Another day, another crypto currency implosion. I’m sure by now you’ve heard about FTX and the Ponzi scheme they were running. Well to be honest I don’t know if it was a Ponzi scheme, some other type of fraud, or just true incompetence. Either way, once again we see that billions of dollars of crypto assets have disappeared overnight. Poof! Into thin air.
I haven’t done a lot of research into the situation, but this, along with other high profile crypto collapses highlights one of my biggest problems with most forms of crypto currency, they aren’t backed by anything tangible and they seem to disappear with alarming frequency.
Today FTX and crypto currency is getting all the publicity but how long until the currency of a G20 country goes “poof!”? How long until the mighty US Dollar goes “poof”? As we all know, the gold standard is long gone. In 1944, the Bretton Woods agreement pegged the US Dollar to gold and all other participating countries to the dollar. In 1971, our currency was unpegged from gold. Now our currency is backed by… exactly squat. Oh, oops, I better not say that too loud or they’ll call me a “currency denier”… Or I guess, more accurately, a “dollar denier”. (Hmm actually… that might make a good t-shirt!)
No Asset Backed Currencies
Well unfortunately there aren’t any asset backed currencies today that I’m aware of. There have been many throughout history, of course. There may be some in the future. I believe the only way to re-establish faith in a currency will be to back it with a tangible asset such as gold. This is why Russia and China have been huge buyers of gold for their reserves in recent years, they know the US Dollar is on the decline and they are trying to divest from it. I believe it won’t be long before we see an FTX style implosion - with US Dollars. We’ve spent too much and monkey’d with the dollar too long for there to be any other result.
This is why I wrote my Tangible Things blog series and I’m building a company with a focus on using ammunition as a quasi-currency. I know ammunition will never actually replace a national currency or even be as widespread as something like Bitcoin, but ammunition does have three things going for it: It is tangible - you can touch it and hold it in your hand unlike crypto currency or whatever is backing our fiat dollar (“hopium?”). Second, it is useful. You can use ammunition for practical things like hunting, self defense or just good ‘ol plinking. Third, it is valuable - the value of ammunition will never go to zero unlike the LUNA token, stock in Pets.com, or the currency of Zimbabwe because it is tangible and useful.
Since ammunition has all of those things it becomes a nice place to park your fiat currency or Bitcoin (coming soon on our platform) when you don’t have anything else tangible to buy with it. In other words ammunition is a good “store of value” because you know it is safe and will never, ever go to zero. Heck, I don’t even think we’ll see the days of $0.01 .22LR ever again… sad.
Trade Into and Out of Ammunition
We’ve recently made it even easier to use our platform to trade into and out of ammunition. By adding your bank account via ACH you can add funds, buy/sell ammo, and transfer funds back to your bank account as needed. This makes it a snap to “keep your money in ammo”. Plus, I recently decided to do a test and remove the 5% inventory sell back fee for the month of December - which will make the whole process even easier and less costly for our customers. (Shhh don’t tell anyone… no sell back fee live now. Yeah!).
There is still one small hiccup, or speedbump really, to moving money in and out of ammo… you can’t do it quickly. Why? The infamous “queue” or since we renamed it “pending” status, stands in the way. This is like virtual speedbump you hit when you want to buy 1,000 rounds of 9mm, for example, and have it hit your inventory today.
Spoiler Alert: it won’t.
Pending Status is Annoying but it Keeps Us Honest
This is where I bring the whole discussion full circle back to FTX…
While “Pending” is annoying to many people, it is one of the safeguards we have put in place so that we don’t oversell our inventory, and wind up like FTX. When you really stop and think about what it is, it actually becomes a good thing. It is an internal braking system that tells us that if we have a customer that wants 1,000 rounds of a certain caliber, we NEED to have 1,000 rounds of that caliber backing it up in the warehouse. Even if we don’t expect that customer to ship any time soon, we know the day might come when ammo is hard to find again and everyone wants what is available in their ammo wallet. We saw that in the ammo shortage of 2020 and we survived only because we were conservative and didn’t oversell our inventory.
Of course we learned some lessons too. When we had a gazillion SKUs during the ammo crunch and we didn’t allocate new purchases right away, it wasn’t fun to say “We can’t ship your ammo because it is still in Queue.” I’m sure many of you heard that a hundred times as we waited for stock levels to be replenished. All while we sat in a warehouse full of ammunition, we still had to tell people: “Sorry, we can’t allocate until we get more in.”
Even today, we have SKUs that are hard to find and still in “Pending” while we work on getting enough under our roof to satisfy the backlog. That is also why we discontinued so many SKUs a few months ago. It was better to NOT dig ourselves deeper on calibers that we couldn’t find. A lot of people voiced their opinion to me about that decision but I know it will makes us stronger and bring us closer to where we need to go in the months and years ahead.
The good news is that with the ammo situation getting back to normal our queue/pending is getting caught up. By reducing the number of SKUs we offer, we’ll be able to get ahead, and further reduce pending time (eg: smaller speedbump). Right now, there are only about six active SKUs that have been pending longer than 30 days. Again that is our safeguard against overselling our inventory, so it is a small but necessary speedbump on the road to an asset backed digital ammunition wallet.
So let’s hear it: “Hurrah for Pending! We’re not going to be another FTX!”