3 ms·

Uh, my paper dollar is backed by the might of the US government and the US economy. It's a lot more than just "shared acceptance". Countries couldn't just swi

Uh, my paper dollar is backed by the might of the US government and the US economy. It's a lot more than just "shared acceptance". Countries couldn't just switch off the US dollar reserve currency for international trade without massive economic repercussions, which is why no country or set of countries has developed a viable alternative to the dollar for a global reserve currency. It's not like China/Russia wouldn't like to, they have no choice. The EU came the closest, but no one outside of Europe has wanted Euros since the Greek economic crisis. Hell a large chunk of internal European trade is still done in dollars on the back-end. On the stick side, under Obama the US stepped up the various mechanisms such that we can cut off trade denominated in dollars on a whim to anyone we want, that's part of how sanctions work. If we (the US) decides we don't want a country to be able to trade internationally, we just cut them off from converting into dollars at the exchanges. There are no economically viable ways around this at present. Just ask Iran. Bitcoin however, will collapse the moment enough of the crowd loses the faith. It'll go on for a while because it's the new hotness, and some people will get lucky and rich, but at the end of the day it's an ultimately worthless commodity (unless you're trying to avoid government regulation over financial transfers) that exists as long as world governments allow it to exist. Sure, if theoretically some critical mass of the population all collectively decided Bitcoin was the future it would be, but right now we can't get a critical mass of US citizens to wear masks during a pandemic that's killed hundreds of thousands. So I wouldn't hold out too much hope for pan-Bitcoinism.

solosoyokaze 6y ago
Your whole comment is basically an ad for Bitcoin. USD is valuable because we have an imperialistic global army that will kill you or starve you off if you don't use it? Seems like something we desperately need an alternative to. USD is the dirtiest fiat there is because it's backed by blood at a global scale.
- scottLobster 6y ago
  All fiat currency is backed by blood and violence at some scale, it's meted out by court systems, police and military forces. The US happens to be the sole global superpower so the scale is larger for us, but we're actually a very well behaved superpower by historical standards. The "Imperialistic Global Army" has allowed countries who could never have traded globally due to lack of resources to industrialize. The US Navy keeps the trade lanes open for everyone, or at least it did. Whether that will be a thing going forward is an open question now that the Cold War mentality is fading and our troop deployments at historical lows. We might be going back to a truly imperialistic attitude of protecting US and allied trade lanes and letting everyone else build their own Navies if they want to protect their shipping (many countries couldn't do this even if they wanted). But Bitcoin wouldn't be a solution to that either. As for moral purity, it's no secret that a significant (albeit unknowable) portion of Bitcoin's current value comes from illegal transactions concerning everything from human trafficking to drug sales to organized crime rackets. The ability to obfuscate financial transactions is part of its intrinsic value, so anyone with an interest in doing so will be attracted to it. Plus if Bitcoin were to somehow grow large enough to even consider replacing the dollar, all the blood behind the dollar would simply shift to Bitcoin in some (albeit likely different) manner. Someone has to enforce monetary policy and financial laws, a chaotic, decentralized enforcement would arguably be even worse than centralized fiat enforcement. There's no way forward financially without some blood on your hands at some stage. So for my money I'm going to build my financial house on solid ground. I'm all for making the system more just and less bloody, but IMO Bitcoin isn't it. In the meantime we've all got to play the hand we're dealt, the only other option is to be a martyr, and while they might get some occasional press and lip service, martyrs typically don't accomplish much.
orwin 6y ago
> Hell a large chunk of internal European trade is still done in dollars on the back-end. No. Internal trade is balanced with target2.
- scottLobster 6y ago
  Right, but to my knowledge target2 doesn't preclude the use of other exchanges. It wouldn't be illegal for say, Spain to convert to dollars and then back to Euros when selling to France. I'm having a hard time finding the statistics I read a few years back, and maybe things have changed or I was misinformed, but I remember reading while most internal EU trade is settled in Euros a significant amount was still settled in dollars for a variety of reasons (legacy systems and such).

solosoyokaze 6y ago

Your whole comment is basically an ad for Bitcoin. USD is valuable because we have an imperialistic global army that will kill you or starve you off if you don't use it? Seems like something we desperately need an alternative to. USD is the dirtiest fiat there is because it's backed by blood at a global scale.

scottLobster 6y ago
All fiat currency is backed by blood and violence at some scale, it's meted out by court systems, police and military forces. The US happens to be the sole global superpower so the scale is larger for us, but we're actually a very well behaved superpower by historical standards. The "Imperialistic Global Army" has allowed countries who could never have traded globally due to lack of resources to industrialize. The US Navy keeps the trade lanes open for everyone, or at least it did. Whether that will be a thing going forward is an open question now that the Cold War mentality is fading and our troop deployments at historical lows. We might be going back to a truly imperialistic attitude of protecting US and allied trade lanes and letting everyone else build their own Navies if they want to protect their shipping (many countries couldn't do this even if they wanted). But Bitcoin wouldn't be a solution to that either. As for moral purity, it's no secret that a significant (albeit unknowable) portion of Bitcoin's current value comes from illegal transactions concerning everything from human trafficking to drug sales to organized crime rackets. The ability to obfuscate financial transactions is part of its intrinsic value, so anyone with an interest in doing so will be attracted to it. Plus if Bitcoin were to somehow grow large enough to even consider replacing the dollar, all the blood behind the dollar would simply shift to Bitcoin in some (albeit likely different) manner. Someone has to enforce monetary policy and financial laws, a chaotic, decentralized enforcement would arguably be even worse than centralized fiat enforcement. There's no way forward financially without some blood on your hands at some stage. So for my money I'm going to build my financial house on solid ground. I'm all for making the system more just and less bloody, but IMO Bitcoin isn't it. In the meantime we've all got to play the hand we're dealt, the only other option is to be a martyr, and while they might get some occasional press and lip service, martyrs typically don't accomplish much.

orwin 6y ago

> Hell a large chunk of internal European trade is still done in dollars on the back-end. No. Internal trade is balanced with target2.

scottLobster 6y ago
Right, but to my knowledge target2 doesn't preclude the use of other exchanges. It wouldn't be illegal for say, Spain to convert to dollars and then back to Euros when selling to France. I'm having a hard time finding the statistics I read a few years back, and maybe things have changed or I was misinformed, but I remember reading while most internal EU trade is settled in Euros a significant amount was still settled in dollars for a variety of reasons (legacy systems and such).