Scathing comments on Crypto from Mr Rabi Shankar - Deputy Governor, RBI.

1) On crypto being treated as a currency:
"Currency always has an issuer, usually a trusted entity like the sovereign. Even when gold is used as a currency, the gold coins had to be issued by a sovereign.

Secondly, historically, a currency has always been either a commodity with intrinsic value or a debt instrument. Cryptocurrencies do not conform
to this understanding as they do not have an issuer, they are not an instrument of debt/commodities nor do have any intrinsic value.
Currency needs trust, not everything that can be trusted is a currency. So even if technology (as
in a blockchain) provides the trust for cryptocurrencies, they can at best perform the role of a currency within the private and closed environment of that cryptocurrency.
They do not, and should not, automatically become a currency for the larger society "
2) On crypto being treated as a financial asset : "This is also problematic because all financial assets have underlying cash flows and need to be some person’s liability.
Cryptocurrencies are neither any person’s liability nor do they have any underlying cash flows. They are not financial assets, by definition."
3) On crypto being treated as a commodity : "Commodities are tangible and have utility; cryptocurrencies have neither. There is this somewhat
awkward attempt to equate some of them with gold, hence limiting their supply like natural resources, or creating them through mining.
Limiting supply by design is not same as limited supply in nature (like gold) because (a) design can be modified & hence such limitation is artificial, and (b) even if 1 cryptocurrency has limited supply, that limitation does not work for all cryptocurrencies taken together.
Further the fact that gold is mined does not in itself make it money, it has to be stamped and issued by a sovereign to make it money."
4) On crypto being treated as digital asset: "Even that is doubtful as cryptocurrencies do not have any underlying use, like for instance car hiring softwares or a core banking systems, or, for that matter,
smartphones.
That basically leads to conclusion that it's an electronic code (with no practical use) which has created enough hype such that people are willing to pay money to buy ownership rights to that electronic code, seemingly on the hope that someone else would buy it at a higher price
What started off as a medium of exchange has appeal similar to that of a speculative asset.
As a store of value, cryptocurrencies like bitcoin have given impressive returns so far, but so did tulips in 17th century Netherlands. Cryptocurrencies are very much like a speculative or gambling contract working like a Ponzi scheme.
In fact, it has been argued that the original scheme devised by Charles Ponzi in 1920 is better than
cryptocurrencies from a social perspective. Even Ponzi schemes invest in income earning assets.
A bitcoin is akin to a zero-coupon perpetual; it’s like you paid money to buy a bond which pays no interest and which will never pay back the principal. A
bond with similar cash flows would be valued at 0, which, in fact, can be argued as the fundamental value of a crypto"
Full speech can be read at :
https://t.co/mX9n2ukCN8…

Interestingly its second time in a week that tulip reference has been used by RBI 🙂

More from Crypto

1/ Welcome to #DeFi Wednesday.

Let's talk about how interest-bearing cash on a blockchain is going to revolutionise boring corporate treasury management that concerns every company is is a larger business than all crypto trading in the world.

Enter the thread

👇👇👇


2/ Blockchain community is often seen as toxic maxis and redditors who shill other their weekly favourite shitcoin in the hope of getting Lambo.

Sometimes we also do things that progress humanity towards the better future and interest-bearing cash is one of those things.


3/ Less chad and more things that actually matter:

My incomplete theory of interest-bearing cash is also available also as a blog post:

https://t.co/uiG0fZiVyu

It is 15 pages. Pick your slow poison or die fast by continue reading here.

4/ First time in the history we have an ability to create interest-bearing cash-like instruments.

Interest-bearing cash ticks up dollar (euro) balance real-time in your wallet.

Here is a demonstration using @aaveaave aDAI, based on @makerdao DAI, and @TrustWalletApp


5/ Interest-bearing cash is not like your bank's saving account. Your money in a bank is not yours, but bank's. There are some flaws in the current banking system causing a headache for Chief Financial Officers (CFOs)
Out of curiosity I dug into how NFT's actually reference the media you're "buying" and my eyebrows are now orbiting the moon

Short version:

The NFT token you bought either points to a URL on the internet, or an IPFS hash. In most circumstances it references an IPFS gateway on the internet run by the startup you bought the NFT from.

Oh, and that URL is not the media. That URL is a JSON metadata file

Here's an example. This artwork is by Beeple and sold via Nifty:

https://t.co/TlJKH8kAew

The NFT token is for this JSON file hosted directly on Nifty's servers:

https://t.co/GQUaCnObvX


THAT file refers to the actual media you just "bought". Which in this case is hosted via a @cloudinary CDN, served by Nifty's servers again.

So if Nifty goes bust, your token is now worthless. It refers to nothing. This can't be changed.

"But you said some use IPFS!"

Let's look at the $65m Beeple, sold by Christies. Fancy.

https://t.co/1G9nCAdetk

That NFT token refers directly to an IPFS hash (https://t.co/QUdtdgtssH). We can take that IPFS hash and fetch the JSON metadata using a public gateway:

https://t.co/CoML7psBhF

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I just finished Eric Adler's The Battle of the Classics, and wanted to say something about Joel Christiansen's review linked below. I am not sure what motivates the review (I speculate a bit below), but it gives a very misleading impression of the book. 1/x


The meat of the criticism is that the history Adler gives is insufficiently critical. Adler describes a few figures who had a great influence on how the modern US university was formed. It's certainly critical: it focuses on the social Darwinism of these figures. 2/x

Other insinuations and suggestions in the review seem wildly off the mark, distorted, or inappropriate-- for example, that the book is clickbaity (it is scholarly) or conservative (hardly) or connected to the events at the Capitol (give me a break). 3/x

The core question: in what sense is classics inherently racist? Classics is old. On Adler's account, it begins in ancient Rome and is revived in the Renaissance. Slavery (Christiansen's primary concern) is also very old. Let's say classics is an education for slaveowners. 4/x

It's worth remembering that literacy itself is elite throughout most of this history. Literacy is, then, also the education of slaveowners. We can honor oral and musical traditions without denying that literacy is, generally, good. 5/x
The YouTube algorithm that I helped build in 2011 still recommends the flat earth theory by the *hundreds of millions*. This investigation by @RawStory shows some of the real-life consequences of this badly designed AI.


This spring at SxSW, @SusanWojcicki promised "Wikipedia snippets" on debated videos. But they didn't put them on flat earth videos, and instead @YouTube is promoting merchandising such as "NASA lies - Never Trust a Snake". 2/


A few example of flat earth videos that were promoted by YouTube #today:
https://t.co/TumQiX2tlj 3/

https://t.co/uAORIJ5BYX 4/

https://t.co/yOGZ0pLfHG 5/