Equity money
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Equity Money Explained by Experts
Commodity vs Equity Money
Financial expert delves into the differences between commodity and equity money within digital realms. She explains that commodities are rare and immutable, unlike equities which can be created in various ways. According to Alden, Proof of Stake systems lean more towards equity-like characteristics due to the need for governance and the influence of capital holders. In contrast, true decentralized commodities in digital finance remain scarce and difficult to create 1.
Equity Funding in Banking
Professor of Finance and Economics, , highlights the importance of reducing indebtedness and increasing reliance on equity funding for a stable financial system. She contrasts equity with debt, where equity represents a stake in future profits without guaranteed returns. Admati stresses that while corporates often fund investments through equity, banks prefer higher debt levels, which she critiques 2.
Building Equity Value
David Friedberg from the elucidates how building wealth involves creating equity in oneself. He stresses the importance of compounding equity value by growing skills and client bases, as it leads to more options and potential for increased wealth over time. supports this by comparing the limited earning potential of hourly wage jobs to the unlimited upside of equity ownership in businesses 3.
These insights from experts provide a comprehensive view of equity money, its applications, and its importance in both personal and corporate finance.
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