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Fiat currencies will probably always exist. Digital crypto assets like Bitcoin or Ethereum will exist alongside them. Bitcoin can be an asset like gold, of whi
by doggosphere 6y ago
Fiat currencies will probably always exist.
Digital crypto assets like Bitcoin or Ethereum will exist alongside them. Bitcoin can be an asset like gold, of which users keep a portion of their networth to protect from economic uncertainty.
Its deflationary policy may make it less usable as a currency, but at least crypto gives people choice.
- daptaq 6y ago> Digital crypto assets like Bitcoin or Ethereum will exist alongside them. Bitcoin can be an asset like gold, of which users keep a portion of their networth to protect from economic uncertainty. Seems improbable, as it is far less stable than Gold. From what I see, it is almost never used as a currency, and almost always as a speculative asset. The main indicator for me is that Bitcoin is always measured in Dollars (or some other fiat currency), instead of having some value that it taken to be it's own. Have you ever heard someone say "This bike cost me 0.63 Bitcoin"?
- chillwaves 6y agoAnd how do you measure the value of gold?
- nr2x 6y agoHow much gold only exists on paper? Once people realize there is more in paper than in vaults that stability may evaporate. The Germans move their physical gold out of the US for a reason
- delaaxe 6y agoThe issue is apparently way worse with silver
- delaaxe 6y agoGold is also almost never used as a currency. BTC's product market fit is store of value, not medium of exchange
- doggosphere 6y agoGold was a currency. It evolved from rocks in the dirt, to gold coinage, to paper coupons, to whatever the hell instrument it is today. You stored your gold in a bank, and the bank gave you paper coupons to redeem it. People traded the coupons because it was easier than trading the gold. This is the birth of modern day banking.
- brianobush 6y agoHow is gold stable? Have you seen it in the last year? The last ten? Hardly stable IMO.
- pjc50 6y agoYou're not protecting from uncertainty with a currency whose value fluctuates against the dollar by 10% daily on a regular basis.
- doggosphere 6y agoDo you think volatility will be the same 10 years from now? 20 years? If so, why? I think volatility will down as volume and scale increase.
- JacobSuperslav 6y agoi think there's a high chance it will be worse ie. some competitor tech crushing bitcoin's value entirely in 10 years
- thrashh 6y agoI think the fact that no one controls Bitcoin is actually a major downside. The Fed does a lot of work to keep USD stable (alongside being part of a a stable government). I trust the USD as long as I trust in the institution.
- doggosphere 6y agoEveryone trusts their government when things are going good. When you stop trusting the USD/central bank, what will you turn to?
- pjc50 6y agoI don't think there are good reasons to use bitcoin, and I think much of the existing interest is a demand for volatility, in the same way as people are piling into GameStop.
- hn_throwaway_99 6y agoI was having this discussion with a friend recently, arguing over what the actual use cases are for crypto, and I came to a similar conclusion. In terms of facilitating payments, cryptocurrencies are worse in almost every way I can think of compared to existing systems. They are (currently) slow, have high transaction fees, but most importantly the non-refundability of crypto transactions is a bug, not the feature crypto proponents suggest. However, as a store of value (e.g. "digital gold"), I think crypto has real potential. There is a reason crypto is very popular in places with hyper-inflationary monetary systems like Venezuela and Iran. And compared to actual, physical gold, crypto is almost better in every way: it is much more easily transferred and stored, and the ledger means establishing "provenance" is not an issue. Yes, it's obviously currently extremely volatile, but it's not hard to imagine that volatility lessening over time.
- cauthon 6y ago> Yes, is obviously currently extremely volatile, but it's not hard to imagine that volatility lessening over time. I feel like I’ve heard this every year since 2015. I think it’s going to be hard to shake the majority perspective that it’s a speculative asset.
- jackson1442 6y agoAn interesting thing you might do in an overinflationary state, however, is buy a large portion of something like the USDC, the USD Coin, which maps to exactly US$1 all the time. While you are tied to another country's fiat whims, you still have the value add of crypto mentioned above: provenance and distance from the hyperinflated currency of your home state.
- MediumD 6y agoI think this is one of those things where people overestimated how much things would change in the short-term, but will grossly underestimate how much they will change in the longterm. 5 years is a pretty short window in the grand scheme of things when talking about the adoption of technologies.
- Geee 6y agoDeflationary policy makes it more usable as a currency. It means that you don't have to spend the money instantly, but you can save it for later.
- imtringued 6y agoDeflationary policy means that if you spend it today you lose out on future gains, so preferably you just don't spend it, ever.
- delaaxe 6y agoFiat currencies will still be replaced by stablecoins like USDC or USDT