Friday, May 12, 2017

What happened after the Nixon Shock

A recent research paper published this month analyzes whether or not bitcoin can be a viable alternative to fiat currencies. The report, authored by Vavrinec Cermak from Skidmore College, offers an empirical analysis of bitcoin’s volatility based on a GARCH model. Cermak details that if bitcoin’s trend of decreasing volatility continues it could be a functioning alternative to fiat in 2-3 years.

When Nixon broke the gold obligations,those who held gold got showered with digits.  How do gold horders re-invest?  Badly, for a while and we have to re-shape banking systems to the new FX trade standard.  This happens in monetary regime change.

We will see the similar.  Crypto currencies learn pure cash and volatility drops.  Volatility especially drops when we deploy auto-traded S&L technology,  as released in the open source, unpatentable Redneck trading pit architecture. We are doing monetary regime change,the technical part of it.  It should not be all that disruptive.

The math behind this research, by the way, is trying to time index an odds making machine, as we can obviously see.  I read the blurb, not the research. The blurb told me they were doing some difficult math, equivalent to finding the natural interest charges over time, doing Black-Scholes in reverse. This is how we cross the pure cash-smart contract boundary.

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