Bitcoin is perfect money. Period.
While we would want bitcoin to be peoples' money and maybe even prefer governments to stay away from it, it does present benefits for governments and countries as well. After all, it an open monetary network where any individual or entity is free to participate in. For ordinary people bitcoin offers complete property rights that weren't available before. Yes, many laws provide property rights for citizenry within certain jurisdictions. But these laws can easily be replaced with laws that may go against property rights, or governments may take direct or indirect actions that may put property at risk.
Besides benefits like property rights, bitcoin has proven to be a good hedge against inflation in fiat and an instrument for preservation of wealth. There are countless other benefits of bitcoin like almost instant local or global transactions. Often bitcoin is viewed anti-government tool, or anti-fiat asset, or anti-bank currency. Usually the government entities and bankers are among the first express such views with focus on extreme cases where bitcoin may have been used in criminal actions. Most of the allegations have been debunked many times by much more smarter people in details. What surprises me the most is government do not consider or realize the benefits bitcoin may offer to them as well.
One of such benefits I can see bitcoin as a global money for transactions and settlements between countries. As the global inflation of all fiat currencies have demonstrated the weakness in economic, financial and banking systems, it also showed how bigger players in fiat space like USD are not immune to inflation. Fiat currencies always have had inflation. However stronger currencies like USD having much lower inflation, and being accepted globally made them among the most desirable assets to store value or transact in. Of course this is an oversimplification of why USD has been among the global currencies. Yes, Bretton Woods treaties, international trade, oil trade, and military had some say in which currency will be used in international transactions. However, losing its value slower than other currencies may have also played a role.
In recent years, the desire to find an alternative to USD among some countries has resurfaced and can see attempts for de-dollarization. Among the biggest players in this movement is BRICS, an economic collation or partnership of Brazil, Russia, India, China, and South Africa. While organization itself is not new, in more recent years they have discussed and considered use of alternative currencies for trades amongst member countries. There are even talks of creating a common currency for this purpose. More and more countries have been showing interest in joining the organization as well. While collectively the member countries make up significant portion of the world economy, they are not all geographically connected or have ambitions of building a political union like European Union. Even if BRICS or others were to create an alternative currency, in my opinion, that still wouldn't hurt USD. If it did, USD would be dethroned by Euro already. EU is probably is a better example of coalition of countries with common economic and political goals.
All countries take actions based on national interests. It is an interesting geopolitical game they play. I say this, because there are times when national interests are given as a reason for actions that either have nothing to do with national interests or may even go against them. On an international level things get weird. If local politics often doesn't make sense, on international stage things get ten times nonsensical. Putting geopolitical games aside, what has been super clear in fiat experiment is that there isn't a single currency that takes all national interests into account. USD being a global reserve currency or mostly used currency, primarily benefits United States. Similarly in a regional level, if some currency was used more than others, it would only benefit the country that prints them.
In the latest news Indonesia has expressed ambitions of moving away from USD. Bank of Indonesia governor Perry Warjiyo said that following:
Indonesia has initiated diversification of the use of currency in the form of LCT (Local Currency Trade). The direction is the same as the BRICS. In fact, Indonesia is more concrete.
There is desire by countries to use their own currencies in trades. This is a normal phenomenon. Conducting trade in their own fiat currencies would add more value to their currencies and help their economies as well. However, the reality is not all currencies are equal, not all economies are the same. Moreover, the world economy is very inter-connected. No country can survive with having only one or few trading partners. If we wanted to have a fair and free international market, all fiat currencies would have to compete against each other and even then only some would become more preferred currencies. Demand would pick the winner. The irony is since this is game for global politicians, those who can would definitely rig the game.
It is not even about the technology. Even with the experiments in CBDC, the sovereign currencies will always be manipulated and undermined in the name of national interests. While nations do go into great extend to build bridge and trust, when it comes to fiat currency there will never be trust. History shows deals and promises can easily be broken and abandoned. There was a time the world was assured that USD will be backed by gold, only after few decades it no longer could deliver on the promise. Similar fate will face the currency that may be agreed on to become a common currency for international trade. It seems bitcoin and crypto critics were right all along when they said "Bitcoin is not a currency." and questioned it with statements like "It has no intrinsic value. It has no government backing."
In the past I would explain why they are wrong. Now, I can see that they were/are right. Bitcoin is not a currency. Not in a sense that it has entity that prints it at will. We are used to the concept of currency as government printed and controlled thing. Bitcoin is none of that. Not only bitcoin removes the government and central banks from the equation, it removes the need for trust and permission. Fiat currencies are deeply reliant on trust and permission, and can't be any other way. So, if BRICS or other coalition of countries try to create something new or use their own currencies, they still are not solving the core problem they have. They need to trust each member that they will act in the benefit of all participants in the system. They simply can't. National interests will lead them to mistrust one or more at different times.
Dollar is not their problem. Nor are they the destroyers of the Dollar. Dollar can do it to itself just fine. Just like other currencies are devalued over time.
The solution to their problem has been around for a while now. Bitcoin solves their problem. It doesn't belong to any country. It doesn't care about any national interest. Nobody needs to trust in it, or in the participants. The network has proven to be secure, reliable and available to all. There is no need to create coalitions, or new fiat systems. There is already a better system that addresses all the issues they would try to address.
Despite all the negative views and criticism by governments and central banks, bitcoin has already been declared a commodity that no government can control. Even banning bitcoin didn't do any harm to the network, system, or the assets itself. It makes perfect sense that countries globally should consider bitcoin as the money for some or all trades and transactions. It would only strengthen their position, benefit their economies, and facilitate more fair and free international market. It could also make their fiat currencies stronger over the long term. They don't even have to hold their money in bitcoin. It can be used for transactions and immediately be exchanged to any currency they choose. Even bigger economies like US, EU, China, India, Brazil, etc can greatly benefit.
It is becoming more and move obvious that traditional banking and finance will become obsolete in near future. The entire system will need an overhaul. Some may thing CBDCs are the solution. They are not. The issue is not how efficient the system is, the issue is in how decentralized the system is. Money was always meant to be decentralized. And only such system can truly benefit all participants, be it ordinary people or the governments.
It seems inevitable to me that at some point in the future we will find out that more and more countries transitioning to decentralized money. Some may even be preparing secretly, don't disclose public due to political reasons. At the same time I hope it will take a lot longer for governments to realize the obvious solution to their problems, so that more and more people can accumulate bitcoin before it becomes the global standard.
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I just remember the first time I decided to take a loan from neoxian to make a mining setup and I took BTC as loan currency. He lives in USA and I reside in India and I got the money within 20 mins at a cost of only around 0.5$! No international tax, conversion or fees .. no bullshit.. just fast and fluid transfer which helped me kickstart my crypto career. I do believe BTC has the utmost potential to become the world currency one day! Amazing post ❤️
I completely agree with your title that Bitcoin is the closest we have ever come to perfect money. Rather than being anti-government or anti-fiat, it represents a distinct financial system that cannot be controlled by them, which is why it is viewed as a threat to the existing system. I believe that the Bitcoin experiment in El Salvador will demonstrate its value to the world. Thank you for sharing your thoughts.
The main thing, the government is not taking Bitcoin as a benefit, they are taking it as their enemy and that is why they are trying to impose restrictions on it. which I think not going to work for a longer period of time. Bitcoin is created to work free and it will work free and I'm sure many governments will adopt it.
Its so good for transactions. Recently i send 0.001 BTC and the fees were only about $1 !
Government officials don't understand the value of Bitcoin because they are too greedy to see it. It is as simple as that and very sad.
Surely, the crypto critics have no other points from the perspective of the money concept technically. And no superpower will accept BTC as the world currency because of losing their control over national and international interests as financial transactions and contracts are truly responsible for all relations among nations and people worldwide!
My prediction and thought are that the world will have multiple CBDC chains where the allies will adopt the technology but never make it true decentralized for many issues regarding the protection of the existing financial institutions and the name of protecting illegal transactions while cryptos are the best for tracking the records in most of the cases. And the multiple polarization will lead the technology further for the upcoming competition to rule over the economy.
Thanks for sharing such an interesting topic.
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It's weird, I feel like I've just read a 5 year old post. Bitcoin is good for international payments, I think we'd worked that one out 😉
Anyway, I think the swap exchanges are making it easier to deal in BTC because if I sell something for $50 then that's the amount I want, I don't want to risk BTC price falling just after you've purchased from me using it.
Cg
I see the arbitrariness of the will of lawmakers as the biggest threat to both the free-market monetary network and property rights. I see politicians as the destroyer of wealth and market value. Is it even possible for the civil government to back Bitcoin to give the token intrinsic value? Can the citizens' life, freedom, and property be really protected from the abuses of those in government?
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They always say Bitcoin is a way for money laundering and used in criminal activities.... Well so is the dollar and so are every other type of currency or anything that has a store of value
I totally agree these sentences✌🏼
Nice post.
But you see, not all geopolitical zones/countries would allow this.
Most don't want their citizens to enjoy financial freedom, they want to dictate and be incharge of their citizens finances.
Banks would advices that "Money are meant to be stored in the bank and not your house", but when you need it, they will offer you what ever they like when it is your own money.
Source
In my country, Citizens que for hours to withdraw their own personal money, is not as if the Government gave them.
So i think most countries wouldn't accept this.
I think the US dollars has been the main transaction between countries for some time now, even the US won't want to go for such idea because every country wants to be at the top and incharge.
Transferring money to someone in another country is a mess and could have high fees. That's why we should embrace BTC and other valuable coins.
As an asset, I think BTC is good but I don't know if it's good for transactions between countries. The fees add up over time and I don't think it's a good thing to have. I think there are cheaper cryptos that could serve that purpose with a shorter settlement time.
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I think bitcoin is true coined liberty and one of the best systems to facilitate transactions between countries and their citizens. It's obvious that any new system that they create will be flawed from the beginning, repeating the same thing in another shape or form. Bitcoin is impersonal.
A lot of people fail to realize that they are going to benefit from bitcoin if the government should finally approve it and even the government will benefit from it
You are absolutely right about this, bitcoin has proven trustworthy and very easy to transact
I agree with you. Currently the best example can be seen with countries at war. Bitcoin has helped the common user (not the one who agrees with the war) It has also helped countries where governments do not have or do not want to have an economic outlet or entry for their citizens.
It would be phenomenal if the entire globe was communicating and using bitcoin as a currency of exchange.
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The government views Bitcoin as more of a threat than a valuable asset, and therefore attempts to limit its use through regulation. However, it is unlikely that these measures will succeed in the long term, as Bitcoin was designed to function as a truly decentralized and free system. This is where the problem lies, as governments are so accustomed to controlling everything that Bitcoin slips through their fingers. Over time, it is likely that more governments will adopt Bitcoin as a viable alternative.🚀🚀🚀
Years ago I met a guy that played poker professionally. He was playing tournaments in las Vegas and he said that it was very difficult to transfer big amounts of money there from his country. too many fees and restrictions, so he ended up doing the transaction with bitcoin and he received the totality of HIS money.
100% agree you see El Salvador is paving the way for third world countries leading by example
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