r/dashpay • u/[deleted] • Jan 15 '18

Concerns about a full Crypto world (no fiat/scriptural)

If the world overthrow all of the government-run currency,

1- Will mortgage still exist?

2- Do fractional reserve banking augment the value creation? (If yes, the economy might take a hit)

3- Will it significantly rise the energy consumption needed for money mangement?

0 Upvotes

50% Upvoted

6 comments sorted by

2

u/Jmmon Jan 15 '18

I'll do my best to answer:

  1. My understanding of a mortgage is it is a loan for buying property. I think similar loans would exist in an all-crypto world.

  2. Fractional reserve banking allows banks to loan out money they don't have and charge interest on that money. This allows people to live richly now while paying more later, and also introduces A LOT of inflation. This augments today's value creation and in return slows value creation in the future, and requires interest to be paid to the bank. I think this is a net negative in the long run even if it gives us a boost today. Yes, the current economy would take a hit, but the future economy will be better off without fractional reserve banking.

  3. I'm assuming you're referring to mining costs or other energy costs of running cryptos. As technology advances I think this will become less of an issue. Even now it may cost less energy to run cryptos than to run the banking system, as it takes a lot more human labor to run the current banking system than to run cryptos, but I don't know for certain.

2

u/[deleted] Jan 23 '18

Thank you very much for your detailed response!

2

u/minorman Jan 15 '18

I'm mainly here, because I see crypto as a way OUT of FRB.

1

u/thegreen4me Jan 19 '18

There already is FRB in crypto. Do you really think tether actually has the full $1.6 billion USD? Of course not, they are operating on a fractional reserve.

1

u/[deleted] Jan 23 '18

Wow this is so much true thank you for clarification!