Hive Has Been Working On The Liquidity Crisis
We cannot say this was unexpected.
For the past couple years we discussed idea of where to take Hive in terms of the financial offerings. All of this was done against the backdrop of the existing banking and financial system. Looking at the shortcomings, it was evident where Hive needed to focus its attention.
There is now a liquidity crisis coming to the surface. This is showing up in the banking system. It might not end there. For a couple years we covered how too much money was not the problem. The real issue was deflationary money.
Most buy into the idea that central bank reserves (what they print) actually has an impact. That is not general economy money since it is not legal tender. On top of that, we have quantitative easing (QE) taking assets off the balance sheet of banks and replacing them with said Treasuries. Suddenly, an asset that could be collateralized was swapped out for one that could not.
This was on top of the major reduction in collateral post Great Financial Crisis when mortgage backed securities (MBS) and then many countries bond markets blew up.
Our solution was Hive Bonds. There was even an article detailing how it is the collateral the world needs. It didn't take Nostradamus to figure that one out.
Genius is also not required to foresee an oncoming sovereign debt crisis.
Monetary Elasticity Is Crucial
The present situation is revealing that, no matter what the form of money, elasticity is crucial. When you have a liquidity crisis, bad things happen.
Sadly, many are using this situation to espouse the virtues of Bitcoin. This is not the case. You do not solve a liquidity issue with fixed money. That is the most backwards thing that can be done. Of course, maybe now people will begin to understand what deflationary money looks like.
The Hive Backed Dollar (HBD) is receiving a lot of attention of late. The reason is valid. We have a powerful currency that can help to offset what we are seeing. A big part of the transformation that has to take place is not to Bitcoin but, rather, to decentralized finance (DeFi).
We did a number of articles outlining the Hive Financial Network, with HBD as the centerpiece. The framework was constructed knowing the shortcoming of the existing monetary system and how it impacted banking.
Being able to meet the monetary needs to the economy is crucial. Here is where elasticity enters. When there is a major deficit, which we saw over the last 15 years, the solution is clear. However, with collateral tight (balance sheet contraction) along with the money supply (the currency make through loans) not expanding at a rapid rate, we end up in the spot we are in.
Hive Building From The Ground Up
The relationship between $HIVE and HBD is a powerful mechanism. We should not underestimate how important that is to the overall future of what we are building.
Here we see the ability to expand and contract as the market sees fit. It is probably a topic worthy of its own article. The main idea is HBD has the ability to follow the business cycle, at it is unfolding. We see the desire to change it being removed.
One of the biggest problems with most of the money ideologies along with the central bankers is they believe they can change the business cycle. In over 1,000 years, this never happened. Karl Marx believed the same thing and incorporated that into his writing. Each have failed in their own way.
As stated in the past, cryptocurrency can replicate the Eurodollar system. For decades we saw a decentralized system emerge where entities could create their own money. This allowed the system to direct money where it was need along with at the right time. Unfortunately, it was closed to the masses and controlled by the banks.
We now have the technology to do the same thing except we can cut out the bankers. Hive is building this from the ground up. HBD is an important component. Decentralized sidechains, or Layer 2, is equally as important.
Our discussions over the last year or so might have seemed haphazard. Now, it is possible to see it was nothing of the sort. There was a framework being constructed for all to see. Hopefully now, the applicability becomes obvious.
This is something that we have been creating for a long time.
If you found this article informative, please give an upvote and rehive.
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I often feel that crypto acts much faster than the FIAT system. We ran into major liquidity issues 6 months ago if not more and now the fiat system is seeing that big time. It's most likely because crypto is a world wide currency but it's traded at all times instead of a select few hours on a select few days.
I agree and think there are two reasons:
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HBD is indeed the centerpiece and seeing that Hive and HBD have a lot in common.
The way things are going now, I won't be surprised if there is no need for the banking sector again.
I'd love to see a huge increase in what we have available here on Hive. It doesn't have to be what generates mass adoption, but just a little something that nudges us in that direction or actually becomes a blip on the necessary radars.
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Need to have a powerful foundation. That is what we are building. All things are interconnected. So we are taking the right approach.
We just need to understand what is happening and how different this is.
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For me their is much faith in #HBD at the moment and if this keeps on going, banking sector won't really have much to do or say with time
yeah. Very helpful, i believe and thats why i joined. ive really loved it so far.
I hope it gets better.
Nothing can be changed in even 10.000 years under this economic model. I think there will be an altertanive monetary model with cryptocurrencies. We may not need any financial instution at least ;)
It will be nice to give us some insight over this, my assumption is, this is where the HBD stabilizer comes in.
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@joetunex
Not just the stabolizer. Think about any big operator (application) that does the converting. This means that if more HBD is required, entities can create it. If less, you will see people move towards $HIVE.
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This is going to change so many lives for the better. Most just don't know it yet.
Thanks for the continued education.
!BBH
@taskmaster4450! Your Content Is Awesome so I just sent 1 $BBH (Bitcoin Backed Hive) to your account on behalf of @bradleyarrow. (1/50)
Very educational as expected. It is good to be reminded and receive confirmation of the following insights:
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The idea of HIVE as well as the HBD are very powerful and extensive tools that we need to understand well to understand the economy in which we are believing. It is incredible the change that is happening right now with the economic system, despite the fact that many things have hit the The world of cryptos continues to maintain that economic strength, it is the ideal time to take advantage of this crisis to be part of the change towards the future of cryptos, thank you for sharing this post with us
The relationship is very powerful. We can see how things are changing for the better. We are only beginning to realize the untapped potential of what is taking place here.
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