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Liquidity is the most important thing. The thing that holds back bitcoin is that I can't buy my groceries with it. Once a currency can be used it is more val
by ljd 13y ago
Liquidity is the most important thing.
The thing that holds back bitcoin is that I can't buy my groceries with it. Once a currency can be used it is more valuable.
To overcome this, a company like Amazon would need to accept bitcoin or make some kind of passthrough system, where merchants can accept Bitcoin and Amazon takes their cut in bitcoins.
Once more companies accept it, it will be a prime candidate for the hold currency because no government can artificially inflate it's value. Right now the issue with having the USD, the Yuan or the Swiss Franc as the hold currency is that the currency becomes more valuable which makes items in that country more expensive for everyone outside of the country causing a decrease in exports.
So no country really wants to be the hold currency, in fact it's why China is manipulating their currency and artificially bolstering the USD by buying up US Debt. It depresses the Yuan and keeps their export business alive.
It's why a strong dollar killed US Exports. The stronger your currency is, the worse off it is for your exports.
Bitcoin doesn't have this issue, you can create a contract in bitcoin and not have to worry if that country is going to inflate it because their exports are decreasing. This gives the currency even greater liquidity.