The United States government is in full attack mode of [cryptocurrency](https://leofinance.io/@leoglossary/cryptocurrency).  It appears the politicians and bureaucrats sense there is a major threat from this new industry.  For that reason, it is time to stamp it out.

Technology investor [Chamath Palihapitaya has even gone as far to say "Crypto Now Dead in America"](https://dailyhodl.com/2023/04/23/crypto-now-dead-in-america-as-us-authorities-target-nascent-industry-says-billionaire-chamath-palihapitaya/).  He believes the attacks are going to destroy the industry within the U.S.

At the same time, you have people up in arms about [central bank digital currencies (CBDC)](https://leofinance.io/@leoglossary/leoglossary-central-bank-digital-currency-cbdc).  Most believe this is what [governments](https://leofinance.io/@leoglossary/leoglossary-government) will instill and that will become the [currency](https://leofinance.io/@leoglossary/leoglossary-currency) everyone uses.  Of course, many of these people are predicting the immediate demise of the [US dollar](https://leofinance.io/@leoglossary/leoglossary-u-s-dollar).

It is understandable where people get these ideas.  Sadly, these individuals understand [money](https://leofinance.io/@leoglossary/leoglossary-money) and the last 70 years, they would realize how foolish these ideas are.

In this article we will explore what is being created.

<center>![image.png](https://images.hive.blog/DQmRMTKsdTARWPtyHbptzqinfkBCWnKjU1VE3648uywCDUn/image.png)
[Source](https://ibkrcampus.com/wp-content/uploads/2022/11/Screen-Shot-2020-09-10-at-11.32.06-AM.png)</center>

## Decentralized Monetary System

Tell me if this sounds familiar:

* decentralized
* outside of government
* private
* non-central bank
* [digital](https://leofinance.io/@leoglossary/leoglossary-digital)
* peer-to-peer
* global
* thousands of [nodes](https://leofinance.io/@leoglossary/leoglossary-node)
* ability to create money

When looking over the list, one might conclude this is referring to Hive.  At a minimum, this describes cryptocurrency.  

Actually, these are all characteristics of the [Eurodollar system](https://leofinance.io/@leoglossary/leoglossary-digital).  This is a monetary system the [banks](https://leofinance.io/@leoglossary/leoglossary-bank) established, starting in the 1950s, that became the primary driver of global [trade](https://leofinance.io/@leoglossary/leoglossary-trade).  While most focus upon [the Fed](https://leofinance.io/@leoglossary/leoglossary-federal-reserve-bank-the-fed) and politicians, very few look at the biggest elephant of them all.

The reality is the international banking system set up a decentralized [monetary system](https://leofinance.io/@leoglossary/leoglossary-monetary-system) that was outside the reach of any government or [central bank](https://leofinance.io/@leoglossary/leoglossary-central-bank).  It still operates under their nose and there is nothing the establishment can do about it.

Of course, since the banks are involved, we can make the case it is part of the establishment.

That said, we have the road map of what a global, decentralized system can do.  The belief that cryptocurrency can be stopped is ignoring the biggest monetary system in the history of the world.

## Ledger Based Money

Like the central bank monetary system, we are dealing with [ledger based money](https://leofinance.io/@leoglossary/leoglossary-ledger-based-money).  Make no mistake, there are few (if any) actual dollars in the system.  Instead, the [medium of exchange](https://leofinance.io/@leoglossary/leoglossary-medium-of-exchange) are assets like [LIBOR](https://leofinance.io/@leoglossary/leoglossary-libor) future contracts that are utilized in the same ways as currency.  Owe another bank $5 million; send them LIBOR reds.  

Nobody knows exactly how large this system is.  Even determining the daily [transactions](https://leofinance.io/@leoglossary/leoglossary-transaction) is just a guess.  While there is a custodian for the [Repo](https://leofinance.io/@leoglossary/leoglossary-repurchase-agreement-repo) market, many arrangements are [peer-to-peer](https://leofinance.io/@leoglossary/leoglossary-p2p).  Two banks make an agreement, outside the eyes of anyone else.

How did the system grow?  Over the years, it was through the creation of different products.  Naturally, we do not phrase it in that manner.  Instead, we call them [mortgage backed securities](https://leofinance.io/@leoglossary/leoglossary-mortgage-backed-security-mbs) or interest rate swaps.  Whatever the asset, the Eurodollar system used it as [currency](https://leofinance.io/@leoglossary/leoglossary-currency).

Which brings up the next question: where did the value come from?  How did they create money and it not be worthless?

The answer is the same as always: it is based upon economic productivity.  Most activity within the Eurodollar system is tied to global [trade](https://leofinance.io/@leoglossary/leoglossary-trade). In fact, estimates are this funds over 90% of that on an annual basis.  As the [balance sheets](https://leofinance.io/@leoglossary/leoglossary-balance-sheet) of these institutions expands, i.e. they have more quality [assets](https://leofinance.io/@leoglossary/leoglossary-asset), the greater the ability to fund global growth.

Of course, as balance sheet constraint took hold, the opposites started to happen.  Global growth slowed over the last 15 years due to the [deflationary](https://leofinance.io/@leoglossary/leoglossary-deflation) cycle this system is in.

## Hive Is The Eurodollar System

Look at the above list again.  With the exception of the thousands of nodes, it describes Hive.

So Hive is the Eurodollar system.  The difference is that, instead of creating reserveless, private bank money, we are omitting the banks.  

<center>![image.png](https://images.hive.blog/DQmcMqaWgbvx1erq3wEXqD5PSq78KZ6njb5Wx2YrsnTBN4y/image.png)
[Source](https://tse2.mm.bing.net/th?id=OIP.WLCiIzGM6GnUoHIIm7bHDwHaEK)</center>

The development of multiple [smart contract](https://leofinance.io/@leoglossary/leoglossary-smart-contract) platforms on Hive is vital.  This will allow for the decentralized [financial services](https://leofinance.io/@leoglossary/leoglossary-financial-services) that cannot be regulated or have intermediaries.  When an application is built using venture capital money, that is not [decentralized finance (DeFi)](https://leofinance.io/@leoglossary/leoglossary-decentralized-finance-defi).  The business model is such that there are [intermediaries](https://leofinance.io/@leoglossary/leoglossary-intermediaries-financial) in the system.

Hive can eliminate this through both base and [second layer](https://leofinance.io/@leoglossary/leoglossary-layer-2) development.

When the design of something is meant to be such that is can be easily duplicated, i.e. [open source](https://leofinance.io/@leoglossary/leoglossary-open-source), it becomes a very powerful mechanism.  This makes life for the overlords impossible.  While they can target a few entities, the issue can quickly get too large. 

For example, how can any government stop the swapping of [$HIVE](https://leofinance.io/@leoglossary/leoglossary-usdhive) and [HBD](https://leofinance.io/@leoglossary/leoglossary-hive-backed-dollar-hbd)?  There is an [internal exchange](https://leofinance.io/@leoglossary/leoglossary-internal-exchange-hive) that runs on the [base layer](https://leofinance.io/@leoglossary/leoglossary-base-layer-blockchain).  Hence, there are over 100 nodes spread throughout the world which house the [software](https://leofinance.io/@leoglossary/leoglossary-software) (ledger).  Perhaps they could target the [front ends](https://leofinance.io/@leoglossary/leoglossary-front-end) and block them.  This, however, is an issue since we have this site:

<center>https://hivehub.dev/market/swap</center>

Here we have the internal exchange.  The challenge is this is open source.  Therefore, anyone can set up a site.  What happens if 10 [developers](https://leofinance.io/@leoglossary/leoglossary-developer) decide to set up 10 sites each.  

This is the power of open source and [decentralization](https://leofinance.io/@leoglossary/leoglossary-decentralization).

The bottom line is the likes of Elizabeth Warren would love to get their hands on the Eurodollar system and stop these greedy banks.  Of course, that would collapse the global [economy](https://leofinance.io/@leoglossary/leoglossary-economy) is ways that are even worse than what is taking place now.  

Nevertheless, the lesson is clear: **there is nothing they can do against a global, decentralized monetary system**.

It gets even worse,  The Eurodollar system is closed, only available to international [financial institutions](https://leofinance.io/@leoglossary/leoglossary-financial-institution).  With cryptocurrency, we are looking at a realm where anyone can participate.

There are 5.25 billion on the Internet, all of whom could become money creators and interact with a decentralized, global system.

Hive is a part of this system and is mirroring what took place in the early days of the Eurodollar system.

In the end, the politicians and bureaucrats will lose.  They are not designed to take on such an endeavor.

___
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