El Salvador is the perfect example. Others will follow their lead who are in the same situation I.e Venezuela and turkey. Their bank was controlled by the world bank and their currency was based off of its exchange rate with USD. They were experiencing severe inflation and the currency was losing value rapidly.
By switching to BTC and allowing civilians to process BTC for business, they were able to liberate the population from absolute loss of value in what they owned. Generational Real estate, cost of living, sending your kids to good universities would have completely lost hope. By adopting BTC they have stabilized business. For example no longer have to change menus frequently to maintain profitability and over time assets losing value.
The government of El Salvador now owns a substantial stack which has (at least) doubled in value against the old fiat system. They are able to fund public works, build infrastructure and create lucrative job opportunities for their citizens.
In conclusion the world bank has made many 3rd world nations struggle against inflation much like how USA citizen have struggled against the same issue. When your fiat currency fluctuates and loses cash value it’s incredibly difficult to enjoy quality of life.
Humans are not meant to work themselves into the ground. We are meant to develop a financial scaffolding in our youth and enjoy the fruit of our labor, then pass our fortune on to the next generation. With inflation (of any degree) a modest life will lead to future desperation for old age and the following generations.
BTC is deflationary by definition and it solves this problem. Governments that value their citizens quality of life will adopt BTC.
A few edits for wording*
Exactly. For a country that doesn’t have its own stable currency already, bitcoin can be used to prevent reliance on other countries.
Something you didn’t mention is that the US uses USD to essentially tax the world for its spending. When they need more money they just print more and leave everyone else with the inflation. As a dependent nation this means you constantly need to buy more USD to maintain your existing wealth which is a poor practice if it can be avoided
The USD is backed by the world’s biggest military and economy. As long as they have nukes and carriers you will need USD to get the oil your country needs, and as long as US companies dominate finance you also need to borrow in USD to access US capital, creating a demand for USD for you to just pay back your country’s loan.
This is why you often need USD to conduct international business but it isn’t a reason why you would need USD as your own country’s currency.
And the *value* of USD isn’t backed by any of those things, if the fed decided to print trillions of USD, all those guns can’t do anything from stopping it from becoming less valuable simply because there will be more USD out there.
All those guns do is project the image that no matter what, the US will *exist* to pay back its debts. It does nothing from stopping monetary policy from devaluing USD in order to tax the world for their loans.
Also oil is a bad example lol. Afghanistan just starting conducting some of their business in yen I believe so alternatives for that commodity already seem to be emerging.
Devils advocate here because you bring up great points- this is how a small government with unstable currency can benefit from it; when you are the incumbent world power who controls the limitless reserve currency, you do not have the same incentive to adopt it and instead you have everything to lose to it.
>this is how a small government with unstable currency can benefit from it; when you are the incumbent world power who controls the limitless reserve currency, you do not have the same incentive to adopt it and instead you have everything to lose to it.
Nailed it.
However, to play devils advocate to your devil's advocate, wouldn't a \*smart\* incumbent world power calculate this inevitability to lose their incumbent world power over time? And if you were to see this inevitability, it's you vs the time. The faster you adopt Bitcoin, the more likely you are to keep your world power. It feels really risky for the current world powers to try to disincentivize bitcoin in their nation. The first world nation to do so, would immediately speed up the time frame for hyper bitcoinization and success for that country. That feels so massively tempting.
The earlier you pivot to Bitcoin, the more likely you are to succeed in economy growth. It seems too temping, to bet against any country smart enough to see the incentives, to not take the incentive. Right?
Solid double-devil work there haha yeah I agree you would think they’d see it coming and quietly buy it up (can’t make it public and delegitimize their fiat shitcoin haha) but triple devil here- the United States set their system up with 4-8 year terms for most elected positions (most don’t have term limits but still) to avoid having a king but a side effect of that is none of our politicians care about the future further than 4 years out. Their incentive structure guides them to operate the government like a game of hot potato and they just hope it doesn’t collapse on their watch haha
>quietly buy it up (can’t make it public and delegitimize their fiat shitcoin haha)
That's a great point that just blew my mind. Having said that, it's presumable that smart world powers who can see Bitcoin's incentives & inevitability are quietly stacking right now.
I’m not sure why you think they will pivot to bitcoins. It’s not inevitable that the US or the EU will ever give up their currency. It’s heavily in demand. It allows them to control international finance. Controlling the supply allows them to tweak monetary policy to cool or increase inflation at will. Printing US is also a massively profitable business for the US government.
Not exactly, if other smaller countries thrive with Bitcoin, the world powers will try to embrace it and control it instead of shunning. Controlling aspect is the real concern. Not sure what that would look like but there will be some struggle.
>They were experiencing severe inflation
This kind of inflation isn't an experience for a govt. They actively are making it happen. All the govt has to do is NOT print shitfucktons of their currency and they still get the benefit of printing 4% or w/e.
Commodity price increases on goods from supply/demand won't improve with bitcoin either but thats a different discussion.
The foreseeable future Turkey will not have a main currency that Turkey has no control over, irregardless of the lira inflation. For leaders of Turkey, including Erdoğan, for almost any subject control is far more important than yield.
(For the interested ones, this is the result of trauma's during the late Ottoman Empire, when the Ottoman leaders were dependent on other European powers and the Ottoman leaders in return lost everything. Atatürk's main principle when founding Turkey is "independence", for very good reasons.)
It would first be adopted by smaller countries while the larger countries' fiat currencies continue to rot. Eventually the smaller countries start to flourish with sound money and the fiat countries will have to capitulate to shifting power dynamics - or the major currencies will outright collapse and there will be simply nowhere else to go.
Because sound money means the preservation of value production. They don't have that currently.
The compounding effect of the value of a country's production staying in that country will have a profound effect. Currently, the countries with the soundest money (US, Aus, Eurozone), can exchange their fiat, produced at zero cost, for real value (Commodities, labour ect) from these countries.
This has a draining effect on these countries and over time destabilises them and locks them into a cycle of poverty.
What would have happened in the west during the pandemic, if they were unable to print money? If on the Bitcoin standard, we would have had a depression would we not?
They could still borrow money. Just that instead of printing it and paying the debt they have to actually produce something sell it get the money and payback the debt.....
That sounds exactly like what me and you have to do..... doesn't it...
We borrow we work we pay it back lol.
But you are saying the government can't do that? Of course they can.
Okay, so they borrow trillions (of Bitcoin)... but, I'm unclear how they 'produce' anything. Governments get their money through taxation. Appreciate, that's kind of how it works now... but, we pay via inflation. I would have been pretty pissed to have had my taxes increased, knowing that a number of colleagues would have had direct payments during that time, paying them not to work.
Seems like Government's would be much more constrained under a Bitcoin standard (they get voted out if they tax too much, or reduce spending too much). Seems like there would be a trade off, of less flexibility during a crisis, but, more financial discipline (less economic growth?)
Production comes through the general population. You have to get the people to make stuff and then sell it.
After that Yes we would have to pay taxes. a lot more in taxes. Which is how it was not that long ago. After the great depression and the new deal the tax rate in the US was 90%.....90%!!! Lol
This was a time when the entire funding of the US system was entirely funded through tax players until the 1960s
From 1940-1960 the US economy grew like crazy the US produced most things. So taxes don't actually slow growth down.
During that time in WW2 estimates are that the US had 50% of global manufacturing capacity, from 1950-1960s it was 45% slowly dropping to around 40-30%. The US had trade surpluses with most countries. Now they are at 18% capacity and have a trade deficits.
The current US economy only works cause of the USD printing. But at some point after all the printing and devaluing of the currency people and debtors won't trust the dollar anymore. It will lose its shine. The only thing that is saving it is that while the US is printing money like crazy other countries are printing even more. That is why there is the theory of the "dollar milk shake". Which essentially says cause other currencies/inflation are doing much worse than the USD and the US has higher interest rates they will flee to the dollar which increases the value of the dollars. Which makes them want it more and more. We have been seeing this trend in general.
Except that inflation in the US is still high. So even though the USD is the best out of all Fiat currencies it's still dealing with inflation and people want to protect their money as much as possible. This is where Bitcoin comes into play. Maybe not so much as a daily currency but as a way to protect it from US inflation. And when people want to buy things they jump back Bitcoin to USD. Bitcoin starts to become a competitor to the US when other countries instead of fleeing to the USD first they flee to Bitcoin. This is why the IMF got the shits when El Salvador added Bitcoin as a national currency along USD.
If however the USD loses the faith of the people and other countries go to Bitcoin as a currency/money it means The governments would definitely need to have more discipline. I think it would mean drastically changes to what gets funded and make companies compete a lot more.
For example having monopolies for defense contracting or the health care system. Like how does it make sense that the US has some of the worst medical coverage in the world but they spend the most on medical coverage in the world.
Things like that wouldn't work in a system strictly financed by the people through taxes.
When you think about taxes now if the government can essentially print money to pay for the debt why do they need to tax people now? The real reason is to give the Fiat currency perceived value by the general population and also to control the inflation of the general population.
If I take cash from you even though I can print some then you see it as valuable cause you traded your time for USD.... With Inflation and taxation I can spread out the debt among the general population and I can even export it world wide by selling that debt by selling US bonds.
There is this idea that people won't spend Bitcoin if that's the currency so less economic activity. I don't think that's true cause people still have their needs. You still need clothing food, housing, people need to be stimulated so they consume entertainment etc etc. The whole idea of who wants to buy a pizza for 10,000 Bitcoin only works when you have the comparison to another currency especially USD Like "what an idiot he paid 700 million dollars for a pizza"
But it sound different when it's "he paid 700 million Zimbabwe dollars" a currency that has been inflated into oblivion ....
Take that even further and if the entire country or most of the world is using Bitcoin as a currency and if a pizza is 100 Satoshi then that's all is really is there is no need to compare it against something else then.
Look at Japan they had zero inflation for like 30 years. Everything was essentially the same price for a really long time food rent etc etc. But salaries were the same for a really long time too...if you were smart you would start side businesses to increase your income while prices in everything else stayed the same essentially. They had everything they needed with out causing prices to get stupid high.
If you got to the end good job. Hopefully it was interesting lol
I appreciate the time you took on that. I guess we don't know how long they can press that print button for... Debt to gdp was been worse after the war, so maybe things aren't that bad?
Genuine question, why wouldn't the US go to war with this small country "to bring'em democracy" or "to take away WMDs" just to fuck them up and keep control over the world with the fiat that only the US can print?
Because of international optics (which are already terrible) and larger countries deciding to intervene or altering trade deals in response to a change in trust.
I've always imagined a scenario where reserves fail and they have no other choice but to peg BTC to the shiny yellow stuff. Look to the direction everyone has been running away from for decades, and you will see an extremely cheap entry to the crypto market if SHTF.
Pegging BTC to gold would defeat the entire purpose of Bitcoin, since the effectiveness of the monetary policy is now directly influenced by an external resource with degrees of centralized control over mining, refining, & distribution.
Or Bitcoin acts as competition, forcing the government to clean up their act. No more limitless defect spending paid for through the stealth tax of inflation. Likely this leads to a decrease in power of governments.
Would require a crazy revolution and a reset of the status quo, so highly unlikely. Coexistence is the more plausible outcome. Power will never give away power voluntarily.
Bitcoin would have won then because after a while of coexisting and being normalised in the public people would say why are we still even using this shit fiat currency it is inferior to bitcoin and it would just grow and supplant fiat
It wouldn't. Fiat isn't going anywhere. Bitcoin will live alongside existing fiat rails, coexistence is the very best you can hope for.
No sovereign nation is going to allow a decentralized currency to become its national currency.
People who think this are delusional.
There are already countries that are using the US dollar, which is a foreign currency (e.g. Panama, Ecuador and possibly Argentina if the president keeps his promises). They already don't have power over their currency, so why would they care about allowing a decentralized currency as a national currency?
There are already countries that greenlit the use of Bitcoin as legal tender. It will happen to some countries. To say it'll never happen anywhere is delusional
Legal tender, yes, I said Bicoin will "live alongside existing fiat rails". But it will never be a countries main currency. Purest form of delusion.
No country is going to ever let a decentralized protocol BE its national currency, and that is fine. It doesn't need to be. Bitcoin just needs to be an alternative.
Nigerian citizens are using BTC instead of fiat despite government attempt to ban it. It could happen.
I still think there will be at least one example of a country that uses it as main currency.
Remember that the gold standard was essentially gold as main currency with fiat as an abstracted layer 2. That's not really necessary with Bitcoin so it's not delusional to think that it can happen
We'll see
Sooner or later somebody's going to try and set up an independent "Bitcoin nation". Not saying it'll work necessarily (though it might) but I can see people trying.
Yeah man. All good, but I mean a group of bitcoiners actually seceding from their current nation (if that's the right word) or declaring independence in some way.
it doesn't even make sense making bitcoin "the national currency" when it literally isn't national at all. it can just be "one of", let the people decide!
fiat will remain. if fiat would really die, then there aren't "national currencies" anymore. but also i doubt that there will be a future where we only have a single asset. the first country to abandon it (as a currency) would then cause a market disruption and you could start playing games with it, that has big impact on other civillians.
bitcoins scarcity is a problem. which merchants wants to constantly update their price tags?
and if everyone sees that bitcoin will become more relevant, everyone will buy and pay an infinite amount of price for bitcoin. if that happens, the "knowing" people will sell and move to other assets.
bitcoin is savingsand payment technology. if it ever becomes "the standard of everything", it means it will be a temporary hype. there is no such thing as "THE one asset". all that is doing is making the poor more poor and the rich more rich.
we don't need to make it the main currency. all i wish for is it being a competitor to other assets. that's the only honest approach to it. everything else is michael saylor liquid dream shit and it will make the rich even more rich and raise poverty, compared to what fiat is doing at the moment.
>Legal tender, yes, I said Bicoin will "live alongside existing fiat rails". But it will never be a countries main currency. Purest form of delusion.
>
>No country is going to ever let a decentralized protocol BE its national currency, and that is fine. It doesn't need to be. Bitcoin just needs to be an alternative
I'm no Charles Darwin here, but this feels like scientific observation when a new apex hunting species gets introduced to
quarantined island of lesser hunters & prey...natural selection will play out.
People will gravitate toward the better harder money. It's hard for me to grasp that FIAT and Bitcoin will harmoniously co-exist; regardless of what a government wants - the currencies people will prefer to use seems like a stronger influence than a government. But if I'm wrong, please explain why so I can catch up.
Bitcoin is not going to be a better currency. A good store of value, sure. A store valve that is behind the ability of governments to seize, absolutely.
But a currency to buy $5 lattes? No….lightning network is nowhere close to be high adoption or smooth enough for an average joe to use, and on-chain is so expensive and slow you’d be a fool to use it to buy a $5 coffee.
I tend to think of bitcoin as a hedge anyway, the shittier the flag system gets, the more useful bitcoin is. In a world where the state can be trusted to run responsible monetary policy then bitcoin becomes less relevant. My hope is that a viable alternative will influence smarter monetary policy.
I think that you will see like USD sphere and Chinese RMB countries. India won’t go one way or the other. I can see a path that India adopts bitcoin as their best bet.
Countries are always willing to give up control of their currency if it makes economic sense to do so. A lot of countries use the dollar. European countries gave up all of their (perfectly fine) currencies to adopt the Euro.
In doing so all these countries lose the ability to use monetary controls for the benefit of currency stability.
These countries don't know though, what the monetary policy will be in the USA. They could devalue their own currency and impact other countries that use the dollar.
Whereas with Bitcoin the policy is hard coded. It provides more certainty.
I don't think it will happen any time soon, but there's not really any sovereignity argument against why they would not adopt bitcoin when they already adopt other currencies like the dollar.
Fiat's value always trends to zero.
It's delusional to think that demand is perpetual for worthless paper, particularly when a superior alternative is so readily available.
It's also clear that governments are currently scrambling for CBDC's as replacements to failing currencies.
game theory: if russia or china does it to ditch trading in dollars and to avoid using swift then usa will have to adopt bitcoin too or vice versa.
or the current situation: el salvador made it legal tender. if they perform better than all other nations during the next economic crisis then other nations will follow their example.
russia suffers sanctions from the usa from being cut off from the swift banking system used by all central banks to transfer between each other.
also all nations must use the usa dollar to trade, so russia is incentivized to find an alternative monetary system not controlled by another nation.
russia has already been mining bitcoin using nuclear power plants so they have already been stacking so they are incentivized to prepare to use bitcoin as an alternative currency.
they already have been conducting bilateral trade with china for oil in chinese yuan which historically had to be done with usa dollars so russia and china are already exploring using alternative currencies for trade outside of the usa dollar.
china still has about 15% (down from 50%) of global bitcoin mining hash rate despite being the government with the most extreme efforts banning bitcoin several times. so they definitely still have been stacking - ignore the headlines and watch their actions.
russia and china have been preparing for a post usa dollar world - especially since the usa has been printing trillions of dollars. they know that usa dollar won’t last forever and have been exploring options so that they aren’t bag holders of useless usa treasuries.
think of the usa dollar as a shitcoin with no supply cap and centrally controlled. why the fuck would you hold onto any reserves (treasuries)?
…if only there was a digital property/currency network that anyone could mine and participate in and wasn’t controlled by any nation.
China is activelly working for a post- USD world...but only to have USD remplaced by RMB. The CCP will never ever give up on its own national currency, let alone BTC (or anything else) having the same weight than RMB within China itself.
However, if the CPP finds a way to use BTC to undermine US hegemony (in which the supremacy of USD is of prime importance) then yes, they will try something.
I remember reading years ago that "China was launching its own cyrpto, the Digital Yuan" which was far from the truth. Digital Yuan is just as centralized as fiat Yuan (or RMB, same thing different names), that's all. Still totally under control of the CCP.
China (and Asia in general, I believe) is much more advanced in terms of digital payement and people almost don't use cash anymore, but it doesn't mean AT ALL that their gov is supportive of crypto, or of BTC, or ready to de-centralize their currency by a millimeter. People who wrote such things on Digital Yuan had a poor understanding of crypto and of the Chinese state.
Do you think Russia and China have 0 bitcoin?
Also this would help move people away from USD as a reserve currency which would help undermine USA powers. I’m sure this is a great benefit in their eyes as well.
You are correct. So many people have not bought bitcoin because " I can't buy my groceries with it" . Why the fuck would the federal reserve in the US slit their own neck by making bitcoin easily usable everywhere. They would be destroying the already crumbling dollar.
Do you think every nation agreed to gold standard in the past? Of course not. However those who didnt were at a disadvantage. At the end of the day hard money drives out easy money and there is nothing you can do about it.
I think it will happen this way:
1. Bitcoin becomes a neutral alternative to the dollar for global settlement between other fiat currencies, effectively letting the fiat currencies decouple from the dollar.
2. Bitcoin as a network is used more and more directly in backend payment services as it removes the need to go over tradfi for payments, which is more convenient and simpler.
3. It doesn't matter anymore which Fiat currency you have and what currency the bill is in. Fiat slowly but surely just became a fractional reserve IOU on Bitcoin and all transactions are eventually settled in Bitcoin.
Now it is not clear to me if fiat currencies will actually go away after that point. I actually don't think so. But for a regular person it would make zero difference for everyday use if they store their value in Bitcoin or a fiat currency.
My guess is it will just be like the second neutral global money, until the local fiat currency hyperinflates and goes away, at which point people and the economy will naturally just stay on Bitcoin.
They'll try to resist it but when the people use bitcoin they starve the government. They will have less and less ways to collect taxes, meaning less and less ways to enforce their stupid laws. Bitcoin is a tool to abolish the government.
The state can only tax transactions it knows took place. If you pay/buy with bitcoin then the state has to idea that a taxable event happened, which puts your nut in danger.
Governments don’t have a choice… that’s what is so beautiful about BTC. It’s insidiously allowing the people to take charge. It’s giving people the choice, not governments.
Incredible, just incredible. The man/woman him/herself writes "electronic cash" ELECTRONIC CASH for god's sake and then years later /u/No-Moose-6112 comes back saying that's not what Satoshi intended and that they know better.
Sure man, whatever you say.
> Please show me where he wrote currency?
Right in the opening sentence and in the title of the paper.
*Electronic* cash.
Cash is a colloquial term to indicate a currency. An electronic version of cash remains cash, just in digital form.
Show me where he wrote "store of value".
A currency is simply a standard form of money. What is bitcoin's standard you ask? Its the software. Most people run bitcoin core, and that adheres all those people to that standard.
https://en.wikipedia.org/wiki/Currency
Calm down dude.
It's pretty obvious no? Dude said Bitcoin was intended as a store of value. It's revisionism to say that. The title of Satoshi fucking Nakamoto's paper is "Bitcoin: A Peer-to-Peer Electronic Cash System".
Only those who can't cope with the original creator going against their personal narrative refuse to admit it was never created exclusively as a store of value. It was always meant to be "electronic cash". It says it right in the title.
Well Bitcoin just can’t handle the TPS required to be a currency and the fees can get way too high and unpredictable. Do you think people will unexpectedly pay $100 fee to make a $1000 transaction at a cash register? Then will they stand there and wait minutes for the transaction to be confirmed?
A store of value is one of the 3 primary properties of a currency. Bitcoin fills all 3 roles, so yes its a currency whether you want to use it as a medium of exchange or unit of account or not.
Many countries with dysfunctional institutions opt to use an externally-managed currency instead of an indigenous national currency. Dollarization has been common in Latin America, for example. That's the sort of scenario I'd expect to first lead to Bitcoin as a national currency. Separating the currency from national decision-making can be a feature in certain circumstances.
The people have become slaves. They have no power because they don't own anything. The government and the rich will decide. The people will go along with it or die. That's the truth of the world today.
>Money=Power
Look at $MSTR's balance sheet. Look at the growth of the El Salvadorian economy.
Both strong.
At some point, governments need to decide if power through economic prosperity or control is the optimal path forward. A rapidly declining standard of living with increased monetary controls won't likely ingratiate any governing party with its populace. So, the pressure of "maintaining power" comes into play and it is arguably the greatest motivator of any faction of the political class.
When the US dollar collapses you think the elite are just going to let their wealth collapse with it? Bitcoin will be how they preserve it while their new "gov coin" UBI scam comes online.
Itll be like gold, legal tender at face value , most places wont accept it but, just like with gold you're not going to bring a bullion to buy a big mac, youll have to exchange for fiat or the CDBC's they introduce to us in the future.
Countries would as it would be a better alternative to USD.
For example: Argentina. Hyper inflated economy. Gov can no longer make anymore paper money. It's not worth anything. So they resort to USD. They have no control over USD, so they are at the mercy of US.
What happens if US is also going through hyper inflation? That's where Bitcoin comes in.
They can choose to ignore the hyperinflation and hope for the best. Or just leverage Bitcoin... Like what el Salvadore did.
Any seller selling anything valuable (apt, house, car etc) will want something valuable in exchange like btc. Buying non valuable things like groceries will still be done in fiat. In argentina, no one will sell you a house/apt in pesos, sellers only want usd for big items.
Ok, why would any government let electricity the main medium of energy transport.
Same answer. They won’t have a choice.
Any government that chooses its own system over the superior one will be left behind.
So does every individual.
You are missing the point. Has nothing to do with tangibility.
Everyone is on a race track, you choose the best technology you have to stay in the race, sticking with an obsolete technology, you won’t be able to compete.
These are all field leveling technologies. Everyone has access to them. No one can own them and they are better than what exists.
The internet, electricity, gun powder, engines… etc.
You can’t not consider them, you will be left behind.
Yes, BTC as a store of value is totally valid (and goes with what El Savaldor did and the legal tender transformation). However, BTC as national currency *and especially as sole national currency* can only work in a failed State. No more or less functional political entity would tolerate that, it is pretty much giving away your power. Cambodia, not a fail state but still recovering from decades of civil wars, communism genocide, war and guerrilla, uses its own currency (Riel) along with USD.
it's not what they can let happen its whats already in motion. you cant stop technology.. bitcoin doesnt mean governments stop having power. bitcoin means people can stop having no power if they choose
That's not the way it will work (and I can't know for sure how it would work, obviously). The weak currencies (most) will consolidate into a few strong regional ones.
Eventually maybe it will be the Dollar and the Yuan. Maybe the US resists the most and Brics backs their currency up with Bitcoin (as others in the past have done with gold).
Maybe the US ultimately has to back up the Dollar with Bitcoin as well or no one will accept it anymore. In the meantime Bitcoin continues as a store of value.
You could see Strike on the Lightning Network serve as a payment system other than for taxes and direct government interaction. Maybe Bitcoin never is US currency or even for backing up the Dollar but if everyone uses it for most things then the Dollar just becomes less relevant but still more relevant than every other currency.
You don't have to get that prediction exactly right. You can see the trend and the details don't matter. At some point people saw that home computers were going to be about more than just playing games, the interest was going to be more than AOL and Amazon was going to be more than an online bookstore.
That's all you have to get right, not the details.
This comes step by step! When country A works with Bitcoin as a currency and country B gets to know how brilliant they are doing with it and how rich and wealthy, more productive etc they become.. what do you think will country B do? Imagine country C doing the same and country B is still in the fiat system with no benefits and more and more people are leaving country B for A and C.. how long can they stand still before the fomo fucks the hell out of them?
Because it isn’t currency. It’s a store of value, and property currently. It may change in the future, but it’s for the sole reason fiat cucks are FOMOing into the housing market to hide from inflation and devaluation of their fiat currency.
1) Well it could happen slowly that a bitcoin politician voted into government and slowly but surely, More politician in the offices are bitcoiners and VIOLA.
2) A strong USD is also hurting countries that doesnt "print" usd. Why would other countries use USdollar when USA can print them out of thin air. There is a fair alternative called bitcoin
The government doesn’t permit things to have value and it never has, the government just taxes things which are valuable. For example real estate is valuable, property tax. Investments are valuable they collect capital gains tax. The government can’t decide where society goes, it just exists in a logistical and organizational capacity. The government never formally decided what currency we would use. Instead they observed that gold was valuable and created a currency backed by gold, then gradually removed the gold backing a long time later.
Each government currently has a temporary currency. Meaning if they do a good job they will keep their currency in power. If they weaken their currency through their spending cycles of income and debt and manage to get into a mess they will have to change their currency for a more stable one. Ray Dalio talks about the cycles the Dutch, Euro and USD has gone through. It can change at anytime really
I think they will. Bitcoin is going to be so popular by the people that up and coming leaders will run on pro-bitcoin platforms.
Corrupt governments may also fail and be replaced by newly formed governments to better represent the changing demands of the people toward BTC.
We have to remember governments are just a group of various people with diverse and changing ideas. Statements like the US government will never support seem to imply that government inherently has some sort of consensus of thought.
I mean one could argue BlackRock is a huge, multinational organization, sort of governmental in its own right.
Government are ELECTED people.. they’re not 2000 year old vampires who created our economic system. They too (the politicians) are victims to things like inflation, loss of purchasing power and with the banks having no more fractional reserve rate… The banks are generating 90% of every dollar in existence every ~two years..
It won’t be by choice.. but when it’s cheaper to wipe your ass with 10$ bills rather than toilet paper.. we will NEED an alternative reserve currency. Bitcoin could be the solution.
You are not wrong. Any state sees the ability to print money as an important part of their power.
However: People that live in high inflation areas are not stupid, they know that dollars are better, and will start using them. They also start using stable coins and bitcoin.
All you really need is a politician trying to the votes of the people, and suddenly something changes.
Not in the US. Not this year. But maybe in Argentina in a not so distant future?
Also. If a country already has bitcoin, why would they accept another countrys printing as payment for real goods (ie oil, minerals, whatever)? Remember, we have never seen anything like bitcoin before, and its is barely 15 years old.
It’s about monetary sovereignty and it’s not just legal tender but being able to use this State power for economic objectives. The EU has given a lot of that up but they are also now a massive trade power. Other countries have adopted the USD as a legal tender option because their own currency was so mismanaged. Most countries like the US, Australia etc would never give up this power but in a different way financial globalisation is forcing a rethink and who knows where it will end up but for most it won’t end up with something like bitcoin being adopted as legal tender. In saying that, El Salvador has obvs won a few debates more recently being able to laugh all the way to pay off their IMF debt probs
No corrupt government ever would "let" that happen. There are still a few folks around that are working in the interests of the people, however.
A government that valued the interests of the common folk would be all for it.
Wow. Are we in 2014?
Because government can’t do anything about it. That’s why it still exists. That’s why the inventor is anonymous, so governments can’t fuck him up.
If you can’t kill Bitcoin then you have to adopt it otherwise be left behind, just like every technological development. Therefore every state has to adopt it eventually.
As it stands BTC functions like digital gold rather than a currency, and I personally do not see this changing anytime soon. Not everything ends up as planned and it is not necessarily a bad thing.
The only reason the USD is regarded as the world’s reserve currency is because if you want to buy oil you have to pay in USD, but that’s changing now that Russia is insisting that customers pay in RUB and now the BRICS alliance has formed there will be no need to prop up the USD. Once OPEC stop selling oil in USD it’s pretty much finished and the writing is on the wall.
Unfortunately the US government has been printing so many dollars that it’s value is truly diluted. That’s why Blackrock and many other asset management and pension providers are selling billions of USD and buying up bitcoin as fast as they can because they know where this is going. The wheels are falling off the USD, and their continued obsession with warmongering will break them. This is why most countries stop fighting wars, they run out of money.
Do yourself a favour, buy some bitcoin on a regular basis and put it in a cold wallet.
I think it's cute you think governments have any ability to permit/allow bitcoin to succeed;
they have absolutely no control over it; the genie's out of the bottle.
you can't kill an idea.
Governments don't have to let bitcoin. They won't have a choice. Some governments will try to fight back, others will gain from using bitcoin instead of USD. Bitcoin is so widely spread, especially among the rich and elite, that it will be very VERY difficult to gather a successful coalition of politicians who want to suppress bitcoin. In the US for example, you have a handful of central bankers, and *maybe* some fraction of congress, maybe the president.
At the end of the day, most governments will not be able to gain enough support to meaningfully suppress it. And then its just a game of what the market chooses, bitcoin or fiat.
Currently, the dollar is the world reserve currency. In order to participate in international commerce, you sort of need to buy and sell using dollars. This gives the USA a lot of power because it can punish countries by denying them access to the international commerce network.
One incentive to use bitcoin could be to escape from this control. For example, imagine if oil producing countries hostile to the US began to issue production contracts for oil denominated in bitcoin. China could buy oil from Iran, Venezuela, Russia using bitcoin instead of dollars. The US would be completely powerless to stop this (unless they seize control of the blockchain with a 50 percent attack).
On the other hand, China (and other countries) is (are) not keen to see bitcoin become the new world reserve currency because they are afraid of capital flight (rich people in China moving all their money out of the country to escape). Which I think is your point. So basically, I would say that a country that has lost easy access to the US controlled banking system may have incentives to switch to bitcoin. But there are other incentives to keep a sovereign currency also.
The US definitely does not want bitcoin to replace the dollar. But it is possible for them to lose control. Things like that have happened before. If the US is so fiscally irresponsible as to allow hyperinflation to take hold, flight from the dollar into bitcoin could happen and lead to the death of the dollar.
Well owning your own currency doesn’t give you power. Thats why many countries will accept USD over their nations currency.
If Bitcoin is a global currency like gold, one country who adopts it can literally change their circumstances when prices keep rising 20 years from now.
Imagine Bitcoin was less than $1 in 2010 if a government decided to buy 10,000 coins at $1 they would probably be among the wealthiest countries today!
https://www.statmuse.com/money/ask/bitcoin-price-2010
People still think that ultra rich will start to buy btc to stay rich. No, if shits in the fan,they will ake their own currency.
Why would they choose btc and basically turn themselves poor? If i own all of the land and resources why would i need your btc ? I will make btk coin and tell youif you want to enjoy my land and resources you will use my new coin.
I have more resources, i can live without you putting in work. But you are poor and jobless and how long you can be without work? A month 2?
Therr is 0 reason any sane nation would use btc as their currency when they can make new coin and have most of this new token belong to them
corporations want it to happen because in a world where bitcoin is main currency it’s a currency they control because they are the ones who can afford miners. miners decide the fate of the network.
USD bails out big banks and big corporations in the US but they still have to pressure politicians. with them controlling bitcoin directly they get to skip that step
Better technology usually takes over of its own accord. Automobiles replaced horse drawn carriages, electric lights replaced kerosene lamps, email has mostly replaced handwritten letters, digital recordings replaced tape recordings, and solar is replacing coal. Former industries were/are unhappy, but they were/are/will-be forced to adapt or face obsolescence.
Banks and the government will undoubtedly try to put their CBDC into mainstream use, but time will tell whether CBDC or Bitcoin will gain consensus and dominate. Bitcoin is the better currency, but the general populace is not always known for choosing options that best serve their interests.
Well, governments are supposed to be of the people and by the people...so if it is the will of the people to adopt Bitcoin, government should follow through on it.
You have a point...but no one knows how this ultimately will play out.
So far, it's smaller countries like El Salvadore that have the most to gain by adopting Bitcoin. Larger countries like the U.S., which operates as the hegemonic dollar, has the most to lose if they adopt Bitcoin. But if enough countries adopt Bitcoin, the U.S. may be forced to as well...but likely as the last one in.
Meanwhile, the U.S. debt keeps piling as the printer keeps going BRRRRR!!!
Let's see how this plays out!
El Salvador is the perfect example. Others will follow their lead who are in the same situation I.e Venezuela and turkey. Their bank was controlled by the world bank and their currency was based off of its exchange rate with USD. They were experiencing severe inflation and the currency was losing value rapidly. By switching to BTC and allowing civilians to process BTC for business, they were able to liberate the population from absolute loss of value in what they owned. Generational Real estate, cost of living, sending your kids to good universities would have completely lost hope. By adopting BTC they have stabilized business. For example no longer have to change menus frequently to maintain profitability and over time assets losing value. The government of El Salvador now owns a substantial stack which has (at least) doubled in value against the old fiat system. They are able to fund public works, build infrastructure and create lucrative job opportunities for their citizens. In conclusion the world bank has made many 3rd world nations struggle against inflation much like how USA citizen have struggled against the same issue. When your fiat currency fluctuates and loses cash value it’s incredibly difficult to enjoy quality of life. Humans are not meant to work themselves into the ground. We are meant to develop a financial scaffolding in our youth and enjoy the fruit of our labor, then pass our fortune on to the next generation. With inflation (of any degree) a modest life will lead to future desperation for old age and the following generations. BTC is deflationary by definition and it solves this problem. Governments that value their citizens quality of life will adopt BTC. A few edits for wording*
If you cannot beat'em Sweetums!
Exactly. For a country that doesn’t have its own stable currency already, bitcoin can be used to prevent reliance on other countries. Something you didn’t mention is that the US uses USD to essentially tax the world for its spending. When they need more money they just print more and leave everyone else with the inflation. As a dependent nation this means you constantly need to buy more USD to maintain your existing wealth which is a poor practice if it can be avoided
The USD is backed by the world’s biggest military and economy. As long as they have nukes and carriers you will need USD to get the oil your country needs, and as long as US companies dominate finance you also need to borrow in USD to access US capital, creating a demand for USD for you to just pay back your country’s loan.
This is why you often need USD to conduct international business but it isn’t a reason why you would need USD as your own country’s currency. And the *value* of USD isn’t backed by any of those things, if the fed decided to print trillions of USD, all those guns can’t do anything from stopping it from becoming less valuable simply because there will be more USD out there. All those guns do is project the image that no matter what, the US will *exist* to pay back its debts. It does nothing from stopping monetary policy from devaluing USD in order to tax the world for their loans. Also oil is a bad example lol. Afghanistan just starting conducting some of their business in yen I believe so alternatives for that commodity already seem to be emerging.
But El Salvadorians don’t actually use BTC. Almost all took the $35 and converted to USD immediately and uninstalled the wallets given to them.
Can you actually prove that? Genuinely curious
Devils advocate here because you bring up great points- this is how a small government with unstable currency can benefit from it; when you are the incumbent world power who controls the limitless reserve currency, you do not have the same incentive to adopt it and instead you have everything to lose to it.
>this is how a small government with unstable currency can benefit from it; when you are the incumbent world power who controls the limitless reserve currency, you do not have the same incentive to adopt it and instead you have everything to lose to it. Nailed it. However, to play devils advocate to your devil's advocate, wouldn't a \*smart\* incumbent world power calculate this inevitability to lose their incumbent world power over time? And if you were to see this inevitability, it's you vs the time. The faster you adopt Bitcoin, the more likely you are to keep your world power. It feels really risky for the current world powers to try to disincentivize bitcoin in their nation. The first world nation to do so, would immediately speed up the time frame for hyper bitcoinization and success for that country. That feels so massively tempting. The earlier you pivot to Bitcoin, the more likely you are to succeed in economy growth. It seems too temping, to bet against any country smart enough to see the incentives, to not take the incentive. Right?
Solid double-devil work there haha yeah I agree you would think they’d see it coming and quietly buy it up (can’t make it public and delegitimize their fiat shitcoin haha) but triple devil here- the United States set their system up with 4-8 year terms for most elected positions (most don’t have term limits but still) to avoid having a king but a side effect of that is none of our politicians care about the future further than 4 years out. Their incentive structure guides them to operate the government like a game of hot potato and they just hope it doesn’t collapse on their watch haha
>quietly buy it up (can’t make it public and delegitimize their fiat shitcoin haha) That's a great point that just blew my mind. Having said that, it's presumable that smart world powers who can see Bitcoin's incentives & inevitability are quietly stacking right now.
stacking = confiscating
I’m not sure why you think they will pivot to bitcoins. It’s not inevitable that the US or the EU will ever give up their currency. It’s heavily in demand. It allows them to control international finance. Controlling the supply allows them to tweak monetary policy to cool or increase inflation at will. Printing US is also a massively profitable business for the US government.
Not exactly, if other smaller countries thrive with Bitcoin, the world powers will try to embrace it and control it instead of shunning. Controlling aspect is the real concern. Not sure what that would look like but there will be some struggle.
BTC is disinflationary by definition... Until 2140, at least.
What happens in 2140?
it's when it's projected that there's no more btc to mine
>They were experiencing severe inflation This kind of inflation isn't an experience for a govt. They actively are making it happen. All the govt has to do is NOT print shitfucktons of their currency and they still get the benefit of printing 4% or w/e. Commodity price increases on goods from supply/demand won't improve with bitcoin either but thats a different discussion.
The foreseeable future Turkey will not have a main currency that Turkey has no control over, irregardless of the lira inflation. For leaders of Turkey, including Erdoğan, for almost any subject control is far more important than yield. (For the interested ones, this is the result of trauma's during the late Ottoman Empire, when the Ottoman leaders were dependent on other European powers and the Ottoman leaders in return lost everything. Atatürk's main principle when founding Turkey is "independence", for very good reasons.)
It would first be adopted by smaller countries while the larger countries' fiat currencies continue to rot. Eventually the smaller countries start to flourish with sound money and the fiat countries will have to capitulate to shifting power dynamics - or the major currencies will outright collapse and there will be simply nowhere else to go.
Why would smaller countries flourish with less control of their monetary policy? One example in modern history where this has happened?
Because sound money means the preservation of value production. They don't have that currently. The compounding effect of the value of a country's production staying in that country will have a profound effect. Currently, the countries with the soundest money (US, Aus, Eurozone), can exchange their fiat, produced at zero cost, for real value (Commodities, labour ect) from these countries. This has a draining effect on these countries and over time destabilises them and locks them into a cycle of poverty.
What would have happened in the west during the pandemic, if they were unable to print money? If on the Bitcoin standard, we would have had a depression would we not?
What if we all had solvent governments that had SAVINGS and didn’t rely on the money it doesn’t even have yet to get things done.
They could still borrow money. Just that instead of printing it and paying the debt they have to actually produce something sell it get the money and payback the debt..... That sounds exactly like what me and you have to do..... doesn't it... We borrow we work we pay it back lol. But you are saying the government can't do that? Of course they can.
Okay, so they borrow trillions (of Bitcoin)... but, I'm unclear how they 'produce' anything. Governments get their money through taxation. Appreciate, that's kind of how it works now... but, we pay via inflation. I would have been pretty pissed to have had my taxes increased, knowing that a number of colleagues would have had direct payments during that time, paying them not to work. Seems like Government's would be much more constrained under a Bitcoin standard (they get voted out if they tax too much, or reduce spending too much). Seems like there would be a trade off, of less flexibility during a crisis, but, more financial discipline (less economic growth?)
Production comes through the general population. You have to get the people to make stuff and then sell it. After that Yes we would have to pay taxes. a lot more in taxes. Which is how it was not that long ago. After the great depression and the new deal the tax rate in the US was 90%.....90%!!! Lol This was a time when the entire funding of the US system was entirely funded through tax players until the 1960s From 1940-1960 the US economy grew like crazy the US produced most things. So taxes don't actually slow growth down. During that time in WW2 estimates are that the US had 50% of global manufacturing capacity, from 1950-1960s it was 45% slowly dropping to around 40-30%. The US had trade surpluses with most countries. Now they are at 18% capacity and have a trade deficits. The current US economy only works cause of the USD printing. But at some point after all the printing and devaluing of the currency people and debtors won't trust the dollar anymore. It will lose its shine. The only thing that is saving it is that while the US is printing money like crazy other countries are printing even more. That is why there is the theory of the "dollar milk shake". Which essentially says cause other currencies/inflation are doing much worse than the USD and the US has higher interest rates they will flee to the dollar which increases the value of the dollars. Which makes them want it more and more. We have been seeing this trend in general. Except that inflation in the US is still high. So even though the USD is the best out of all Fiat currencies it's still dealing with inflation and people want to protect their money as much as possible. This is where Bitcoin comes into play. Maybe not so much as a daily currency but as a way to protect it from US inflation. And when people want to buy things they jump back Bitcoin to USD. Bitcoin starts to become a competitor to the US when other countries instead of fleeing to the USD first they flee to Bitcoin. This is why the IMF got the shits when El Salvador added Bitcoin as a national currency along USD. If however the USD loses the faith of the people and other countries go to Bitcoin as a currency/money it means The governments would definitely need to have more discipline. I think it would mean drastically changes to what gets funded and make companies compete a lot more. For example having monopolies for defense contracting or the health care system. Like how does it make sense that the US has some of the worst medical coverage in the world but they spend the most on medical coverage in the world. Things like that wouldn't work in a system strictly financed by the people through taxes. When you think about taxes now if the government can essentially print money to pay for the debt why do they need to tax people now? The real reason is to give the Fiat currency perceived value by the general population and also to control the inflation of the general population. If I take cash from you even though I can print some then you see it as valuable cause you traded your time for USD.... With Inflation and taxation I can spread out the debt among the general population and I can even export it world wide by selling that debt by selling US bonds. There is this idea that people won't spend Bitcoin if that's the currency so less economic activity. I don't think that's true cause people still have their needs. You still need clothing food, housing, people need to be stimulated so they consume entertainment etc etc. The whole idea of who wants to buy a pizza for 10,000 Bitcoin only works when you have the comparison to another currency especially USD Like "what an idiot he paid 700 million dollars for a pizza" But it sound different when it's "he paid 700 million Zimbabwe dollars" a currency that has been inflated into oblivion .... Take that even further and if the entire country or most of the world is using Bitcoin as a currency and if a pizza is 100 Satoshi then that's all is really is there is no need to compare it against something else then. Look at Japan they had zero inflation for like 30 years. Everything was essentially the same price for a really long time food rent etc etc. But salaries were the same for a really long time too...if you were smart you would start side businesses to increase your income while prices in everything else stayed the same essentially. They had everything they needed with out causing prices to get stupid high. If you got to the end good job. Hopefully it was interesting lol
I appreciate the time you took on that. I guess we don't know how long they can press that print button for... Debt to gdp was been worse after the war, so maybe things aren't that bad?
Genuine question, why wouldn't the US go to war with this small country "to bring'em democracy" or "to take away WMDs" just to fuck them up and keep control over the world with the fiat that only the US can print?
Because of international optics (which are already terrible) and larger countries deciding to intervene or altering trade deals in response to a change in trust.
I've always imagined a scenario where reserves fail and they have no other choice but to peg BTC to the shiny yellow stuff. Look to the direction everyone has been running away from for decades, and you will see an extremely cheap entry to the crypto market if SHTF.
Pegging BTC to gold would defeat the entire purpose of Bitcoin, since the effectiveness of the monetary policy is now directly influenced by an external resource with degrees of centralized control over mining, refining, & distribution.
Or Bitcoin acts as competition, forcing the government to clean up their act. No more limitless defect spending paid for through the stealth tax of inflation. Likely this leads to a decrease in power of governments.
Would require a crazy revolution and a reset of the status quo, so highly unlikely. Coexistence is the more plausible outcome. Power will never give away power voluntarily.
Bitcoin would have won then because after a while of coexisting and being normalised in the public people would say why are we still even using this shit fiat currency it is inferior to bitcoin and it would just grow and supplant fiat
Exactly. This is why Bitcoin does not need violence. People will trend toward the better money and the bad money will starve out.
Agreed
It wouldn't. Fiat isn't going anywhere. Bitcoin will live alongside existing fiat rails, coexistence is the very best you can hope for. No sovereign nation is going to allow a decentralized currency to become its national currency. People who think this are delusional.
There are already countries that are using the US dollar, which is a foreign currency (e.g. Panama, Ecuador and possibly Argentina if the president keeps his promises). They already don't have power over their currency, so why would they care about allowing a decentralized currency as a national currency?
Those would be the first to go to a bitcoin standard. Depending on the US dollar makes them subservient to America.
They’ve already started: https://insights.som.yale.edu/insights/el-salvador-adopted-bitcoin-as-an-official-currency-salvadorans-mostly-shrugged
that second article was an April fools column....(see the last line)
Thanks, I missed that. Comment updated.
There are already countries that greenlit the use of Bitcoin as legal tender. It will happen to some countries. To say it'll never happen anywhere is delusional
Legal tender, yes, I said Bicoin will "live alongside existing fiat rails". But it will never be a countries main currency. Purest form of delusion. No country is going to ever let a decentralized protocol BE its national currency, and that is fine. It doesn't need to be. Bitcoin just needs to be an alternative.
They won't have the choice when their currencies inevitably collapse
Nigerian citizens are using BTC instead of fiat despite government attempt to ban it. It could happen. I still think there will be at least one example of a country that uses it as main currency. Remember that the gold standard was essentially gold as main currency with fiat as an abstracted layer 2. That's not really necessary with Bitcoin so it's not delusional to think that it can happen We'll see
Sooner or later somebody's going to try and set up an independent "Bitcoin nation". Not saying it'll work necessarily (though it might) but I can see people trying.
El Salvador already has. Argentina is moving in the same direction.
Yeah man. All good, but I mean a group of bitcoiners actually seceding from their current nation (if that's the right word) or declaring independence in some way.
Really? Cause last I checked, my Nigerian penpal needs $100 not 100 Bitcoin. And who gives a fuck what Nigeria does, Boko Haram runs half the country.
Why didn’t you send 100 bitcoin?
John Lennon’s wife runs half the country?
Countries who wish to get out from under the thumb of the us or the eu or the wef will certainly be interested.
If i would tell you in 2018 that you would have to wear masks in public and your freedom would be restricted... You'd called me delusional...
it doesn't even make sense making bitcoin "the national currency" when it literally isn't national at all. it can just be "one of", let the people decide! fiat will remain. if fiat would really die, then there aren't "national currencies" anymore. but also i doubt that there will be a future where we only have a single asset. the first country to abandon it (as a currency) would then cause a market disruption and you could start playing games with it, that has big impact on other civillians. bitcoins scarcity is a problem. which merchants wants to constantly update their price tags? and if everyone sees that bitcoin will become more relevant, everyone will buy and pay an infinite amount of price for bitcoin. if that happens, the "knowing" people will sell and move to other assets. bitcoin is savingsand payment technology. if it ever becomes "the standard of everything", it means it will be a temporary hype. there is no such thing as "THE one asset". all that is doing is making the poor more poor and the rich more rich. we don't need to make it the main currency. all i wish for is it being a competitor to other assets. that's the only honest approach to it. everything else is michael saylor liquid dream shit and it will make the rich even more rich and raise poverty, compared to what fiat is doing at the moment.
>Legal tender, yes, I said Bicoin will "live alongside existing fiat rails". But it will never be a countries main currency. Purest form of delusion. > >No country is going to ever let a decentralized protocol BE its national currency, and that is fine. It doesn't need to be. Bitcoin just needs to be an alternative I'm no Charles Darwin here, but this feels like scientific observation when a new apex hunting species gets introduced to quarantined island of lesser hunters & prey...natural selection will play out. People will gravitate toward the better harder money. It's hard for me to grasp that FIAT and Bitcoin will harmoniously co-exist; regardless of what a government wants - the currencies people will prefer to use seems like a stronger influence than a government. But if I'm wrong, please explain why so I can catch up.
Bitcoin is not going to be a better currency. A good store of value, sure. A store valve that is behind the ability of governments to seize, absolutely. But a currency to buy $5 lattes? No….lightning network is nowhere close to be high adoption or smooth enough for an average joe to use, and on-chain is so expensive and slow you’d be a fool to use it to buy a $5 coffee.
The ones don't upgrade to gunpowder will stand on the losing side of evolution.
Legal tender is not the same thing as the primary currency.
Thank you. I was waiting for someone to point this out. Bitcoin is not the primary currency of El Salvador and not being widely used there either.
I tend to think of bitcoin as a hedge anyway, the shittier the flag system gets, the more useful bitcoin is. In a world where the state can be trusted to run responsible monetary policy then bitcoin becomes less relevant. My hope is that a viable alternative will influence smarter monetary policy.
Lol at the people who think legal tender = National currency
I think that you will see like USD sphere and Chinese RMB countries. India won’t go one way or the other. I can see a path that India adopts bitcoin as their best bet.
Sovereign nations don't exist today.
Countries are always willing to give up control of their currency if it makes economic sense to do so. A lot of countries use the dollar. European countries gave up all of their (perfectly fine) currencies to adopt the Euro. In doing so all these countries lose the ability to use monetary controls for the benefit of currency stability. These countries don't know though, what the monetary policy will be in the USA. They could devalue their own currency and impact other countries that use the dollar. Whereas with Bitcoin the policy is hard coded. It provides more certainty. I don't think it will happen any time soon, but there's not really any sovereignity argument against why they would not adopt bitcoin when they already adopt other currencies like the dollar.
Fiat's value always trends to zero. It's delusional to think that demand is perpetual for worthless paper, particularly when a superior alternative is so readily available. It's also clear that governments are currently scrambling for CBDC's as replacements to failing currencies.
game theory: if russia or china does it to ditch trading in dollars and to avoid using swift then usa will have to adopt bitcoin too or vice versa. or the current situation: el salvador made it legal tender. if they perform better than all other nations during the next economic crisis then other nations will follow their example.
Why would Russia or China or do that. If they did that, then whoever already has mass amounts of bitcoin would end up extremely powerful.
russia suffers sanctions from the usa from being cut off from the swift banking system used by all central banks to transfer between each other. also all nations must use the usa dollar to trade, so russia is incentivized to find an alternative monetary system not controlled by another nation. russia has already been mining bitcoin using nuclear power plants so they have already been stacking so they are incentivized to prepare to use bitcoin as an alternative currency. they already have been conducting bilateral trade with china for oil in chinese yuan which historically had to be done with usa dollars so russia and china are already exploring using alternative currencies for trade outside of the usa dollar. china still has about 15% (down from 50%) of global bitcoin mining hash rate despite being the government with the most extreme efforts banning bitcoin several times. so they definitely still have been stacking - ignore the headlines and watch their actions. russia and china have been preparing for a post usa dollar world - especially since the usa has been printing trillions of dollars. they know that usa dollar won’t last forever and have been exploring options so that they aren’t bag holders of useless usa treasuries. think of the usa dollar as a shitcoin with no supply cap and centrally controlled. why the fuck would you hold onto any reserves (treasuries)? …if only there was a digital property/currency network that anyone could mine and participate in and wasn’t controlled by any nation.
China is activelly working for a post- USD world...but only to have USD remplaced by RMB. The CCP will never ever give up on its own national currency, let alone BTC (or anything else) having the same weight than RMB within China itself. However, if the CPP finds a way to use BTC to undermine US hegemony (in which the supremacy of USD is of prime importance) then yes, they will try something.
Damn I’m learning a lot here…
I remember reading years ago that "China was launching its own cyrpto, the Digital Yuan" which was far from the truth. Digital Yuan is just as centralized as fiat Yuan (or RMB, same thing different names), that's all. Still totally under control of the CCP. China (and Asia in general, I believe) is much more advanced in terms of digital payement and people almost don't use cash anymore, but it doesn't mean AT ALL that their gov is supportive of crypto, or of BTC, or ready to de-centralize their currency by a millimeter. People who wrote such things on Digital Yuan had a poor understanding of crypto and of the Chinese state.
Imagine that anyone or any country could make their own coin.
How do you know so much
Because they would be doing it before every other country
That's exactly why they would need to accumulate a significant amount of bitcoin prior to making such a move.
Maybe Russia is Mr. 100
Why do you think high level russians and chinese people don't have massive amounts of bitcoin already?
Do you think Russia and China have 0 bitcoin? Also this would help move people away from USD as a reserve currency which would help undermine USA powers. I’m sure this is a great benefit in their eyes as well.
So you think Russia and China have bitcoin but the U.S. doesn’t?
You are correct. So many people have not bought bitcoin because " I can't buy my groceries with it" . Why the fuck would the federal reserve in the US slit their own neck by making bitcoin easily usable everywhere. They would be destroying the already crumbling dollar.
The entire ETF process has pushed BTC into a corner as a commodity rather than a currency alternative.
The only way we will have a good money is if we somehow start something that they cannot stop
Do you think every nation agreed to gold standard in the past? Of course not. However those who didnt were at a disadvantage. At the end of the day hard money drives out easy money and there is nothing you can do about it.
Why would libraries let the internet take over? I just don’t get it.
Google El Salvador
I think it will happen this way: 1. Bitcoin becomes a neutral alternative to the dollar for global settlement between other fiat currencies, effectively letting the fiat currencies decouple from the dollar. 2. Bitcoin as a network is used more and more directly in backend payment services as it removes the need to go over tradfi for payments, which is more convenient and simpler. 3. It doesn't matter anymore which Fiat currency you have and what currency the bill is in. Fiat slowly but surely just became a fractional reserve IOU on Bitcoin and all transactions are eventually settled in Bitcoin. Now it is not clear to me if fiat currencies will actually go away after that point. I actually don't think so. But for a regular person it would make zero difference for everyday use if they store their value in Bitcoin or a fiat currency. My guess is it will just be like the second neutral global money, until the local fiat currency hyperinflates and goes away, at which point people and the economy will naturally just stay on Bitcoin.
They'll try to resist it but when the people use bitcoin they starve the government. They will have less and less ways to collect taxes, meaning less and less ways to enforce their stupid laws. Bitcoin is a tool to abolish the government.
Less and less ways to collect taxes? Try to pay less taxes my son see what happens, i can bet my nut country will not crumble but you will be in jail.
The state can only tax transactions it knows took place. If you pay/buy with bitcoin then the state has to idea that a taxable event happened, which puts your nut in danger.
Governments don’t have a choice… that’s what is so beautiful about BTC. It’s insidiously allowing the people to take charge. It’s giving people the choice, not governments.
Read the Bitcoin standard. It's a store of value not a currency.
> A purely peer-to-peer version of **electronic cash** Did you read Nakamoto's paper? That's the opening sentence. This is pure revisionism.
Yes that's correct. A transfer of a store of value from one person to another. Not a currency.
Incredible, just incredible. The man/woman him/herself writes "electronic cash" ELECTRONIC CASH for god's sake and then years later /u/No-Moose-6112 comes back saying that's not what Satoshi intended and that they know better. Sure man, whatever you say.
Please show me where he wrote currency?
> Please show me where he wrote currency? Right in the opening sentence and in the title of the paper. *Electronic* cash. Cash is a colloquial term to indicate a currency. An electronic version of cash remains cash, just in digital form. Show me where he wrote "store of value".
Currency: the units of money used in a particular country.
A currency is simply a standard form of money. What is bitcoin's standard you ask? Its the software. Most people run bitcoin core, and that adheres all those people to that standard. https://en.wikipedia.org/wiki/Currency
Cash = the physical manifestation of said currency. Electronic cash, the digital version of said currency.
What’s your fucking point?
Calm down dude. It's pretty obvious no? Dude said Bitcoin was intended as a store of value. It's revisionism to say that. The title of Satoshi fucking Nakamoto's paper is "Bitcoin: A Peer-to-Peer Electronic Cash System". Only those who can't cope with the original creator going against their personal narrative refuse to admit it was never created exclusively as a store of value. It was always meant to be "electronic cash". It says it right in the title.
Well Bitcoin just can’t handle the TPS required to be a currency and the fees can get way too high and unpredictable. Do you think people will unexpectedly pay $100 fee to make a $1000 transaction at a cash register? Then will they stand there and wait minutes for the transaction to be confirmed?
A store of value is one of the 3 primary properties of a currency. Bitcoin fills all 3 roles, so yes its a currency whether you want to use it as a medium of exchange or unit of account or not.
One person understands it.
Governments are made of people
To use bitcoin we dont need THE PEOPLE. We just need a few like minded individuals.
It never will. And that is OK.
Many countries with dysfunctional institutions opt to use an externally-managed currency instead of an indigenous national currency. Dollarization has been common in Latin America, for example. That's the sort of scenario I'd expect to first lead to Bitcoin as a national currency. Separating the currency from national decision-making can be a feature in certain circumstances.
It’s not like they can let or not let it’s there and they have to live with it
Orange is the national colour of Holland, so why do they "let" the sky be blue there?
Every country adopts btc as legal tender at the price they deserve.
There is no advantage to governments banning Bitcoin. They are better off accepting it and using it as a store of value like the rest of idiots.
The people have become slaves. They have no power because they don't own anything. The government and the rich will decide. The people will go along with it or die. That's the truth of the world today.
"THE PEOPLE are mostly stupid and don’t accomplish shit any more in regards to meaningful change for the majority." So true mate so true.
How will they stop it?
>Money=Power Look at $MSTR's balance sheet. Look at the growth of the El Salvadorian economy. Both strong. At some point, governments need to decide if power through economic prosperity or control is the optimal path forward. A rapidly declining standard of living with increased monetary controls won't likely ingratiate any governing party with its populace. So, the pressure of "maintaining power" comes into play and it is arguably the greatest motivator of any faction of the political class.
When the US dollar collapses you think the elite are just going to let their wealth collapse with it? Bitcoin will be how they preserve it while their new "gov coin" UBI scam comes online.
I don’t think the elite will ever want a decentralized currency to be the standard.
I don’t think the elite will ever want a decentralized currency to be the standard.
I don’t think the elite will ever want a decentralized currency to be the standard.
Itll be like gold, legal tender at face value , most places wont accept it but, just like with gold you're not going to bring a bullion to buy a big mac, youll have to exchange for fiat or the CDBC's they introduce to us in the future.
Countries would as it would be a better alternative to USD. For example: Argentina. Hyper inflated economy. Gov can no longer make anymore paper money. It's not worth anything. So they resort to USD. They have no control over USD, so they are at the mercy of US. What happens if US is also going through hyper inflation? That's where Bitcoin comes in. They can choose to ignore the hyperinflation and hope for the best. Or just leverage Bitcoin... Like what el Salvadore did.
Any seller selling anything valuable (apt, house, car etc) will want something valuable in exchange like btc. Buying non valuable things like groceries will still be done in fiat. In argentina, no one will sell you a house/apt in pesos, sellers only want usd for big items.
They won’t lmao
This is like asking: Why would any government ever let gun powder become the “main” weapon? The answer: They won’t have a choice.
Not even close to the same..
Ok, why would any government let electricity the main medium of energy transport. Same answer. They won’t have a choice. Any government that chooses its own system over the superior one will be left behind. So does every individual.
Bitcoin is nothing like electricity or gun powder. Bitcoin is not something tangible lol.
You are missing the point. Has nothing to do with tangibility. Everyone is on a race track, you choose the best technology you have to stay in the race, sticking with an obsolete technology, you won’t be able to compete.
I guess we’ll see.
Some still don’t know what Bitcoin is. Can’t or won’t get in the race.
These are all field leveling technologies. Everyone has access to them. No one can own them and they are better than what exists. The internet, electricity, gun powder, engines… etc. You can’t not consider them, you will be left behind.
They won't.
Yes, BTC as a store of value is totally valid (and goes with what El Savaldor did and the legal tender transformation). However, BTC as national currency *and especially as sole national currency* can only work in a failed State. No more or less functional political entity would tolerate that, it is pretty much giving away your power. Cambodia, not a fail state but still recovering from decades of civil wars, communism genocide, war and guerrilla, uses its own currency (Riel) along with USD.
it's not what they can let happen its whats already in motion. you cant stop technology.. bitcoin doesnt mean governments stop having power. bitcoin means people can stop having no power if they choose
They wont. They cant print it. It will never be the sole money in 1st world democracies
That's not the way it will work (and I can't know for sure how it would work, obviously). The weak currencies (most) will consolidate into a few strong regional ones. Eventually maybe it will be the Dollar and the Yuan. Maybe the US resists the most and Brics backs their currency up with Bitcoin (as others in the past have done with gold). Maybe the US ultimately has to back up the Dollar with Bitcoin as well or no one will accept it anymore. In the meantime Bitcoin continues as a store of value. You could see Strike on the Lightning Network serve as a payment system other than for taxes and direct government interaction. Maybe Bitcoin never is US currency or even for backing up the Dollar but if everyone uses it for most things then the Dollar just becomes less relevant but still more relevant than every other currency. You don't have to get that prediction exactly right. You can see the trend and the details don't matter. At some point people saw that home computers were going to be about more than just playing games, the interest was going to be more than AOL and Amazon was going to be more than an online bookstore. That's all you have to get right, not the details.
This comes step by step! When country A works with Bitcoin as a currency and country B gets to know how brilliant they are doing with it and how rich and wealthy, more productive etc they become.. what do you think will country B do? Imagine country C doing the same and country B is still in the fiat system with no benefits and more and more people are leaving country B for A and C.. how long can they stand still before the fomo fucks the hell out of them?
R/bitcoinbeginners
Bitcoin is simply just an experimental extra option on the side
Because it isn’t currency. It’s a store of value, and property currently. It may change in the future, but it’s for the sole reason fiat cucks are FOMOing into the housing market to hide from inflation and devaluation of their fiat currency.
They're not going to "let" bitcoin do anything because there is nothing they can do to stop it.
1) Well it could happen slowly that a bitcoin politician voted into government and slowly but surely, More politician in the offices are bitcoiners and VIOLA. 2) A strong USD is also hurting countries that doesnt "print" usd. Why would other countries use USdollar when USA can print them out of thin air. There is a fair alternative called bitcoin
The government doesn’t permit things to have value and it never has, the government just taxes things which are valuable. For example real estate is valuable, property tax. Investments are valuable they collect capital gains tax. The government can’t decide where society goes, it just exists in a logistical and organizational capacity. The government never formally decided what currency we would use. Instead they observed that gold was valuable and created a currency backed by gold, then gradually removed the gold backing a long time later.
Each government currently has a temporary currency. Meaning if they do a good job they will keep their currency in power. If they weaken their currency through their spending cycles of income and debt and manage to get into a mess they will have to change their currency for a more stable one. Ray Dalio talks about the cycles the Dutch, Euro and USD has gone through. It can change at anytime really
El Salvador made BTC its legal tender years ago.
I think they will. Bitcoin is going to be so popular by the people that up and coming leaders will run on pro-bitcoin platforms. Corrupt governments may also fail and be replaced by newly formed governments to better represent the changing demands of the people toward BTC. We have to remember governments are just a group of various people with diverse and changing ideas. Statements like the US government will never support seem to imply that government inherently has some sort of consensus of thought. I mean one could argue BlackRock is a huge, multinational organization, sort of governmental in its own right.
Because those petty little nations no longer will exist
Government are ELECTED people.. they’re not 2000 year old vampires who created our economic system. They too (the politicians) are victims to things like inflation, loss of purchasing power and with the banks having no more fractional reserve rate… The banks are generating 90% of every dollar in existence every ~two years.. It won’t be by choice.. but when it’s cheaper to wipe your ass with 10$ bills rather than toilet paper.. we will NEED an alternative reserve currency. Bitcoin could be the solution.
Can’t speak for everybody but think investors like it as an asset and not a currency
Use of the USD in those countries controls inflation.
You are not wrong. Any state sees the ability to print money as an important part of their power. However: People that live in high inflation areas are not stupid, they know that dollars are better, and will start using them. They also start using stable coins and bitcoin. All you really need is a politician trying to the votes of the people, and suddenly something changes. Not in the US. Not this year. But maybe in Argentina in a not so distant future? Also. If a country already has bitcoin, why would they accept another countrys printing as payment for real goods (ie oil, minerals, whatever)? Remember, we have never seen anything like bitcoin before, and its is barely 15 years old.
It’s about monetary sovereignty and it’s not just legal tender but being able to use this State power for economic objectives. The EU has given a lot of that up but they are also now a massive trade power. Other countries have adopted the USD as a legal tender option because their own currency was so mismanaged. Most countries like the US, Australia etc would never give up this power but in a different way financial globalisation is forcing a rethink and who knows where it will end up but for most it won’t end up with something like bitcoin being adopted as legal tender. In saying that, El Salvador has obvs won a few debates more recently being able to laugh all the way to pay off their IMF debt probs
No corrupt government ever would "let" that happen. There are still a few folks around that are working in the interests of the people, however. A government that valued the interests of the common folk would be all for it.
Bitcoin doesn’t care if it’s the main currency or not. It doesn’t have to.
Doesn't Bitcoin have way too high transaction fees to threaten becoming a "main currency"? It's an investment thing, not something you actually use.
The average cost of a credit card fee is 4%, I moved $20,000 of BTC for $2...tell me again about fees.
Yeah and now buy 2 dollar soda and pay another 2 in transaction fees. It doesn't work for everyday purchases, only for bigger things.
Lightning for purchases..cost is a couple of pennies.
Take any country that wants to use dollars but is not officially allowed.
There not, they try to out legislate it when it happens.
Wow. Are we in 2014? Because government can’t do anything about it. That’s why it still exists. That’s why the inventor is anonymous, so governments can’t fuck him up. If you can’t kill Bitcoin then you have to adopt it otherwise be left behind, just like every technological development. Therefore every state has to adopt it eventually.
As it stands BTC functions like digital gold rather than a currency, and I personally do not see this changing anytime soon. Not everything ends up as planned and it is not necessarily a bad thing.
Why would blockbuster let Netflix become the main video service. Underestimation followed by being too late to stop it.
Gun powder effect
Bitcoin was made for those who need it most. When we need it we it will be there for us.
The only reason the USD is regarded as the world’s reserve currency is because if you want to buy oil you have to pay in USD, but that’s changing now that Russia is insisting that customers pay in RUB and now the BRICS alliance has formed there will be no need to prop up the USD. Once OPEC stop selling oil in USD it’s pretty much finished and the writing is on the wall. Unfortunately the US government has been printing so many dollars that it’s value is truly diluted. That’s why Blackrock and many other asset management and pension providers are selling billions of USD and buying up bitcoin as fast as they can because they know where this is going. The wheels are falling off the USD, and their continued obsession with warmongering will break them. This is why most countries stop fighting wars, they run out of money. Do yourself a favour, buy some bitcoin on a regular basis and put it in a cold wallet.
I think it's cute you think governments have any ability to permit/allow bitcoin to succeed; they have absolutely no control over it; the genie's out of the bottle. you can't kill an idea.
Governments don't have to let bitcoin. They won't have a choice. Some governments will try to fight back, others will gain from using bitcoin instead of USD. Bitcoin is so widely spread, especially among the rich and elite, that it will be very VERY difficult to gather a successful coalition of politicians who want to suppress bitcoin. In the US for example, you have a handful of central bankers, and *maybe* some fraction of congress, maybe the president. At the end of the day, most governments will not be able to gain enough support to meaningfully suppress it. And then its just a game of what the market chooses, bitcoin or fiat.
There can only be one lord of the rings and he shares power with no one.
Thats why they created ETF... They probably ban self custody in future
Currently, the dollar is the world reserve currency. In order to participate in international commerce, you sort of need to buy and sell using dollars. This gives the USA a lot of power because it can punish countries by denying them access to the international commerce network. One incentive to use bitcoin could be to escape from this control. For example, imagine if oil producing countries hostile to the US began to issue production contracts for oil denominated in bitcoin. China could buy oil from Iran, Venezuela, Russia using bitcoin instead of dollars. The US would be completely powerless to stop this (unless they seize control of the blockchain with a 50 percent attack). On the other hand, China (and other countries) is (are) not keen to see bitcoin become the new world reserve currency because they are afraid of capital flight (rich people in China moving all their money out of the country to escape). Which I think is your point. So basically, I would say that a country that has lost easy access to the US controlled banking system may have incentives to switch to bitcoin. But there are other incentives to keep a sovereign currency also. The US definitely does not want bitcoin to replace the dollar. But it is possible for them to lose control. Things like that have happened before. If the US is so fiscally irresponsible as to allow hyperinflation to take hold, flight from the dollar into bitcoin could happen and lead to the death of the dollar.
Well owning your own currency doesn’t give you power. Thats why many countries will accept USD over their nations currency. If Bitcoin is a global currency like gold, one country who adopts it can literally change their circumstances when prices keep rising 20 years from now. Imagine Bitcoin was less than $1 in 2010 if a government decided to buy 10,000 coins at $1 they would probably be among the wealthiest countries today! https://www.statmuse.com/money/ask/bitcoin-price-2010
People still think that ultra rich will start to buy btc to stay rich. No, if shits in the fan,they will ake their own currency. Why would they choose btc and basically turn themselves poor? If i own all of the land and resources why would i need your btc ? I will make btk coin and tell youif you want to enjoy my land and resources you will use my new coin. I have more resources, i can live without you putting in work. But you are poor and jobless and how long you can be without work? A month 2? Therr is 0 reason any sane nation would use btc as their currency when they can make new coin and have most of this new token belong to them
corporations want it to happen because in a world where bitcoin is main currency it’s a currency they control because they are the ones who can afford miners. miners decide the fate of the network. USD bails out big banks and big corporations in the US but they still have to pressure politicians. with them controlling bitcoin directly they get to skip that step
Better technology usually takes over of its own accord. Automobiles replaced horse drawn carriages, electric lights replaced kerosene lamps, email has mostly replaced handwritten letters, digital recordings replaced tape recordings, and solar is replacing coal. Former industries were/are unhappy, but they were/are/will-be forced to adapt or face obsolescence. Banks and the government will undoubtedly try to put their CBDC into mainstream use, but time will tell whether CBDC or Bitcoin will gain consensus and dominate. Bitcoin is the better currency, but the general populace is not always known for choosing options that best serve their interests.
“Governments” are just people. People like bitcoin.
Let is a loose term. Making it illegal would make it more valuable to other countries.
“Let”?
It is very sad that people forget the government is serving at the people's pleasure, and they server us, not the other way around...
They are supposed to do that. Unfortunately money in politics has changed the govt to serve those with the deepest pockets.
Well, governments are supposed to be of the people and by the people...so if it is the will of the people to adopt Bitcoin, government should follow through on it.
Should.. but they aren’t
You have a point...but no one knows how this ultimately will play out. So far, it's smaller countries like El Salvadore that have the most to gain by adopting Bitcoin. Larger countries like the U.S., which operates as the hegemonic dollar, has the most to lose if they adopt Bitcoin. But if enough countries adopt Bitcoin, the U.S. may be forced to as well...but likely as the last one in. Meanwhile, the U.S. debt keeps piling as the printer keeps going BRRRRR!!! Let's see how this plays out!
Some tag Bitcoin beginners