Author: CoinDesk

As the economic dimension of the COVID-19 crisis comes into clearer view, what have we learned about the battle for the future of money? Does the dollar reign supreme? Are within-the-system competitors like the euro or China’s digital yuan gaining ground? Does an outside the system alternative like bitcoin stand a chance? 

This episode is sponsored by ErisX, The Stellar Development Foundation and Grayscale Digital Large Cap Investment Fund.

Over the last month, the “Money Reimagined” series has looked at the battle for the future of money. 

Episode 1 focused on the dollar and why it is simultaneously stronger and more set up to fail than ever before. 

Catch up: Why the Dollar Has Never Been Stronger or More Set Up to Fail

Episode 2 was all about the obvious contenders to replace the dollar such as the euro or China’s currency, especially as they race towards a digital yuan. It also looked at where Facebook’s Libra might fit in the mix.

Catch up: The Rise of the Dollar Killers

Episode 3 looked at one of the most unique features of this modern currency battle - the fact that there are fundamentally new systems like bitcoin in the running. Can a non-sovereign currency actually be more relevant than global fiats? 

Catch up: Where Bitcoin Fits in the New Monetary Order

This final episode of the “Money Reimagined” series checks in on each of the previous episodes but brings a new set of voices to the mix. Between May 11 and May 14, CoinDesk hosted Consensus:Distributed, a virtual summit featuring some of the leading lights in crypto, finance, economics and pop culture. In this episode, we hear from those voices, including:

• Lawrence Summers - former U.S. Treasury Secretary
• Christopher Giancarlo - former Chairman of the CFTC
• Michelle Phan - YouTube innovator and founder of Ipsy
• Chaoping Zhao - founder and CEO of Binance 
• The Winklevoss brothers - founders of Gemini 
• The Chainsmokers - Grammy-winning artists 
• Carlota Perez - influential economist

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A macro expert joins to discuss why the U.S. dollar and economy are more broadly poised to suck the liquidity from the entire global economy.

This episode is sponsored by ErisX, The Stellar Development Foundation and Grayscale Digital Large Cap Investment Fund.

You know the meme: Money printer go brrr. It means inflation right? 

Not necessarily, says Brent Johnson. Since 2016-2017, Johnson has been arguing the big economic issue of our time isn’t inflation of the U.S. dollar due to excess money printing, but the havoc caused by a global system where the dollar keeps getting stronger and sucks up liquidity from the rest of the world. 

As the dollar has strengthened over the COVID-19 crisis, his ideas look more prescient than ever. In this conversation with NLW, Johnson discusses:

• What the “Dollar Milkshake Theory” is 
• Why the implications of the theory stress him out, even though he created it
• Why everything is relative and no asset can be analyzed in a vacuum 
• Why we could see the dollar, bitcoin and gold rise at the same time 
• Why we can’t discuss macroeconomics without discussing geopolitics and even the military

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This episode is sponsored by ErisX, The Stellar Development Foundation and Grayscale Digital Large Cap Investment Fund.

Twenty-one different people can reasonably claim to have invented the light bulb, but Thomas Edison is the one we know about. Was it just good PR? According to Matt Ridley, it was because Edison was the progenitor of an “innovation factory” that didn’t just create things but brought them to market in a way no one else did. 

Innovation is one of the most important forces in the economy, and arguably the most important driver of human prosperity over the last century. Yet, for most of its life, it has been viewed as some strange exogenous force, rather than as a discipline that could be understood. 

In this conversation with NLW and Ridley discuss:

• Why it took so long for economists to take the study of innovation seriously
• Why invention is different from innovation
• Why innovation has tended to concentrate in geographically proximate areas
• Why free societies produce more innovation than closed societies (including empires)
• Why China’s innovation production over the last decade may be an exception that proves the rule of innovation thriving in freedom
• Why government winner picking is a terrible way to inspire innovation
• Why innovation policy led Matt to support Brexit
• The rational, optimistic take on the future

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This episode is sponsored by ErisX, The Stellar Development Foundation and Grayscale Digital Large Cap Investment Fund.

The battle to control narratives is the battle to shape how people understand the world around them. But the traditional gatekeepers of narratives - the media - have never had more competition to shape what is perceived as truth. 

In this episode, NLW speaks with Bedrock Capital founder Geoff Lewis about what it means to seek out opportunities in “narrative violations.” They also discuss: 

• Why de-globalization and “onshoring” are likely to be among the most important economic drivers in the U.S. in the coming decade
• Why the shift to working from home may be an overblown “narrative mirage” 
• How important questions of institutional decay have been co-opted by the culture war 
• Why independent, individuals in the media have more influence than ever
• Why we’re in a “narrative mirage recovery”

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This episode is sponsored by ErisX, The Stellar Development Foundation and Grayscale Digital Large Cap Investment Fund.

On Wednesday, a batch of coins mined just a month after bitcoin’s birth were moved. It was the first time since August 2017 that any bitcoin from early 2009 had been transferred, and the action set Bitcoin Twitter on fire. While a number of bitcoin archaeologists quickly and persuasively argued the tokens were almost assuredly not mined by bitcoin creator Satoshi Nakamoto, it was a moment that reinforced the living history in the bitcoin ecosystem. 

In this episode, NLW looks at what makes the Satoshi mythology powerful: 

• Genuine technical innovation and problem solving that had stymied some brilliant minds for decades
• Incredible instincts around narrative and human psychology, as reflected in the “Chancellor on the Brink” message embedded in the Genesis Block and the ceremony around the halving
• The incredible contrariness of a creator withdrawing in a world where entrepreneurs are lionized like no one else in society

And while the battles within the bitcoin community around interpretation may look more like the early history of religions than like a business ecosystem, NLW argues that fervor is a key part of what de-risks bitcoin, even for investors who don’t at all care about the mythology.

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This episode is sponsored by ErisX, The Stellar Development Foundation and Grayscale Digital Large Cap Investment Fund.

The European Union and the euro are part of the most ambitious political and economic experiment of the 21st century. The COVID-19 crisis, however, has exacerbated growing questions of political will and political legitimacy and led some to wonder if the eurozone can survive. 

Tuomas Malinen is the CEO of GnS Economics, a macroeconomic advisory firm, and Adj. Professor of Economics at the University of Helsinki. In this interview, he and NLW discuss:

• Why the European debt crisis was actually a “morally corrupt bank recapitalization project”
• Why negative interest rates and quantitative easing made the European banking sector particularly weak even before the pandemic 
• Why the German Constitutional Court’s battle with the European Central Bank has major implications for the entire euro system
• Why European leaders are pushing for deeper integration when citizens want more lightweight integration
• Why European nations would be more likely to support one another in bilateral arrangements rather than through forced solidarity 
• Why the only way to save the European Union might be to let the euro fade away

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This episode is sponsored by ErisX, The Stellar Development Foundation and Grayscale Digital Large Cap Investment Fund.

The dollar has a unique role in the world due to its reserve currency status. For many years that status has created incredible opportunities for the U.S. Increasingly, however, some are wondering if the global standard has outlived its usefulness - not only for the world but for the U.S., too.

In this illuminating conversation, one of FinTwit’s brightest minds, Lyn Alden, shares her perspective on:

• Why we’re at the end of a strong dollar cycle
• Why the Federal Reserve is terrified of the global dollar shortage
• The difference in creditor vs. debtor nations
• The concept of the Triffin dilemma 
• Why Japan has been able to print money without seeing rampant inflation 
• Why we have inflationary and deflationary forces competing to influence the U.S. economy 
• Why debt is going to matter more than ever 
• What alternatives to the USD system might look like

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This episode is sponsored by ErisX, The Stellar Development Foundation and Grayscale Digital Large Cap Investment Fund.

Jamie Catherwood works at O’Shaughnessy Asset Management, a quantitative long-equity investment firm. More importantly, however, he is the finance history guy on Twitter. His “Financial History: Sunday Reads” curation pieces and longer form articles on his site Investor Amnesia have become required reading for anyone who wants the historical context for current financial issues.

On this episode of The Breakdown, Jamie and NLW discuss:

• Financial lessons from previous pandemics, including the 14th century bubonic plague; an 1892 Cholera outbreak in Hamburg, Germany; and, of course, 1918 
• Strange parallels between 1918’s Spanish flu and the current Coronavirus crisis, including an increase in the price of oranges 
• The concept of “Minsky Moments,” a key inflection point in bubbles where over-exuberant markets become unwound extremely quickly 

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This episode is sponsored by ErisX, The Stellar Development Foundation and Grayscale Digital Large Cap Investment Fund.

Albert Wenger is a partner at Union Square Ventures as well as a prolific thinker and writer. His “World After Capital” is an evolving digital book project that looks at a set of megatrend shifts as the world moves between economic paradigms from the Industrial Age to the Knowledge Age. 

In this wide-ranging conversation, he and NLW discuss: 

• Why attention is at the center of the new Knowledge Age
• Why markets can’t price crucial needs such as pandemic preparedness
• Why the new era will be defined by three categories of freedoms: economic freedom, information freedom and psychological freedom
• Why universal basic income has an important role to play in economic freedom
• How UBI could avoid political capture 
• Why technology is inherently deflationary 
• Why real estate, education and health care should be much cheaper than they are
• Why community currencies could be a key innovation from the current crisis 

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This episode is sponsored by ErisX, The Stellar Development Foundation and Grayscale Digital Large Cap Investment Fund.

Niall Ferguson has called this moment an “age of experimentation” when it comes to currencies.

One of the unique features of this moment is the experiments are not limited to the traditional actors. It is not just nation-states trying to elevate their currencies in the face of the global dominance of the dollar, but non-sovereign monies born of decentralized networks that are plausible contenders in this game of currency thrones.

Bitcoin was a byproduct of the last financial crisis. This connection was immortalized in the message embedded in the genesis block: “Jan 03/2009 Chancellor on the brink of a second bailout for banks.” 

More than a decade on, in our new financial crisis, the size, scale and implications of that bank bailout seem positively quaint in comparison. 

This episode looks at where bitcoin and other permissionless, non-state cryptocurrencies fit in the battle for the future of money. 

It starts with a look at the bitcoin narrative in the wake of the market crash. With the most significant stock market correlation of its life, did bitcoin’s digital gold narrative evaporate alongside the S&P 500?

From there, we move to an asset that has been massively in demand since the beginning of the crisis: USD stablecoins. We explore whether this is simply an affirmation of the supremacy of the dollar or represents a more disruptive force in the global monetary order.

We conclude with a look at the relevance of bitcoin on the other side of the crisis. As the market moves from deflationary to inflationary, there are many who will be looking to hard assets and sound money as a cure. In that context, bitcoin could thrive. 

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