There are now two types of PayPal dollars, and one is better than the other
Come on folks, neither the author of the post nor any commenter I&#x27;ve seen here as of writing is arguing that we want any more tulip-scam crap or another FTX, which is probably the highest-profile and clearest-cut instance of financial fraud since LTCM or something: everyone is on the same page that we don&#x27;t want any more pump-and-dump nonsense from crypto hucksters.<p>But <i>punishing good behavior</i> is a terribly idea at all time and in all places: whatever combination of Paypal, and the regulators, and this Paxos outfit that have decided to <i>raise the bar</i> on Internet money compared to forms of Internet money that we&#x27;ve all taken for granted since forever? That&#x27;s a good thing.<p>It&#x27;s very complicated in the details, but roughly, fractional reserve lending done by traditional banks and the money supply created thereby only works because it&#x27;s in fact enmeshed in an a stupendous net of regulations, and guaranteed by things like the FDIC, and a bunch of stuff. Fractionally-backed, loosely-regulated Internet money is a very bad idea whether it&#x27;s stored in MySQL or a blockchain.<p>If Wall St. has show us anything since 1987 at least, it&#x27;s that if we don&#x27;t keep them on a very short leash, they&#x27;re going to blow up the economy and stick John Q. Taxpayer with the bill as often as possible. This is true whether the database is DB2 or a ledger, which is one of the key points the author makes.