A couple of days ago I was reading about “quantitative tightening & easing” to familiarize myself more with traditional finance systems.
A lot of everything I come across is not easy to grasp but I've figured a long time ago that the surface complexity of it all is a feature designed to really just throw normies off trying to really understand what is going on.
One thing that really stood out was the fact that we have essentially created a system that is ever expansive but practically based on absolutely nothing.
What's even more interesting is that what we have with crypto is really just the exact same thing, but with different influence structure, essentially limiting how much of an exploit can be carried out.
Well, that was before social concepts and sense of culture or cultural importance became a factor of influence.
I do not wish to touch much on quantitative easing and tightening but I suppose I owe everyone reading a bit of an explanation of what they are.
First off, it's important to note that it most definitely isn't a global standard in how the government goes about managing the economy. We are majorly dealing with the practice of the US and UK federal banking system — trusting public data on its application.
So, what's Quantitative easing and tightening?
Quantitative Easing (QE) is a monetary policy tool used by central banks, such as the Federal Reserve or European Central Bank, to stimulate the economy during periods of low growth or recession. It involves increasing the money supply by purchasing financial assets, such as government bonds, corporate bonds, or other securities.
On the other hand;
Quantitative Tightening (QT) is the opposite of QE. It’s a policy used to reduce the money supply and curb inflation or an overheating economy. The central bank decreases its balance sheet by selling assets or allowing previously purchased securities to mature without reinvesting the proceeds.
GPT
QE is considered an infinite money glitch even though it's systematically a feature of our finance and economic system and not technically a flaw.
In finance, "infinite money glitch" is often used humorously or critically to describe perceived flaws in economic systems. It is a concept associated with loopholes that allow anyone to exploitatively accumulate a lot of money without proportional effort or limitations.
The big question always is if QE actually qualifies as an infinite money glitch? Well, it does because we are effectively creating value that doesn't exist, and can allocate to specific industries which we individually could be largely financially exposed, thereby enriching ourselves when the effects of nearly injected liquidity kicks in.
Now, make no mistake, we have the exact same system with crypto as we can always at will print new tokens for whatever reasons, but unlike with traditional finance, the risk and reward associated with crypto is evenly distributed amongst stakeholders, so benefits and potential losses are proportional distributed.
Now, in this case, we are simply comparing the practice of quantitative easing with the acts of printing new tokens to funds whatever through decentralized governance led by onchain proposals.
But, there's far more instances of infinite money glitches when it comes to crypto and some are just above the influence of protocol governance and any attempt to enforce stringent conditions would simply lead to stiffening the ecosystem's ability to grow flexibly.
Instability is inevitable moving forward
Memecoins is the infinite money glitch we are talking about and it will create vast instability within the ecosystem, every step of the way of increased adoption.
Memecoin is an invention that lives and feeds off the social layer of our ecosystem. It has little intersection with chain-level economics, so it practically remains non-governable, giving room for vast exploitation.
The mistakes we've made over the years is thinking about crypto too narrowly as a weird single-stationed money structure with no regard for anything other than boring chain-level stuff.
So we've prioritized governance, infrastructural and protocol security, all the techie and economic boring stuff. Things the average people doesn't give a flying fuck about.
We do all this while talking about retail adoption without truly understanding what that means.
It is unfortunate but retail, to be quite frank, is the “dumb market” segment. These are the people that buy into dreams and stories, rather than what sounds, looks and feels like a math equation.
It matters little that where the economic stability lies is with the boring stuff, retail isn't going to look that way because their brains are generally programmed to look towards the easy-laying side, where social concepts create communities of shared beliefs and essentially cultures.
Memecoins sit in the middle of the social segment of crypto and its self-serving infinite money glitch factor with no caps on how exploitable it can be, to anyone is a major problem.
What TRUMP has pulled in the last 2 days is proof of this. Pump.fun is evidence of what exactly the social layer of crypto looks like.
It's messy, there's low education penetration, marketing is hyper-targeted at the least exposed group of individuals, retail is trapped in a value vacuum of an invention and the only way to fight it is to invest more in education and in making the boring side of crypto to feel more like a socially welcoming segment.
Anyone can wake up, create a shark meme token and it pumps into a billion dollar asset after a few posts get posted on social platforms. Certainly, we are tempted to believe that it won't always be like this, that is that retail won't always be this dumb but newsflash, it will, because the stories and dreams sold always get better and retail will always be entertained and thrilled by it.
It's like a bridge point where inclusivity meets wishful illusion, sold perfectly that it is socially acceptable. It sucks, the more you think about it, but it's the reality and it serves to extract value from the ecosystem and constantly investing in educating the public and optimizing everything else to give off an equal or close enough sense of welcoming social concepts or cultures is the way to fix this self-serving infinite money glitch.
Posted Using INLEO