is that regular folks like us will use a completely different digital currency to the people in power.  

Source: https://voxeu.org/article/central-bank-digital-currency-concepts-and-trends

Another concerning detail quoted at the end of the first page of the report summary is, “CBDCs would be likely to have wide-ranging impacts on public policy issues beyond a central bank's traditional remit.” 

This seems to imply that CBDCs will be used to enforce public policy mandates in all other areas of our lives, not just the financial aspect. 

Adding to that, as quoted in the screenshots below, “different users and needs would need to be defined and addressed in the system’s design.” 

And also, “Central banks might consider measures to influence or control CBDC adoption or use. This could include measures such as access criteria for permitted users,” …] 

This suggests that even retail CBDCs will have different rules for different groups of people. 

 

How Will CBDCs Be Designed? 

Much of how CBDCs will be designed has to do with the current financial intermediaries’ roles in such a system. For starters, the report states, “Central banks would be the only entities entitled to issue and redeem a CBDC and would bear the ultimate responsibility for the design of the CBDC system and the operation/oversight of the core Ledger.” 

Although central banks could theoretically cut out all existing financial intermediaries, the report stresses the importance of partnering with the private sector simply because the central bank can't possibly recreate, much less maintain the same infrastructure on its own. 

Below is an image of what the financial system looks like now in most countries, 

Source: Coin Bureau

And the image below is what a CBDC-based financial system would look like, according to the report. As you can see, the exact role each party plays here is not entirely clear. Still, the report notes that “if the central bank were to play a too operational or dominant a role in the ecosystem, private intermediary participation could be curtailed with a reduction in the diversity, innovation, and efficiency of the system.”

Given that private financial intermediaries will be a part of the picture, CBDCs will need to be interoperable internationally and domestically with their existing infrastructure. But, because this will likely cause many technical issues, the report recommends limiting the number of financial intermediaries that are allowed to operate. 

Also, the report states approval processes for new intermediaries or specific services and strong oversight could help mitigate technical issues. Meaning, the central bank will decide exactly which financial intermediaries are allowed to operate. 

 

Privacy Issues

When it comes to privacy, it states total anonymity is not possible as central banks would design CBDC Systems to meet anti-money laundering and combat the financing of terrorism requirements. 

Supposedly, our data will be safe because the central bank would have no commercial interest in end-user data and may be better placed than a commercial entity to commit to a minimal use of such data. 

The report also brings up the infamous travel rule put in place by the FATF, which means that every CBDC  transaction above a certain amount would be automatically tracked. 

 

Interoperability

The next part of the report briefly touches on the interoperability requirement for CBDCs and notes that the essential foundation of interoperability would be standardization, which would allow compatibility. 

The report’s last mention of interoperability is that a CBDC could be introduced with an explicit policy goal to catalyze a migration of national standards to an internationally promoted standard.  In other words, CBDC standards will be Global.

 

What Is Their Strategy For Global Acceptance?

The BIS and central banks know that the public may have trouble understanding or accepting their new monetary system, as mentioned below, but they have a plan on helping us “ordinary people” understand. 

It starts by outrightly admitting that the main reason why central banks are developing CBDCs is because of cryptocurrency adoption, stating that, “without continued innovation and competition to drive efficiency in a jurisdictions payment system, users may adopt other less safe instruments or currencies potentially leading to economic and consumer harm.” 

Ironically the report acknowledges that “technological innovation has been transforming the markets for retail payments at pace over recent years, with many new payment methods platforms and interfaces evolving to become faster, cheaper, and safer.” 

The logical conclusion of this kind of statement would be to allow this kind of payment innovation to continue, but apparently, the BIS and its banker cohorts believe this is better done differently. 

In this section of the report.pdf, it outlines the three ways by which CBDC adoption can be achieved by;

1. Fulfilling unmet user needs
2. Achieving network effects
3. Not requiring everyone to buy a new computer or phone

The report detailed how CBDCs exactly fulfill unmet user needs, and according to the BIS, the main selling points are security, low cost, high liquidity, programmability, and privacy. The report then starts to detail some more manipulative ways of achieving CBDC adoption. Namely, “incentivize consumer use of CBDC by dispersing, social benefits and transfers to individuals in CBDC” and “allowing consumers to pay their taxes in CBDC.” 

The report also provides a formula for various CBDC marketing campaigns targeting consumers with different pain points and needs. The funny thing is that one of these consumer archetypes in their category is a person “who does not want commercial banks to know his or her Identity or track his or her spending.” So naturally, the best solution to this issue is to give all that information directly to the central bank instead. 

 

What Are The Financial Stability Implications? 

The next section of the report is the financial stability implications of a CBCD and is where cryptocurrency is first acknowledged. The report notes that “stablecoins are only just starting to be developed, and will need to satisfy regulators that they are safe.” It would seem they missed the memo that stablecoins have been around for years and their users know which ones are safe and which ones are less safe. 

Then the report goes on and makes a ridiculous claim which is believed to be categorically false by the crypto savvy, “Unlike central banks, issuers of stablecoins are not bound by principles to design products that would coexist and interoperate with other forms of money or to promote ongoing innovation and efficiency.” 

In the crypto space, it’s common knowledge that stablecoins like USDT and USDC are available on more than a dozen different blockchains. It's in the BIS and central banks’ economic interest to be as interoperable as possible. Stablecoins are literally leagues ahead in interoperability terms of any CBDC. Even Visa has managed to test USDC as part of its payment infrastructure. 

Source: Techcrunch

Then, the truth is revealed when the report states, “Significant stablecoin adoption and the potential consequent fragmentation could result in excessive market power and the type of deposit disintermediation described as a risk for CBDC issuance.” 

This statement officially confirms that central banks see stablecoins as a risk to a central bank digital currency rollout. They're also hyper-aware that “the actual introduction of CBDCs could be some years away. In the interim, providers of private money and tokens are expected to continue developing and expanding their service offerings.” 

Because the central banks can't possibly catch up, they can only slow stablecoins down through regulation, and we see more news of crackdowns and reviews in recent headlines.  

Although the next part of the report is quite technical, many astute crypto enthusiasts’ interpretation is that central banks know that CBDCs can't compete with stablecoins because they can't offer the same yields on savings found in Defi. Yields are something that wealthy investors and institutional investors crave, and their influence could protect stablecoins from harsh regulations.  

The third section of the BIS report is where things get really interesting. Besides the fact that the projected adoption of CBDCs in G20 countries is between 4% and 12%, CBDCs could pose a considerable threat to the financial system via the banks. 

To understand why we must go back to when the stock market started crashing in the lead up to the Great Depression. People scrambled to withdraw all their money from their bank accounts, only to find that their banks didn't have their money because it had all been lent out. 

The bank runs caused the banking sector to collapse, which ultimately caused the Great Depression. The FDIC was created shortly afterward to ensure that banks always had enough cash on hand to ensure bank runs could never happen again. 

However, the BIS report highlights that a CBDC would be seen as a safe haven by many investors during a crisis. It is suggesting that investors would move their money out of the banking system and into the central bank. 

This would lead to a collapse of the banking system like it did a hundred years ago. Even if this collapse doesn't happen, the report admits that in a CBDC system, “a common theme is that maintaining bank profitability levels could be challenging.” 

The report gives a series of recommendations for how private banks could mitigate the loss and risk of potential collapse, and some consider them laughable, at the very least.

One aspect particularly stands out of all the report’s side effects a CBDC could have on the banking system. It states, “the introduction of a CBDC by the central bank could cause a reduction in commercial bank deposits, which would consequently translate into more expensive credit lines.”

In other words, CBDCs could make loans more expensive, which means it could become next to impossible for the average person to buy a house or other valuable assets. You could say it's almost like "you’ll own nothing, and you’ll be happy."

Notably, the same run on the bank risk exists with stablecoins, and you could argue that it's already begun as the $130+ billion in the stablecoin market cap came from bank balance sheets. 

After highlighting these risks and others, such as CBDCs potentially replacing government bonds, as the primary safe-haven asset among investors, the report explains how central banks can use their omnipotence to prevent these scenarios from playing out. 

Quote, “quantity-based safeguards would restrict the use of CBDC, through imposing hard limits on the transfers and or holdings of CBDC.”  It also states, “Limits could also be applied varyingly for different CBDC account holders.” Better yet, quote, “Such limits could be imposed on a permanent basis or on a transitional basis.” 

In other words, if the economy starts crashing and everyone runs to CBDCs to protect their wealth, the central bank will prevent them from doing that to prevent the crash, with no regard for investors. 

The BIS report concludes that a material shift from bank deposits to CBDC if the holdings of CBDCs by individual users were left unconstrained, could have a non-trivial long-term impact on bank lending and intermediation. 

 

What Is The Likely Outcome?

As terrifying as this BIS report is, it reveals just how difficult it will be to roll out such a dystopian system and arguably next to impossible. This is simply because there's no way to introduce a CBDC without eating into the bottom line of the banks and financial intermediaries. They would sooner side with crypto than let that happen, and some would suggest that this could be the outcome of introducing a CBDC.

There is also no way on God’s earth that the average person would adopt a CBDC without being forced, and the moment someone starts to use force to mandate something and claim it is good, it becomes clear that it's not. This begs the question of why central banks would go through all this trouble to create what is likely to be an abysmal payment method. 

Many would argue the answer is that this isn't their actual goal, and the evidence is easily found in the design of what they're building. CBDCs are nothing short of a tool for total control, and every single stated benefit and feature only exists to entice people into this totalitarian scheme.

As the report admitted, there are already numerous financial technologies that can do everything CBDCs can and more. Most of these financial technologies have come from cryptocurrency, and it’s odd that the report didn't mention any cryptocurrencies besides stablecoins. 

It also didn't mention the word blockchain either. It may be that the BIS doesn't want to draw any more attention to cryptocurrencies. What is the likelihood of any of the governments that read the report getting the idea of adopting Bitcoin as El Salvador did? Other countries are likely to follow suit, especially since it's much easier to plug into a financial system that's been proven to be secure and reliable rather than build a new one from the ground up. 

It looks like they won't have any other choice either because fiat currencies are losing value and credibility by the minute. However, this might actually be what the central banks want though. After all, the only way they could possibly convince anyone to adopt their CBDCs is if their existing fiat currencies are worthless. Even then, the crash could happen much quicker than they anticipated, and their CBDCs are far from being ready to fill that void. 

It may sound a little crazy, but we could end up with a scenario where the only kind of money left with any value is select cryptocurrencies and China's digital yuan (e-CNY). I think we all know which one the global majority would choose.

So while politicians and bankers “fluff around,” trying to implement their new financial system, we can do our part in adopting credible cryptocurrencies and emerging projects that tower over any technology the central banks come up with, especially in the case of decentralization autonomy and privacy. Systems that will have a positive impact on “We the people” not only financially, but also socially and professionally. 

 

A special thank you for valuable insights and research performed by Coin Bureau

Also published on Before It’s News – https://beforeitsnews.com/economy/2021/10/the-latest-report-on-cbdcs-a-dystopian-nightmare-3044898.html

 

Evergrande – A Potential Global Contagion. Will It Impact Crypto?

There have been major headlines, and a lot of talk and speculation concerning the Chinese developer, the Evergrande Group, and its demise and potential collapse it is facing. Could we be on the verge of another Lehman Brothers moment? An uncontrolled default of the Evergrande group could lead to a credit crunch, implicating all financial markets globally. But what about crypto?

 

Chinese Property Bubble

Before we discuss Evergrande, let’s look at the Chinese property bubble. It has, after all, provided the ingredients for this company to become so systemic. To say that the Chinese property market is in a bubble is an understatement. It's been so hot recently that off-plan units sell out online in minutes. 

For example, in March of last year, 288 apartments in a new Shenzhen development sold out in less than eight minutes. A few days later, an additional four hundred units sold out in record time. 

People are legitimately willing to fork out upwards of $100,000 immediately just to have the opportunity to buy a property 2 to 3 years from now. One of the main reasons the Chinese property market has been exploding at such a pace is that property is seen as one of the primary forms of investment in the country. 

When compared to their western counterparts, Chinese citizens own more property than they own bonds or stock. In China, at least 96% of urban households own at least one home. In the US, however, that number is closer to 65%. 

Furthermore, statistics reveal that $900 billion a year was invested into the property market at the peak of the US property boom. Currently, there is $1.4 trillion being invested in Chinese property. However, in recent years, buying property in China has been more about speculation than investing. 

They've been investing in property mainly because of their belief that prices will always go up. This belief, of course, is a self-fulfilling prophecy that we've seen on many occasions, including back in the 2008 subprime mortgage crisis. 

The graph below shows the annual residential real estate investment in China versus in the US. As indicated, the Chinese bubble has grown and grown. Even the 2008 financial crisis did nothing to that demand, and it kept on climbing throughout. 

However, much like 2008, this Chinese property bubble is not being built on savings. There is a lot of debt being taken out to buy these homes. For example, from 2010 to 2019, China accounted for 57% of the total increase in household borrowing compared to the US, which only accounted for 19%. 

It's not only the fact that this debt-fueled property bubble is systemically dangerous, but it's also leading to massive increases in the cost of living. Interestingly, in an upmarket area of Tianjin with a population of about 15 million, apartments cost around $836 per square foot, which is around the exact cost of the most expensive areas in other parts of the world, where the disposable income is seven times more than in Tianjin. 

This property boom has not gone unnoticed by the Chinese Communist Party, and it has become increasingly worried about this speculation.  General Secretary of the CCP, Xi Jinping, stated that “housing is for living in, not for speculation.” But they're in a catch-22 situation here; Given that so many people have their net worth tied up in housing, if the government were to try and deflate that bubble, it could lead to social unrest, and that is not something you’d want in a one-party state or anywhere else, for that matter. 

It's kind of a weird symbiosis where the CCP is happy to let the property market continue its growth provided it keeps the people happy, which has been the case. But eventually, as has happened with any number of asset bubbles in the past, when the ingredients that first drove the bubble and are no longer there, you have an epic crash. 

Who And What Is Evergrande?

Evergrande is one of the largest property developers in China. It was established in 1996 in the southern city of Guangzhou and has grown at a breakneck pace ever since.  Its founder, Hui Ka Yan, was at one point the richest man in China as he steered Evergrande through that Chinese property boom. In 2009 the company did an IPO on the Hong Kong Stock Exchange and raised almost $1 billion.

The firm owns more than 1,300 projects in over 280 cities across China to give you an idea of just how prominent this developer is. It's also a massive employer in the country. It employs over 200,000 people, and if we include all the people who work on its projects as contractors or subcontractors, that figure expands to over 3.8 million. 

But the company had ambitious goals and always wanted to expand beyond just property. It decided that it wanted to diversify into several different sectors and business units heavily. In some cases, these were as far from its core competency as they could be and included building electric cars, food and beverage businesses, bottled water, and dairy products. 

In 2010, the company bought a soccer team and also built a soccer school. It also had aspirations of building a 1.7 billion dollar soccer stadium in Guangzhou, where this team could play. Evergrande has recently laid out ambitions to build museums, theme parks, a health chain, and even into the financial services business by offering people wealth products. 

Image by The Civil Engineer

These lofty ideas to branch out from residential real estate would have been quite feasible if Evergrande could fully fund this expansion, but the sad reality is that the bulk of this expansion has come due to piles and piles of debt. $300 billion, to be exact. 

 

Building Purely On Debt

This debt burden has made Evergrande the most indebted property developer globally, and this sobering fact has come back to bite the company. In its rapid expansion over the last few years, Evergrande has taken on all forms of debt. These include the likes of bank loans, bonds, and international dollar bonds. 

However, one of the most common forms of debt that it's taken on is commercial paper. To clarify, this is shorter-term unsecured debt such as IOUs and other payables. It's an interest-bearing note that large banks or corporations typically issue to meet short-term financial obligations. 

Evergrande issued this commercial paper to all suppliers and contractors who worked on its projects. It was given as a substitute for cash and viewed as very secure. So secure that these very suppliers and subcontractors used the Evergrande commercial paper as a method to pay their suppliers, Etc. 

So, Evergrande commercial paper was essentially transformed into a quasi currency that people viewed as legitimate, despite being literally unsecured debt. This practice of using commercial paper to fund operations is not exclusive to Evergrande, but it has been one of the most prolific issuers. 

Then when it comes to more traditional forms of debt, Evergrande has taken out billions in bank loans from many Chinese Banks. Last year, Evergrande reported total bank and other borrowings of around $107.4 billion. This debt would have been all well and good if Evergrande had been able to pay it back. 

However, Evergrande’s bottom line has been deteriorating over the past couple of years. In 2020, Evergrande’s operating income was down 75% two years prior, plus there was also a fall in gross margin. The chart below shows how precipitous that fall in revenue has been, courtesy of Ming Zhou on Twitter. 

So what all that means is that Evergrande has even less below-the-line income to pay interest on its outstanding debt, let alone the principle. This realization has come to a head, and the company publicly admitted, a few months ago, that it may not be able to service all of its debt. Banks in China have started freezing Evergrande deposits to keep some collateral for paying back these loans. 

 

Default Is On The Cards

Of course, the international financial markets have taken notice. S&P has downgraded Evergrande’s dollar bonds from CCC to CC, with a negative outlook, and raised the chances of a debt restructuring or default. Fitch also downgraded Evergrande and its subsidiaries.

The markets have also reacted as bonds trading near par back in May are now trading at close to 30 cents on the dollar. This shows that these bond investors think that a default is on the cards. It's not just the debt market that's taking a hit, though. Evergrande shares have been on a sustained decline over the past few months, and they're already down 80% this year. 

Notably, Evergrande has not only issued a great deal of commercial paper to its suppliers and lenders. It has also taken money in deposits from close to 1.5 million people. These are people who put down these deposits hoping that they would one day buy some property from the developer.

This begs the question; if this company is so essential to the Chinese real estate sector and it's teetering on the brink, why doesn't the Chinese government bail it out? After all, they are a centrally planned economy, and they have the final say. 

Answer; the Chinese government has taken a hard line on leverage in the property development sector. A few years ago, it came out with directives to limit debt. These have become known as the Three Red Lines. 

These are cash on hand, the value of their assets, and equity in their businesses. Banks are required to limit real estate lending to 40% of their total under rules taking effect in January. The CCP would not want to create a moral hazard by bailing out Evergrande. If anything, it would more than likely want to make an example of the developer. 

So what all this means is that a default is not only likely but inevitable. In the case of the behemoth that Evergrande is, it may get ugly because of the contagion effect this could have across China's property sector and include its global credit markets. So there is a real risk that it won’t be contained within China; it will spread to the rest of the world, much like the 2008 credit crunch did. 

The counterparties that are at risk and Evergrande’s liabilities involve more than 128 banks and over 121 non-banking institutions, according to the letter Evergrande sent to the government late last year. Depending on how much exposure these counterparties have, there could come a situation in which they would themselves become too hot to touch. 

Let's also not forget about how much of that Evergrande commercial paper is out there. It's not well-tracked, and it has helped develop an entire quasi shadow banking system of suppliers, buyers, contractors, and counterparties. 

All of these folks have been using Evergrande paper as if it was as good as gold. There's no way a company as big as Evergrande could go bankrupt, right? 

Now, this fear of default could also spread to the other indebted property developers. Banks may become concerned about their ability to service their debts, and their commercial paper and bonds would also become toxic. 

Even if this is not the immediate result, you have a perverse situation where even the action of Evergrande trying to make good on its debt can precipitate a worse debt problem. This is because to raise funds, to settle its debt, it will have to sell assets. 

The overwhelming majority of Evergrande’s assets are property. If there is a fire sale of its properties, this could lead to a property crash and hurt everyone in the country. It would send all the property developers in the country into further, negative territory and damage the savings of all those Chinese who bet on the market. It creates a spiral where the collateral backing debt is falling in value, making everyone more indebted. 

 

Impact On International Markets – Global Contagion

This has a significant impact on international markets as there are a lot of holders of Evergrande’s debt offshore. These include asset managers, international bond funds, and other corporations. 

For example, a large bond fund called Ashmore Group, based in London, has over 400 million dollars worth of Evergrande bonds. Other asset managers that have exposure include BlackRock Inc., UBS Group,  and HSBC Holdings.  Both BlackRock and HSBC boosted their Holdings of Evergrande debt as recently as August. 

And these are only their International bonds. When it comes to the mountains of Evergrande commercial paper, no one really knows. This is a lot harder to track as these assets are not standardized securities like bonds. 

Moreover, what happens if the contagion spreads to the rest of the Chinese developers, banks, and companies? What happens if their debt cannot be paid? The risk of contagion in the Chinese property and credit markets could wreck the portfolios of these managers that hold their debt. And that's just the debt side. 

We should not forget that these Chinese developers, banks, and companies have publicly traded equity on International markets such as the Hang Seng or Shanghai stock exchanges. If these were to tank as they did with Evergrande, it could further hurt international portfolios. 

 

Impact On The Cryptocurrency Market

What about the crypto market? In times of market stress, we’ve learned that Bitcoin and other cryptocurrencies assets have a pretty strong correlation with equity markets and are not entirely isolated from what’s happening on the global macro front. We saw this play out last year during the covid-inspired crash. We also saw it happen numerous times over the past few months with concerns about potential Fed tampering.

It could be that large fund asset managers and institutions based out in Asia may have to sell their Bitcoin holdings to cover the losses that they hold in shares or debt of these developers. Or maybe the situation in which retail investors in China have to sell their crypto holdings to settle their debt. Even though the Chinese government has been trying to prevent its citizens from holding crypto, it hasn't fully succeeded as Bitcoin traders in China still wield enormous influence. 

Bitcoin is an asset that faces the same risks in the short term from global financial contagion. 

Image and related Article by Cointelegraph.com

However, one other factor unique to the crypto markets and has been drawn into the Evergrande saga is Tether. There are concerns that the controversial stable coin issuer, Tether, could be quite exposed to Evergrande. These suspicions have arisen due to a disclosure that the company hoped would temper the FUD and not add to it. 

That disclosure is the attestation report.pdf issued by Moore Cayman a few months ago, giving a breakdown of the reserves backing up USDT, stating 50% of its reserves were held in commercial paper and certificates of deposit. That equates to $30 billion.

One question comes to mind:  Why does Tether have so much commercial paper? Well, there are two possible reasons. One is that it likes to earn interest on this commercial paper, and the other is that there are very few banks that would be willing to hold $30 billion in cash and cash equivalents or Tether. 

The question that many have been asking is whether Tether has any Evergrande commercial paper. Ever since this speculation has come to light, Tether has emphatically denied holding any Evergrande commercial paper. 

If it were the case, it would mean that the reserves are not fully backed because all that commercial paper would be worth a lot less. Even if it were only a tiny component of the commercial paper, the knowledge that USDT is not 100% backed by assets would create a great deal of uncertainty around holding USDT. 

So, why does this matter for the crypto markets? Well, because Tether remains one of the essential components for Bitcoin liquidity. On many offshore exchanges, it is the stable coin pairing of choice as indicated on Coinmarketcap. USDT trading volume stands at $56 billion per day. It is 28X more than the next-in-line USDC shown on the chart below. 

Image CoinMarketCap

So, quite simply, if there is a crisis of confidence in Tether, this trading volume could dry up. People would be reluctant to use Tether to trade, creating a systemic liquidity crisis in crypto. 

The goal of this article is not to cause FUD. It’s to create awareness of a risk that is not being adequately considered. Whether we see a full-blown financial crisis due to an Evergrande default is not clear as yet. It all depends on whether the Chinese government will come to its aid. A complete bailout by the Chinese government is the only thing that could help stave off the contagion. 

But on the other hand, if the CCP does assist, it creates a perverse incentive where developers will think that the rules don't apply to them when they binge on debt. This is precisely what happened on Wall Street in the wake of the financial crisis. So right now, the CCP is stuck between a rock and a hard place. 

Optimism Remains Prevalent In The Crypto Markets

Despite all of the short- to medium-term risks an Evergrande default poses, there is good reason to remain optimistic about crypto in the long run. Fundamentally, nothing has changed, and external factors are beyond our control. Even if there is a situation that snares Tether, it could help to serve the long-term stability of the crypto markets. 

Tether Inc. has been at the center of controversy and FUD for years and is reportedly not particularly transparent. Many crypto enthusiasts would love to move to a reality where this FUD is no longer in the picture. If ever there was a crisis in confidence of Tether, it could lead to a legion of long-term hodlers. People would be reluctant to convert to stable coins, including USDC. 

Either that or they would convert their BTC holdings into other cryptocurrencies, which benefits the ecosystem holistically. The future is still bright for many cryptocurrencies with purpose and utility. Ultimately, this could lead to a new financial operating system and be needed to sidestep any debt-based or quasi currency. 

 

 

Resources: Coin Bureau

Also published on Before It’s News
https://beforeitsnews.com/financial-markets/2021/10/evergrande-a-potential-global-contagion-will-it-impact-crypto-3385095.html

 

Who Will Triumph In These Dark Times? Markethive – An End Times Project

We live in uncertain times, prophesied as the end times and reflected in the Book Of Revelation, with catastrophic events impacting society on every level. With the global economy in free fall and increased surveillance, our privacy, freedom, autonomy, and in many cases, people’s livelihoods are confiscated by the reigning tech giants with no regard for humanity, freedom of expression, and basic human rights. 

Canceling the people brave enough to broadcast their message of corrupt officials, cover-ups, and expose those responsible for the global chaos we are all experiencing and have fallen victim to. It’s all part of a greater awakening and the fall of the cabal. 

Many scholars still see the Book Of Revelation as an enigma and difficult to understand fully. But, as pointed out by an individual not known for his extensive biblical knowledge, he understood it to mean “We win in the end.” Although simplified, there is an obvious truth to this interpretation.  

The number of people appalled at where things are headed who wish to preserve human sovereignty and freedom grows daily. Our opportunity is here, right now, to make a difference together. While the cliques are still on the offensive, busy upholding their biased agenda and wielding their so-called power to oppress humanity’s self-expression, we can elude this evil and determine our future on our terms. 

Markethive – An End Times Project

So we don’t just wait in the hope of salvation. We get on with doing whatever is in our power to do. Markethive is an end-times project delivered to thwart those who hope to profit to an obscene degree from an end of human health and freedom. Built by the people, for the people, Markethive is a robust entrepreneurial community of those who wish to preserve a human society dedicated to spiritual and political freedom and prosperity for future generations.

As with many newly created systems, awareness, understanding, and mainstream adoption take time; however, the recent worldly events have certainly accelerated things on two fronts; 

1. The decentralized concept of Blockchain and Cryptocurrencies as a new monetary system.

2. The emergence of sovereign platforms like Markethive with independent cloud systems to circumvent      the repressive, unconscionable conduct of the social media elite and service provider giants, including      AWS, Apple, and Aweber. 

A growing number of people, aspiring entrepreneurs, and critical thinkers will not kowtow to the insidious actions of big tech and are part of what is causing real frustration and risk for the elite as they try to suppress and control the global populace. 

However, I believe their efforts will be thwarted, likened to the Hydra, the Greek legend of a giant multi-headed immortal monster. When one head is severed, two more will grow. 

A Flourishing Economy

At Markethive, known as the ecosystem for entrepreneurs, we are building a flourishing economy. A world within a chaotic world but not of that world, upholding self-sovereignty, freedom of speech, and liberty.

Some platforms, specific to microblogging, video, or digital media, are rising in opposition to what big tech is doing to silence the people and cover up the blatant lies and nefarious activities. However, to be completely untouchable by the tech giants, platforms need to cut all ties by owning and installing their technology, giving them the sovereignty to broadcast and be of altruistic service to the world. 

Users from all walks of life, influencers, marketers, business owners are looking for and migrating to more sovereign platforms to exercise their right to free speech along with the opportunity to improve their livelihood. Markethive is leading the way and can deliver a complete system where you will no longer have to rely on the monopolies for its services of any kind on any level.  

A Divine Vision

Markethive owns and operates on its independent servers and is underpinned by Blockchain with its Hivecoin (HVC). Due to Markethive’s infrastructure, the Markethive Consumer Coin will be one of the few cryptocurrencies that will remain strong, gathering momentum in this time of transition to a digital economy. 

Markethive is a divine vision that will thrive in these end times, driven by the community, with the velocity effect required to maximize the economy. Supply and demand within the Markethive ecosystem will result in financial sovereignty, autonomy, privacy, and peace. 

As we move forward with a digital economy, Bitcoin and purposeful altcoins will become the foundation of business. Markethive is a decentralized social media, marketing, and broadcasting network, with the imminent release of its exchange and wallet. That makes it an all-encompassing platform that is essential in these dark times of division and derision and critical for humanity’s financial health and well-being.

 

Thomas Prendergast, CEO and Founder of Markethive – and the architect of the blockchain-driven Social Market Network, has dedicated many years to building this “Ark” in anticipation of these end times. 

Giving back the autonomy and freedom of expression desperately needed to communicate and conduct any business online. With a holistic approach, Markethive enables every individual to realize their potential regardless of what is happening out there. Thomas says, 

“Amid this crisis, it’s business as usual and then some for Markethive, providing financial inclusion for all is our primary objective. The answer is Markethive’s blockchain technologies and integrated entrepreneurial ecosystem where people have privacy, autonomy, and sovereignty. They earn an income with our native crypto coin (HVC) in many different ways daily, including becoming a shareholder via the ILP, the added staking advantage of the Vault, and also profiting from the many cottage industries within the Markethive ecosystem. Essentially, it’s the community that owns Markethive and not the hierarchy". 

Transcending The Evil In The World

With God’s help, we will withstand the technocracy that is trying to enslave humanity. There is something greater than these tech giants and elitists that even they cannot control. Every thinking individual recognizes that something more prominent is taking place. 

We are spiritual beings experiencing physical reality, with many feeling trapped in the oligarchs’ agenda. A dictatorship can only exist with followers. We don’t need to go along with the obedient herd; we do have another choice. Above all, know that we can overcome all negative worldly emotions and circumstances from a spiritual foundation. 

Markethive is already in every country in the world to lift hundreds of millions of people into an environment of freedom of speech and information, financial sovereignty, and well-being. We are responsible for creating a massive army for the Lord and a foundation for the last days; The final harvest.  

 

 

The Biggest Ponzi Of All Time 

Impacting All Of Humanity

Many of us have been victims of crypto scams, and yes, they are out there in droves. We’ve all heard the comment, “Bitcoin is a Ponzi scheme.” But who is saying this about the cryptocurrency that has earned the right to be the store of value for all cryptos and labeled “Digital Gold”? 

The statement is a falsehood that’s knowingly propagated by bankers and unknowingly spread by ignorant, no coiners. It’s being used as a ruse to deflect from one of the biggest and longest-running Ponzi schemes of all time. A system so fundamentally flawed that it’s flabbergasting to see that it exists to this day.  

I am, of course, talking about the fiat money system—a proverbial house of cards, where billions of sheeple seek cover. With the assistance and research conducted by Coin Bureau, we look at the matrix equivalent of the monetary red pill, and by the end of this article, you will never be able to look at that money in your wallet in the same way again.

The Inception Of Paper Money

Let’s start with a bit of a refresher course on Fiat money. Most people associate the cash in their pockets and bank accounts as Fiat money. But in reality, the concept is much broader than that. 

Money is a concept that has been around for hundreds of years. Paper money first started being issued in 1697 by the Bank of England. US dollar started hitting the scene in 1792 per the coinage act.  Before this, coins made from gold and silver were used as the monetary medium in society.

However, with the introduction of paper money, these Banks could issue bills that were easier to denominate, store and spend. They were a lot easier to be used as money. However, you always had one key thing with this centrally issued money; some reserves backed it. This was termed the convertibility of money.

You could theoretically exchange those dollars in your hand for a certain quantity of some precious metal. In most cases, this was gold. This is where the term the gold standard originated. It created a certain level of confidence among those that held it that there was particular value behind it. The money in your hands and that which was in your bank had intrinsic value. Not only that, but strict adherence to the gold standard would limit the potential for damaging inflation. 

Of course, the gold standard’s most significant advantages can be seen by some as disadvantages. This is because the money supply in the system is naturally limited by the amount of gold kept in reserves. Strict adherence to the standard can even lead to deflation which is also damaging to the economy. 

Owning Gold Deemed Illegal

The convertibility of gold was a pressing issue for FDR during the Great Depression as it limited the money supply. He issued an executive order which made owning gold illegal and required everyone to convert it into US dollars. 

He did this to set a government price for that gold that was quite inflated. This would then allow the Federal Reserve to inflate its balance sheet by over 70%. So yes, the gold standard was not ideal for these governments, but at least it kept them in check. It marked a certain degree of confidence in the value of money and, when applied correctly, could prevent hyperinflation. 

The Bretton Woods Agreement

So confident were the countries in the virtues of the gold standard that in 1944, forty-four countries signed on to what was called the Bretton Woods Agreement. Within the Bretton Woods system, all national currencies were valued in relation to the US dollar. This, therefore, made the US dollar the dominant reserve currency. The dollar, in turn, was convertible to gold at a fixed rate of $35 per ounce. So you can think of it as a quasi-gold standard still backed by gold, but indirectly. 

The Bretton Woods system had a pretty decent run until 1971. It was then that Richard Nixon committed his first impeachable offense. Nixon's termination of the convertibility of USD into gold should have sunk him before Watergate. This is because Nixon set the wheels in motion for the current Fiat money system that we know today, a glorified confidence game backed by nothing. So what exactly happened? 

Fiat, No Gold, No Intrinsic Value

In August of 1971, Nixon said that the US would “suspend temporarily the convertibility of the dollar into gold or other reserve assets, except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.” 

Well, it turns out that that temporary suspension became permanent, and it ended any sort of Illusion that the US dollar and, by extension, 43 other currencies were backed by gold. In fact, the US dollar was backed by nothing.

From then on, money only had value because the Federal Reserve and the US government said it did. It was a piece of paper that people agreed between themselves had a specific value. It's also no coincidence that after we saw this abandonment of a form of monetary tether, we had an inflation of the monetary base. This then led to the periods of high inflation in the late 1970s and early ‘80s. 

Fiat Money Doesn’t Exist

So now we know that Fiat money does not have any intrinsic value and that it's all one big confidence game where we the people have to believe the government's promises. But the really shocking thing about this, though, is that most of the money in circulation does not actually exist. 

So what do I mean by that? To understand it better, we have to look at how money makes its way through the system. The primary method of which is Fractional Reserve Banking. This calls for a bit of an overview.

What if I told you that the money you think you have in the bank is not actually there. You see, this money has been lent out to many of the bank's other customers. And banks are allowed to do this because of the fractional reserve system. 

You give your money to the bank for safekeeping, and they turn around and use it for their own purposes. They only have to keep a certain amount of deposits related to the loans they’ve issued out. This is termed rehypothecation, and it's not only restricted to banks. It's also used by other Financial entities, such as Brokers, etc. 

In this situation, the banks are hoping that only a tiny proportion of their users will withdraw. Hence, they keep a small buffer of deposits in this case. Now, I know what you're thinking. This is incredibly risky. What happens if all the depositors come and request their money all at once? Well, then you get what is termed a bank run. And it is precisely as the name would suggest. 

When all people rush to withdraw their funds at once, the bank has a liquidity crunch, and they cannot pay out the depositors. Rumors mainly cause bank runs. If people hear that a particular bank is facing a liquidity crunch, they will rush to withdraw their funds which, of course, feeds the rumor. It's pretty scary. A bank can have no underlying issues, but the mere talk that it’s short on funds could cause everyone to withdraw simultaneously, making it a self-fulfilling prophecy. 

All Banks Are Susceptible To Bank Runs

What is disturbing about bank runs is that every single bank is susceptible. It's not only those short of liquidity but also those in a relatively strong position. All you need is one picture of a line outside a bank, and it drives the panic. Bank runs were typical during the Great Depression. People heard about one bank facing a run, so they naturally tried to rush to their bank to withdraw their funds, thereby leading to panic further.

Here's a fun fact; The bank runs prompted the formation of the Federal Deposit Insurance Corporation or FDIC. 

The federal government believed that if they guaranteed a certain amount of deposits, people would feel comfortable. While this brought stability for run-of-the-mill bank runs, you need to understand that FDIC only ensures up to 250,000 dollars in deposits. Those with balances above are still at risk of a loss. 

Many may argue that 2008 was a high-tech version of a bank-run. Financial institutions started withdrawing their deposits at highly leveraged investment banks, which led to a massive liquidity crunch. Furthermore, bank runs still take place quite regularly in other countries around the world. 

In 2008 the UK had a retail bank run on Northern Rock. Then there was the Eurozone crisis in the 2010s where bank runs plagued countries like Greece and Cyprus, so much so that the government had to limit the number of Euros that people could withdraw from the ATMs – only 60 Euros per day. 

Imagine that; you've placed your life savings in a bank account, and now you're looking to withdraw it, and the bank limits you to a measly 60 Euros a day. However, it's not like the government had a choice, as there was no more liquidity in the system. The European Central Bank decided not to further increase its Emergency Liquidity Assistance for Greek banks; they had to introduce capital control.

The Greek government was forced to immediately close Greek banks for almost 20 days, implementing controls on bank transfers from Greek banks to foreign banks and limits on cash withdrawals, to avoid an uncontrolled bank run and a complete collapse of the Greek banking system. All of this happened because the banks were built on a precarious system of fractional reserves. That’s one aspect, but it’s not the worst thing about fractional reserve banking. 

Fractional Reserve Banking

Fractional reserve banking plays a fundamental role in the multiplication of money. This reserve ratio is not determined by the Banks but by the Fed or equivalent Central Bank. It's the minimum amount of deposits they must hold in liquid securities to meet their obligations. This stock of money kept in near-term deposits is generally referred to as the M1 money supply. 

But here is where things get interesting. The M1 money supply is the money that includes coins and notes in circulation, along with other money equivalents that can easily be converted. Because the banks are allowed to lend out money to their customers, they can increase the broader money supply to many multiples of the actual money that's in the system. 

So, for example, if the reserve requirement is 5%, only 5% of the bank balance sheet should be held in this liquid money. The other 95% can be loaned out, so that means that the bank can lend out 20 times the amount of money that's kept on its balance sheet. 

This is called the multiplier effect of money and means that the broader money in the economy can be many multiples of the money that actually exists in the bank. You can think of it as a leveraged trade in a crypto position. The one difference is if things go belly up, you won't be the only one getting absolutely rekt.

This broader definition of money is termed the M2 and M3 money supply. And to give you an idea of just how much this inflates the outstanding money supply, the image below shows the M2 and M3 money supply compared to M1. The first bar shown (M1) is the only one that is actual tangible money. This was back in 2001. 

The graph below illustrates the evolution of the M1 and M2 money supply over the past few years.

It would seem that the person who drew up the graph ascertained the fact that M2 inflation mainly benefits Wall Street. Notice the spike illustrated at the top in the red box? That’s the Covid pandemic and it had a massive impact on the broader money supply. 

So why did this happen? Was it because the FED printed a lot more money? Well, yes, that is the slight uptick we see in the M1 money supply indicated at the bottom. However, this massive explosion of the M2 money supply shown above is a combination of another Factor.

You see, central banks can use the reserve requirement to impact the broader money supply. It's one of the three tools at their disposal—the other two being the federal funds rate and open market operations: bond purchases, etc. 

All the Fed needs to do to increase that money supply with the reserve ratio is lower it. This means that the money multiplier is higher the more it is injected into the economy and vice versa to contract the money supply.  

Pre-pandemic, these reserve requirements varied according to the number of net transaction accounts at the bank in question. The reserve ratio itself ranged from 3% to 10% for many years. This made sure that banks had reserves that were broadly in line with their activity. Those viewed as riskier had to hold more funds and were more restricted in effectively creating money.

However, along came the global pandemic, and that reserve ratio requirement went out of the window. On the 26th of March in 2020, the Fed dropped the reserve ratio to 0% for all banks. In other words, they eliminated any need for reserves at all. 

Now banks are not required to keep reserves to meet withdrawal requests. They can effectively loan out as much money as they want into the economy, thereby radically inflating the M2 money supply. Combine this with an insane amount of base money being printed over at the Fed, and you have that explosion in the M2 money supply. 

The Cat Is Out Of The Bag

Fun fact; Almost a fifth of all US money supply in existence was created in 10 months last year. Difficult to comprehend, right? In the entire 107-year history of the Fed printing money, all of that was printed in less than a year. That’s insane! And given that the vast majority of that is M2, it is effectively money printed out of thin air.  

Sound far-fetched? Well, how about we hear it from the horse's mouth. Here is a snippet from the infamous 60 minutes interview with Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis. This is what he had to say, 

And they're not even trying to hide it. There is an unlimited amount of money that the Fed can print. They're flooding the system with money printed out of thin air. It looked as if he had a bit of an honest moment and spilled the beans. 

Let’s listen to what Jay Powell, the chairman of the Federal Reserve system, had to say in his 60 Minutes interview, 

So he openly admits to flooding the system with money, almost as if to say, “I can't keep this charade up anymore. You got me.” So now the lid’s been blown off this caper, the jig is up. 
However, once free money and easy credit are out there, it's pretty hard to rein them back in, at least without some economic damage. 

Also, leaving all that funny money in the system is risky because it can lead to some pretty crazy inflation levels. This is especially the case in a post covid world where an excess money supply is chasing limited goods.

For many of us, it’s becoming increasingly clear we really only use fiat money out of necessity.  And some most definitely do not park it in a bank account because they know the bank will lend it out. So how do you secure your wealth these days?

Bitcoin, The Store Of Value Fiat Wishes It Was

An ever-increasing switched-on community suggests cryptocurrency. Bitcoin is the store of value that fiat wishes it was. There are so many reasons for this, starting with the most obvious of all. Bitcoin is limited in supply. There are only ever going to be 21 million Bitcoins mined. This is a protocol-defined limit that cannot be adjusted. 

Bitcoin and prominent Altcoins are governed by code. There is no single individual or even a group of individuals that can change their limit. They also cannot change the rate at which cryptocurrency is mined. 

In the case of Bitcoin, block rewards are also protocol-defined. 6.25 Bitcoin is mined per block every 10 minutes. This block reward number also decreases at every halving event. The most recent of which was May of 2020. There's no funny business going on here. It's just that simple. 

Moreover, when you keep crypto in your own wallet, what you're effectively doing is becoming your own bank. You are the only person who can unlock your assets with your private key. 

This is quite the opposite of the example mentioned earlier with money in the bank. The bank owns those funds, and the bank does whatever it wants to with that money. It even lends it out and inflates the money supply because, well, it can!

Another reason why many prefer cryptocurrency is that it is fully transparent and immutable. That means not only can we observe the actual state of the ledger, but no entity can reverse transactions or seize your coins.

Bitcoin is the granddaddy of the crypto industry, and arguably, there’s no other asset that's a better store of value out there. Although, some people may be asking, “what about gold? There was a gold standard for a reason.” Well, the Gold versus Bitcoin discussion is an entire topic in itself. Coin Bureau goes into detail in this video.

There is a growing community thrilled to be holding their wealth in Bitcoin and many other strong Altcoins. If anyone held fiat or gold post the covid crash, it would seem they would be in a far worse position than crypto enthusiasts are right now. 

The only thing worse than the fiat money system is fractional reserve banking. The fiat system led to the creation of valueless money, and fractional reserve banking led to the uncontrolled expansion of it. What's even more concerning is that most people you speak to have no idea how money is made. All of these people use this money without having a clue as to how inherently unstable it is. 

Not only that, but they store their savings in it. They keep money in bank accounts that don't have the funds to support it. All you need is one liquidity crunch to cause a panic: a panic, which can lead to a devastating bank run. If that doesn't show people how unstable fiat is, I don't know what will. 

Steadfast Crypto Communities Delivering Economic Sovereignty Will Prevail

Actual savings requires holding money in a way that keeps pace with inflation, or even better – beats out inflation and cost of living. So there is salvation; it's the honey badger of money, the antifragile store of value that's limited in supply, censorship-resistant, and immutable. 

Strong communities exponentially growing and committed to true liberty and economic independence will succeed in creating financial ecosystems withstanding the oppressive laws and executive orders that are deemed legal only because of the current powers that be say so. It is the most significant fraud that impacts the global population of all time.   

The crypto industry has over ten years under its belt now. It is a thing, and with innovative technology rapidly increasing that will outsmart the antiquated oligarchal system. We’re beyond the hype. Cryptocurrencies are officially part of our global financial system with El Salvador being the first country to accept Bitcoin as legal tender. 

 

 

 

Shitcoins vs Crypto Scams. What’s The Difference? 

There are many types of scams society has fallen victim to that have been around for decades. Charity scams, insurance scams, et al. are all too common, and they are more rampant than ever now we have the internet. And as technology emerges, anyone can simply create a crypto token which opens a pandora’s box of newly defined crypto chaos. 

The cryptocurrency market has exploded since the inception of Bitcoin, with 1000s of alternative coins now listed on various exchanges. Many have earned the respect of the crypto community by applying actual use-cases with developing technologies. While prominent cryptocurrency coins display transparency, genuine utility and serve a purpose for a decentralized application or an associated blockchain, many altcoins hold no real value. 

These coins are referred to as shitcoins and have no discernable purpose, and they are often targeted towards less experienced people in an effort to exploit them. The term shitcoin is commonly used for a copy or clone of another well-known crypto, or it can be a brand new project. It’s very much based on personal opinion. 

But are all shitcoins crypto scams? Not necessarily. There are inconspicuous scams out there orchestrated by greedy evil-doers hiding behind the guise of benevolence and charity and taking advantage of the crypto craze and people’s naivety of the nascent crypto industry. I’ll touch on that later with an example. 

Importantly, any crypto with no meaningful purpose and often no genuine demand for the coin, whatever value it may generate depends on pure speculation and is considered a precarious investment. Shitcoins are digital currencies that people believe to be valuable simply because they exist. Centered around hype and shills, they are very prone to pump and dumps and rarely recover. 

The crypto projects that rely on paid shills to pump their coin or token should be viewed with immense suspicion. Why should they feel the need to create an artificial perception of demand? Does that mean that there is no genuine organic interest in the project?

On a side note; If you’re not familiar with the terminology in this article relating to the crypto industry, here is a  breakdown of the most common crypto lingo.

How Easy Is It To Identify A Shitcoin?

It is often easy to identify a shitcoin because many follow a specific pattern. When a shitcoin is first launched, the token may attract some interest, but its price remains relatively low. The low price attracts newbie investors naively thinking they’ve invested in the “next Bitcoin,” further validated by a high-profile influencer backing it for whatever reason.

As interest peaks and investors jump in, prices spike quickly. This is almost always followed by the price tanking. The sharp fall in price is caused by investors selling their coins to profit from short-term gains. Usually, these pump and dump schemes are dominated by only a few “insiders” who really know the price dynamics and know when to sell to profit. The process is often associated with shitcoins and can leave many retail investors stuck with worthless tokens.

What Is The Most Obvious Sign?

The most obvious sign of a shitcoin is a lack of a well-defined function. 

Bitcoin was built for a decentralized payment network where financial transactions are secure, trustless, and censorship-resistant. It is now classed as the store of value for cryptocurrencies.

Ether, the coin native to the Ethereum blockchain, is used to validate transactions and secure the network. 

Binance Coin, the token native to the Binance Exchange, reduces fees on the Binance platform and powers the associated Binance Chain blockchain.

ADA, the native coin to the Cardano blockchain, is used to further develop applications, Defi, smart contracts, scalability, and interoperability. 

Hivecoin, Markethive’s native currency, is used to power a decentralized social media and multi-dimensional marketing platform, sovereign from the social media and tech oligopoly.   

Shitcoins do not have such clearly defined purposes.

Discerning a shitcoin is more straightforward when looking into the background development and associated project (if one exists). 

• Is the project a copy of an already-known cryptocurrency platform? 
• Does the project have an associated whitepaper? 
• Is the whitepaper copied from a different project? 
• Does the whitepaper reveal in-depth details on the technical implementation? Or is it just hyped up with promises and emotive images?
• Is there a clearly defined and credible road map?
• Is it raising money through an ICO based on the promise of a good return but lacking product, demo, or code? 

If there are contentious answers to any of these questions, the cryptocurrency could well be a shitcoin. A whitepaper is intended to be the technical details behind a project. It is not supposed to be an easy read. When a whitepaper is overly visual and lacks technical solutions, consider that a red flag. 

Numerous examples of projects have developed a cryptocurrency for something that really did not need one at all. Let’s not forget that the future value of a utility token will come from its actual use.

Three Widely Known Shitcoins

Although subjective, here are some of the more well-known shitcoins within the cryptocurrency market:

Dogecoin (DOGE). This meme-based cryptocurrency was designed around a comical picture of a Shiba Inu dog called Doge. The coin was initially created as a joke. Much of the coin's popularity has been the result of influencer encouragement and hype.

Shibu Inu (SHIB). Following Dogecoin's success, SHIB was developed as a token simply named after the Shiba Inu dog breed. It serves no purpose and is not associated with any blockchain or decentralized application. The maximum supply of tokens was set at one quadrillion.

Safemoon (SAFEMOON). Safemoon is a Ponzi-inspired coin that punishes holders for selling. Holders are charged an additional fee by the network when they sell, which is distributed to other holders. 

As I previously mentioned, it is so easy to generate a token for any reason. This video shows you what to do, or should I say what not to do, for the sake of the future of crypto and for humanity. 

The presenter also gives you his take on Safemoon and its ICO, which may be why certain authorities have outlawed ICO’s. Initial Coin Offerings are predominantly unregulated and have been the vehicle for scams and fraud. Consequently, the SEC has deemed them as securities and restricts unaccredited investors from participating. 

Crypto Scams Can Be Difficult To Recognize 

With technology, many projects can look legitimate at face value, so it’s easy to fall for their narrative as many unsuspecting people have done only to find they’ve been scammed with no recourse. 

Crypto scams have sky-rocketed, and it doesn’t help when popular social media influencers get involved claiming to be ambassadors for the cause. Playing on people’s emotions and goodwill makes the charity sector a sitting duck for crypto scams. 

One such example was the “Save The Kids” project, and unfortunately, many didn’t see the red flags and were fooled into investing their hard-earned money into this scam. There are many scams out there, but this one takes the cake for me. The video below explains it all.   

Finally…

There is a critical shortage of quality information about cryptocurrency, with only a handful of proven experts that can explain cryptocurrency and how it genuinely works in simple terms. There are millions of people desperate for more information to benefit from this developing industry which gives the opportunists a platform and immense power to shill and cook up crypto scams that can last for months or years. 

Scammers and shills take advantage of this narrow flow of information, purporting to be crypto gurus, and mislead or fool people looking for answers with their narrative, which by enlarge is speculative, even erroneous.  

Shitcoins are risky investments that most cryptocurrency enthusiasts should avoid. For investors who love risk and know what they’re doing, shitcoins may present an opportunity to make somewhat large but short-term profits. 

And outright scams? Well, tread very carefully. Do your research before committing. Who is behind the project? Are they credible? Have they been involved in any questionable projects in the past? How long have they been involved in the blockchain space? 

With experience comes knowledge and wisdom. As the saying goes, “Fool me once; shame on you. Fool me twice; shame on me."