Shiba Inu can be like a wild banknote, which is not a terrible thing

Recently, one of the main news specific to Shiba inu (CCC:SHIB-USD) is that the underlying team has released a beta of their Decentralized Autonomous Organization (DAO) with the goal of giving SHIB users greater control over cryptocurrency projects and pairs on the ShibaSwap platform.

Source: Maria Shipakina / Shutterstock.com

The point of mentioning this is not to get into a discussion of DAOs, which Cooper Turley, a subject matter expert, describes as “an Internet community with a shared bank account.”

Rather, I would like to address a much more fundamental point: Shiba Inu, as his creative team mentioned, is not just a coin.

The community is legitimately trying to create an ecosystem around SHIB tokens. For many, it’s reminiscent of when the United States had its own proliferation of private currencies, with the most offending variety labeled as wild banknotes.

Although the sources that I have used to draw comparisons between cryptos like Shiba Inu with the private notes of the time seemed to suggest that decentralized currencies lead to failures, I have recently found other sources that do. vehemently oppose this characterization.

Some even go further, offering a rather diametrically contrasting point of view.

Perhaps the most credible of this overhaul of private or wild notes comes courtesy of Lawrence H. White, senior researcher at the Cato Institute and professor of economics at George Mason University since 2009. White has provided evidence that both United States that around the world, private currencies have had a to success mandate.

Notably, White mentioned that Canada had a lightly regulated banking system until 1935, when the country established a central bank. Until then, Canadian banks have remained strong despite various economic troubles, including the paradigm-shifting Great Depression.

Can SHIB and other cryptos provide a modern equivalent?

Shiba Inu is not 100% speculative but maybe quite close

Citing the work of economic historian Kevin Dowd, White noted that the supposedly true record of most historic free banking systems was “considered a reasonable, sometimes quite remarkable, success.”

Additionally, White wrote the following:

Specifically, [Dowd] note that they “were not prone to inflation ”, showed no signs of natural monopoly and stimulated economic growth by improving the efficiency of payment practices and intermediation between savers and borrowers. These plural note systems emit that were Panic-prone, like those in the pre-1913 United States and pre-1832 England, were not because of competition but because of legal restrictions that severely weakened the banks.

In this context, which, according to White, is the exact image of what is called the wild bank, it seems that Shiba Inu could benefit from a historical precedent, for lack of a better expression. It appears then in the analogue age as now in the digital age that people prefer “efficiency in payment practices and in intermediation between savers and borrowers”.

If that’s honestly the case, then maybe – just maybe – Shiba Inu could survive and thrive as a digital asset and ecosystem. And if not SHIB, certainly other renowned cryptos.

However, I still think people should be extremely careful with Shiba Inu and all other virtual currencies. While I may have to concede some points from my earlier arguments – given those revelations I wasn’t aware of earlier – I remain troubled by the idea of ​​investing too heavily in decentralized protocols.

It is almost certain that the successful wild banknotes had stable valuations that were acceptable to both parties at face value. But when valuations can fluctuate at a magnitude of 50X, such volatility inherent in many speculative cryptos does not look encouraging for long-term viability.

The debate is not quite over

Among critics who compare banknotes like the Shiba Inu to wild banknotes, George Selgin, senior researcher and director emeritus of the Center for Monetary and Financial Alternatives at the Cato Institute and Emeritus Professor of Economics at the University of Georgia, appears be the most upset.

Among other claims, Selgin claims that the wild banking scandalous stories are exaggerated. If this is really the case, he has every right to be upset.

The problem for me is that if wild banking weren’t so damaging to the American monetary system – or if it was a positive experience to go to the other end – these “contrarian” researchers have serious concerns. battle to be accomplished.

For example, the official Nebraska government website notes how wild notes “issued by certain Nebraska territorial banks have caused considerable financial instability.” It is possible that the pro-savage researchers (my term, not theirs) are absolutely right. However, I will find it difficult to contradict the statements of a state government.

At this point, I think the one thing we can universally agree on is that when it comes to studying history to determine the future trajectory of risky investments like Shiba Inu, due diligence does not occur. is not negotiable.

I have presented both sides of the argument. The rest is up to you.

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Read more: How to Avoid Popular Cryptocurrency Scams

As of publication date, Josh Enomoto did not hold (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

Former Senior Business Analyst for Sony Electronics, Josh Enomoto has helped negotiate major contracts with Fortune Global 500 companies. Over the past several years, he has provided unique and essential information for the investment markets, as well as for various other sectors, including law, construction management and health.

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