In an effort sure to aggravate U.S. politicians exploring digital currencies, Zeppelin — a smart contract auditor for over $600 million USD in token raises — has found two critical issues with… the US dollar. Based on the review, it looks like there may be some fundamental issues with the USD “token” that need to be brought to any investors’ immediate attention!
Zeppelin: USD a Heavily Depreciating Asset
When big-name blockchain platforms such as DFINITY, STORJ, and others look to have their smart contract code audited, they come to the Zeppelin team. The team reviews the code and makes an actionable report of every issue found and the results are sometimes shocking.
Now the team has finally gone under the hood of the US dollar itself and, just as many in the digital asset ecosystem could have predicted, the results are not pretty. The team found in its report that a single dollar in the year 1860 has the same purchasing power as $28.53 in 2018.
Additionally, the fact that its value is not backed by a single asset or commodity since its hard fork away from gold in 1972 might cause worry to potential investors.
The asset is so risky to its long-term holders it’s a wonder the world’s central banks don’t issue warnings against using it, like they regularly do for bitcoin and cryptocurrencies.
Unfit for Global Transfers
Also in the report, Zeppelin questioned the validity of the USD for international transfers, and expressed skepticism of USD token development team the U.S. government’s ability roll back transactions months after purchase.
Despite these issues being found and lack of supporting information from a clear Federal Reserve audit, the Zeppelin team remains confident the USD dollar token will remain a world-leading favorite for years to come.
But as other digital assets and commodities threaten this global leader, it will be interesting to see what world leaders, investors and decision makers do in response to any sign of it losing value.
Do you believe that thinking about the U.S. dollar as a token and comparing it to the properties of other tokens make for a good way to evaluate digital assets?
Images via Pixabay
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