Recent stock and crypto markets downturn got me thinking, if the unusually synchronised movements is a sign of a systemic risk that has been widely evenly spilled, getting ready to become a glacial surface that would send global economy in a free fall. Or if there is indeed a powerful adversary with hands dipped in all markets, shaping the outcome to his/her or their will?
Original Max Entropy used to mention global banking collapse as a leading cause of Ripple's (and, subsequently, XRP) demise. So I brewed a decent-sized pot of herbal tea and dove in the prominent 'conspiracies' to get an inkling of what might happen.
I am no Taleb, but I have been living in a country, that honestly should have had a black swan as a national symbol instead of a crane. Everything that could go wrong, went wrong. That eerie feeling of an impending collapse suspended in time pierces all aspects of one's life. A personal experience of several bank runs, two instances of hyperinflation and some textbook economy collapse should serve as a sufficient canvas to model the topic of discussion.
Only ~8% of money is in cash in USA. The first three days people manage. By the end of the 7th, when it is not possible to log into your bank account, riots begin. Government announce the plan to utilize FEMA and National Guard to distribute food rations.
By the end of week 2, all shelves in stores are empty or looted. Curfew is imposed. People begin to use gold or medicine as a barter token.
By the end of week 3 the economy is barter-only and highly fractured. People utilize alcohol beverages an antibiotics as a currency of sorts. And guns ammo.
But what if there was a sufficient number of users of cryptocurrency during such a calamity? Provided the electricity and internet remains intact, how would people act?
Venezuela, while retaining a working banking system, is a peculiar example of societal shift towards alternative mediums of value. Emergence of PepeCash as a prominent currency, amongst high governmental scrutiny, demonstrates that intangible assets gain sufficient trust to enable economic relations, especially when it is dangerous to carry physical gold or cash due to high criminal activity.
I came to believing that corporate entities, when faced with the urgent need for alternate transactional system, will turn to tokens that allow for trustless settlement. Especially after the initial wave of breaches of contract, citing great financial calamity and act of god as a sufficient reason not to act on their part of the deal.
This could become a melting pot of crypto-currencies, that would eventually establish the foundations of the new world finance. Something tells me, that fiat will suffer a powerful blow of confidence. The question is, if by the end of the month the banking is back on, and all could go on as 'business as usual', what would eventually triumph: the habit/ease of use, or innovation? Will XRP be tainted by bank's failure?