Miami's Multiple Money Visions

Countless, competing imaginings of money

Exploring the transformation of value in the digital age By Michael J. Casey, Chief Content Officer Dec. 3, 2021 If you were forwarded this newsletter and would like to receive it, sign up here. Sponsored by     Partly inspired by the mania around non-fungible tokens (NFT) and other new digital asset solutions on display in and around Miami's Art Basel event, this week's column offers a key takeaway from CoinDesk's concurrent Future of Money series of articles. The conclusion is that we are now in the throes of a full, multifaceted reimagining of money and digital value that is only going to get more intense.     This week's "Money Reimagined" podcast is also drawn from Miami, where I met Pierina Merino, the inspiring, Venezuelan-born founder of FlickPlay, a mobile app perhaps best described as Pokémon GO meets TikTok meets NFTs. The conversation ranges into deep considerations of the nature of self-identity and the role that items of value in social media can play in allowing people to shift the "storylines" of their lives.    Have a listen after reading the newsletter. A message from Circle  Introducing Circle Yield, a new way for institutions to get crypto returns without the volatility. It's a breakthrough investment built on USD Coin (USDC) and fully secured with bitcoin collateral. Offering fixed rates* across a full yield curve and returns that are superior to holding cash. Move your money forward with Circle Yield.   *Rates are purely indicative and are subject to change pending availability, approval and market conditions.   Additional terms apply. Learn more.  It's Going to Get Weirder Rachel Sun/CoinDesk The excellent collection of essays compiled for CoinDesk's Future of Money Week began with a perfect summation of where money is going by podcaster Laura Shin: "It's going to get a lot weirder."   Having just spent a few days in the madhouse of the non-fungible token (NFT) scene at a series of events on the sidelines of Art Basel in Miami, that prediction seems spot on.    I'm pleased Laura used the comparative "weirder," because the truth is money has always been weird.    Regardless of what gold bugs might tell you, all money – whether it's based on a shiny rock, a piece of paper or bits and bytes – is an imagined phenomenon. Yet, to function, money needs us to collectively believe that is far more lasting and real than something we've just conjured out of thin air. Belief is everything.    What makes the current moment weirder and the future weirder still is that this collective belief process is being fragmented. There isn't just one common expression of money anymore. There are now countless, competing imaginings of money and of new concepts for assets, value and property.    Look at some of the headlines from our Future of Money collection of articles: Daniel Kuhn making "The Transhumanist Case for Crypto," David Morris arguing that "Memes Are the Future of Money" and Edward Oosterbaan asking the question, "What is Money in the Metaverse?" Taken together what they tell us is that, when it comes to money and value, people's minds have broken free of the constraints of the traditional, nation-state-led legal framework we've worked under for centuries.    This is all possible, of course, because blockchains resolve one of the core problems that any system of money needs to overcome before it can become trusted by the community it serves: the problem of double counting. You don't need a trusted government to enforce the system and prevent counterfeiting; the protocol does it for us.   Just because people are imagining and deploying multiple new forms of money doesn't mean, however, they are all going to succeed as lasting, sustainable models. You can imagine something new and put it out there, but to succeed, a big enough community needs to glob onto and use it.    In Miami this week, the excitement and passion around new ideas for NFTs was palpable. But as artists, developers, entrepreneurs and all manner of gold diggers constantly pitched me new ideas for metaverses, games, ticketing solutions, music sharing, you name it, it was hard not to draw parallels with the dot-com bubble or crypto's own version that phenomenon, the initial coin offering bubble of 2017. To paraphrase a classic meme of this NFT moment: "We're NOT all gonna make it." (wNagmi?)   Still, it's also true to say that change is also inevitable. There is a Cambrian explosion of innovation underway. A powerful force of rapid evolution has been unleashed. Even if governments and other institutions wanted to maintain the dominance of the old system, they can't. This is unstoppable.    Get ready to embrace the weird. Off the Charts Ethereum Shows Strength Bitcoin's latest all-time highs (ATH) on Oct. 20 and Nov. 8, were short-lived, with the asset spending just nine days above April's top before crashing more than 23%.   In bitcoin's weakness, ether showed strength. ETH/BTC, a measure of ether's price relative to bitcoin at any given time, is again nearing its highest levels since 2018. ETH gaining on BTC has historically provided significant insight to the state of the market. During 2017-2018, ETH/BTC peaked at 0.156, sending small-cap coins flying and eventually marking the end of the cycle.   ETH's latest gain on bitcoin could mean several things, including: We are seeing late-cycle market structure, with retail directing its interest outside of bitcoin. New/institutional capital is interested in easily programmable smart contract platforms. EIP 1559's fee burn (transaction fees burnt from supply) has taken significant sell pressure off of ether as it has been nearly deflationary.  Maybe all these reasons are relevant. While ETH has appreciated on BTC significantly, it has done nothing close to the numbers of other smart contract platforms. Solana, Avalanche and Fantom's native tokens (SOL, AVAM and FTM) have returned 15,290%, 12,464% and 3,336%, respectively, for the year to date. The adoption of decentralized finance (DeFi) and NFTs helped bring light to the potential of blockchain tech. During previous cycles, the technology was hardly used and mainly a tool of speculation.    Is this adoption strong enough to send the ETH/BTC ratio back to its highs?   – Teddy Oosterbaan, CoinDesk Research Analyst A message from Amber Amber Group is an integrated digital asset platform serving retail and institutional clients by providing deep liquidity, attractive yields, and sophisticated portfolio management tools. With 12 offices on three continents, and nearly a trillion dollars in volume traded, Amber Group offers clients personalized, compliant, and secure service across dozens of digital assets.   Find out more at www.ambergroup.io The Conversation Block and Tackle Illustration: Rachel Sun/CoinDesk It was a big news week for high-profile bitcoin fan Jack Dorsey. Twitter announced on Monday he has stepped down as CEO. Then on Wednesday, Square – the other company in which he held that position – would change its name to "Block." The second announcement gave Crypto Twitter something to have fun with, but not until Square had had some fun with its announcement.  A few tweets into a thread explaining the name change as one that ties its four business lines together, Square used the occasion to take a dig at Meta, the new corporate name of Facebook.  There wasn't much information in the announcement pertaining to Square's investments in crypto business, except to highlight a change in Square Crypto's name to Spiral. But that didn't stop Crypto Twitter from drawing its own conclusions for why a name synonymous with "blockchain" was chosen.   One crypto tweeter put an especially positive spin on things.  But it was Frank Chaparro of CoinDesk competitor, The Block, who won Twitter.  Relevant Reads The Future of Money In addition to three stories mentioned and linked in the column above, there were many other great reads included in CoinDesk's Future of Money week. Here's a sampling.  Contributor Matthew Prewitt explores how the trio of money characteristics that economists have long argued to be the defining features of money  – Unit of Account, Medium of Exchange and Store of Value – might not be as aligned in the future. It's a brilliant way to challenge the dismissiveness with which many traditional economists view the volatility of bitcoin. Jeff Wilser, a regular CoinDesk contributor, offers up "Seven Wild Scenarios for the Future of Money." His lists include a world of programmable money and machine-to-machine transactions in which "cars spend money and buy their own insurance," and a situation where "money goes intergalactic." If Wilser's wild visions of the future seem a bit much, CoinDesk Executive Editor Marc Hochstein is here to offer a cautionary message. He interviews Steven Kelly, a research associate at the Yale Program on Financial Stability, who lays out "The Downside of Programmable Money." Money Reimagined A newsletter from CoinDesk Were you forwarded this newsletter? Sign up here. See Previous Editions Copyright © 2021 CoinDesk, All rights reserved.  250 Park Avenue South New York, NY 10003, USA Manage your newsletter subscriptions  |  Unsubscribe from all CoinDesk email