How will competitors react? It may push them to adopt a common standard to fight Facebook. Bitcoin? Depends on the regulations and if they can go down that path.
Long term I don't think any of this hurts Bitcoin's store of value proposition. Nobody is able to compete against that.
Have to think it hurts Ethereum. Is there a chance that Ethereum gets "co-opted" by other Big Tech and becomes compliant. Easier to co-opt once POS takes place.
So where does that lead us?
Much depends on how tough the regulations are. If the regulation is very tight and Diem can't really interact with existing crypto, then it might not achieve much other than a glorified Apple Pay. Maybe you can custodially hold Bitcoin on your Facebook wallet.
What if you can trade Diem DeFi? Might be the smarter move for the Govt to initially at least allow that, and then down the line tighten up. Small government control steps probably wins the game.
I have a suspicion that the administration is "working with" Facebook.
Suppose the administration unveils tough new crypto regulations along with a complaint Diem being rolled out.
Facebook gets a 3 billion person monetary network, and the US gets shared surveillance with Facebook.
It's a smart move for both of them.
This would explain why the rumors of other big tech looking into crypto.
Would explain Bukele's "United Fruit" tweet.
Explains Yellen's rush.
So where does that lead us?
The market relentlessly drives everything toward its cost of production.
If a new gold mine is found and the production cost of gold is halved, the market price of gold will be driven toward that new price.
Fiat currencies always go to zero given enough time because it's their cost of production.
Proof of Stake's cost of coin production is likewise zero. The market will find a way given enough time.
This is a test for proof of stake blockchains.
No matter how complicated, ask the proponent "How do I know for sure I'm connected to your POS chain?"
This question, cuts through all the complicated mumbo-jumbo in a POS white-paper.
The only solution for POS blockchains is to have an authoritative source for connecting to the chain. There is no way to simply look at a POS block and know it is authentic. It's not inherent in the block.
You are open to hackers with POS, unless you centralize.
"Bitcoin "mining" is equivalent to the job of digging a hole and filling it back up."
When you connect to a blockchain, how do you know a hacker isn't in your computer/router/isp giving you fake blocks?
If you rely on a source to tell you where to connect, that blockchain is centralized.
If you give me one #Bitcoin block, I know it is authentic. The cryptographic puzzle solved in this block is so hard, that there is only 1 computer system in the world that could have solved it: #Bitcoin
Single-handedly defeated the Nazis in WWII using my brain.
Bitcoin Maston Instance