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The author Jp Koning
Jp Koning
Working in the bowels of the finance industry. Blogging about monetary phenomena is my side gig.

JP Koning: Moneyness

Moneyness is an economics blog by JP Koning about economics, money and finance. He adds an unique perspective to money-related issues, and explains everything very clearly, this combination sets him apart.

Why do ransomware gangs like bitcoin? It’s the censorship resistance

A new type of crime has recently emerged: big-ticket repeatable ransomware. Bitcoin is the chosen payments method for ransomware gangs. But these gangs don't use bitcoin because it is anonymous. They've chosen it because it is censorship-resistant.Here's a quick illustration of how ransomware works. A university's servers are encrypted by a ransomware operator. Common victims also include corporations, hospitals, or police departments. Only a payment of, say, $1.14 million in bitcoins will...

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A bronze currency in ancient Europe?

Metal scraps from a soldier’s pouch found at the Late Bronze Age battlefield of Tollensee Valley (source)1) Last month I wrote about hacksilver currency in the ancient Middle East. This month I thought I'd share some fascinating archaeological research exploring what Europeans may have used as money during the Bronze Age.2) By Bronze Age Europe, what is generally meant is the period beginning with the first appearance of bronze, a product of copper and tin, in southern Europe around 3000 BC...

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The overconsumption theory of bitcoin (and decentralization in general)

Bitcoin mining farm (via CoinDesk)There are two extreme theories about cryptocurrency energy consumption, both of them bitterly opposed to each other. The first I'll call the big waste theory. Cryptocurrencies such as Bitcoin and Ethereum serve no useful purpose. Yet they are sucking up huge amounts of useful electricity. Let's ban them. The second theory is the vital cog theory. Cryptocurrencies are a useful bit of global financial infrastructure. And so the huge amounts of energy that they...

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A nickel is worth more than a nickel

Having just emerged from the fiasco of last year's coin shortage (which I wrote about here and here), the U.S. Mint has a new problem on its hands. The melt value of the nickel, or five cent coin, has suddenly moved higher than the coin's face value.Thanks to the big rally in copper prices, a nickel coin is once again worth more than 5¢ https://t.co/2ZEkkxqEVR pic.twitter.com/2O2ce0eccN— John Paul Koning (@jp_koning) May 5, 2021 The melt value of a nickel refers to the market value of the...

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Is DeFi unregulatable?

 Government's can't regulate DeFi, can they? It's too wild and uncontrollable.DeFi, or decentralized finance, is the set of anarchic financial tools built on top of the Ethereum blockchain. These tools mimic what you'd see in the real world. MakerDAO is a decentralized bank, Compound and Aave are decentralized lending marketplaces (like Lending Tree), and Uniswap is an exchange, like the NASDAQ, except on a blockchain.Unlike regular financial institutions, none of these Ethereum-based...

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Why did Dogecoin take off but Feathercoin didn’t?

Dogecoin makes us all shake our heads. Introduced in December 2013 as a joke, Dogecoin is now worth over $50 billion, more than Ford Motor Co. Meanwhile Feathercoin, a more serious cryptocurrency that debuted in April 2013 (and initially worth more than Dogecoin), is currently valued at a tiny $10 million.Here's the December 2013 list of top cryptocoins. After the first 3, all of them are pretty much dead/inactive except for the one that was started as a joke and is now worth $17 billion....

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The Biden stimulus and the big jump in cash

Since mid-March, the stock of U.S. banknotes has surged by $45 billion. That's a 2.1% increase in just 30-days.  This jump surprised me (ht to David Beckworth, who brought it to my attention). That's because cash demand patterns are typically quite predictable. We always see a seasonal Christmas/New Year's rush for cash. After Christmas vacation is finished the stock of cash always falls as notes and coins are returned to banks. For the rest of the year the stock of notes slowly rises....

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From Circle-of-Gold to Mega$Nets to Bitcoin

We tend to dismiss chain letters as mere scams or frauds. In this post I want to get readers thinking about chain letters as a type of financial innovation, one that has been steadily updated over the decades.Chain letters are lists. That list is governed by a rule: the first people on the list are to be paid by the latecomers. The chain letter stop working, or paying out, when no one else wants to join up. The amount of money flowing to early-birds who joined the list is equal to the amount...

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Hacksilver

1. Over the last month or two I've been following an interesting archaeological debate over the discovery of coinage. I thought I'd share it with you.2. It's generally accepted by archaeologists and numismatists that the first coins were invented in Lydia, modern day western Turkey, in the 7th Century B.C.E. (i.e. 610 B.C.E. or so). The idea quickly spread to Greece. The Lydians used electrum, a strange silver/gold mix, to make their discs. (I wrote about electrum coins here). I've included...

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Tether, a bigger badder PayPal

My recent article on Tether, a stablecoin, was just published at Coindesk. In the article I commented on Tether's recent settlement with the New York Attorney General's office. Because the settlement forces Tether to adopt a bunch of new practices, I think it's a win for stablecoin consumers. Why have I been focusing so much of my time on Tether stablecoins? Diligent readers will recall I wrote about it twice last month. (1 | 2 ).First, I've been writing about stablecoins for a long time...

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