Many believe that Bitcoin will replace fiat as the transactional currency. They also feel that it will replace USD as the reserve currency.
In this video I discuss how I do not find this likely. Also, Bitcoin is already cementing its place as a store of value. This could replace gold but will not really affect the way the USD is used.
▶️ 3Speak
I love bitcoin as currency but something that bugs me is the high transaction cost it needs to be fixed I don't want to use other crypto but how would want to pay 16 to 19$ in fee
and if we want to use bitcoin as we use cash it is not likely to happen because of high fees no?
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High transaction cost, slow chain, deflationary pressures.
Not a scenario that screams pay for my coffee using that.
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Right me neither
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I don't see the dollar collapsing. The Pound Sterling was once the reserve currency. It lost its status. It is still in circulation. The UK was crushed by WW2 debts, which they only recently paid off.
I think the US is in the same boat. We will likely lose our reserve currency status as the world switches to BTC. That will come with other side effects, such as the uselessness of SWIFT as a lever to impose US law on foreign banks. Without dependence on the dollar, foreign countries will have a bit more control of their own affairs. Perhaps one day our government will figure out how to pay off the national debt in 70 years.
Even so, I also don't see BTC becoming a transactional form of money, at least not for everyday expenses. There are other cryptocurrencies that are better suited for that type of transaction. You are right that people are buying BTC to hodl and collateralize rather than to spend.
In my mind I picture what is coming like a transmission with BTC being the overdrive gear you use for cruising speed. It is inadequate for taking off from am full stop. Other cryptos can serve as first and second gears as they are quickly and easily tradeable with low fees and fast transaction times. But, if you really want to get your wealth going, you need BTC as your top gear. Perhaps I'm belaboring things. Fiat could be first gear, and spendy cryptos could be second gear.
My analogy is tapped out. I'll stop now.
The advantage the USD has is multiple. Many of the physical dollars, the majority in fact, are outside the US. Also, there is trillions of dollars in debt that was written in USD that is going to be out there another 30 years. I think the Fed could insulate the USD by issuing 50 and 100 year bonds.
Finally, for all its faults, and they are many, the US banking system still is the most advanced. Until this is usurped, I think it is tough to challenge the dollar on a global scale. Even today, not only are major international deals done with US banks, most are headlined by one.
This will only get more tilts as the European banking system starts breaking down.
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You're right about the 50 year and 100 year bonds. I suppose I tend to think about things within my lifespan. A country does not have to think in such limited terms.
I suppose that gives time for the euro dollars to start winding down to whatever comes next. I also agree that the Euro is not a viable alternative for a reserve currency. I think China will have a go at becoming the reserve currency; but, I don't think it will take off the way the CCP thinks it will.
I covered this in my latest video.
The problem I see with China is the fact that they have trust issues on an international scale. The numbers are hard to trust coming out of China.
Plus, what do we truly know about their banking system and how solid it is?
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The US dollar will eventually lose its dominant position in the international currency system one way or another. It will happen regardless of Bitcoin.
Bitcoin will stabilize and mature at some point. Maybe it will become the politically neutral dominant reserve currency of the world. The world is destined to become much more multi-lateral than it currently is. The US will try and cling to its power and China seems to be building its own power base. I find it unlikely that the countries of the entire world will agree to let any single party dictate the rules of the financial world, if they have choice. Increasingly, they will have choice as their economies grow, which will happen owing to the simple fact of there being so many low hanging fruit to be picked.
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What are you smoking?
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I don't smoke, normally. If I'm drinking, maybe some Marlboro Lights.
replace gold as a store of value maybe, but gold has so many uses it will remain valuable all the same :)
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this engagement thingy is an awesome motivation :D
Really ? Lol are you posting from other frontends?
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I'm using ecency when I'm in a hurry. The lack of notifications on Leo slows me down a lot
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True . That is one feature which we need at the earliest . I usually go to hiveblocks.com and see if I have any reply and then jump here lol
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jumping around is tiring and distracting that's why I sometimes use ecency and I also earn points for commenting which can be use to promote/upvote posts or exchange them to their native token sometime in the future
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A few in electronic and perhaps jewelry, although nowhere near the practical uses of silver.
That is a metal to watch. It could accelerate in the next few years.
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Governments dropping their national currencies (which they have control over) in favor of a global digital currency which they don't have control over doesn't seem likely. I don't know if it's desirable either because there aren't any sort of social protection mechanisms in the crypto world.
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My view is that, in the end, governments will not survive. As we head deeper into a digital/virtual world, governments, which are designed to rule in the physical realm, will cease in importance.
We will be more engaged in our networks which have governance models.
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Interesting, and I am surprised this thought had not occurred to me. I have been thinking that governments will continue to rule due to their control of police and army, which are in the physical realm, but as the digital realm expands, will this control over the physical realm become less and less important? Maybe so. Interesting times for sure.
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My guess is that in another 50 years, the level of importance of government will diminish greatly. Networks will be much more important to people.
After all, a change in Facebook's algorithms tends to affect people more than a law passed by their government.
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I'd say Bitcoin will be used as a form of payment just for exclusive payments, occasional ones. I also agree with you that not many are likely to spend their crypto on stuff. I have myself only spent stablecoins with my Binance card. It's pointless to spend such assets, but I don't see why not spending some profits and earnings.
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@acesontop I love that "exclusive payments"...what you just said is the plain truth....the Bitcoin cannot totally replace the USD....
For now it can definitely not do that.
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@taskmaster4450le truth be told,Bitcoin can never replace the USD ..Bitcoin is a good crypto that can act as a store of value no doubt...but it cannot replace USD as a currency,it has its own role to play,the USD plays it's own role too.....
They all have their own features that makes them interesting to use...
I agree with your opinion sir...
Bitcoin will do better as a store of value than replacing USD as a currency....
@taskmaster4450le infact I believe that they should not even be replaced with each other....let each of them perform their own function and make the economy happy...
I don't agree with the idea of Bitcoin replacing fiat, either. What I see it as is a new reserve asset. It will be used as a collateral for various types of financial vehicles built on top of it.
The Bitcoin whitepaper and the fact that it's called a currency are misleading because when most people hear the word currency they think about a means of exchange. That's only one aspect of money.
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Replace it no way.
What gives Bitcoin "Value" right now is Fiat lol as dumb as that sounds. We always compare the value of a bitcoin to USD.
Transactions are either far to slow or costly on a Blockchain called bitcoin it wont replace it simply for that reason.
A majority of bitcoin is still held up in the top 100 wallets over 60%
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I was just talking about this today with patrickulrich on his VIMM stream. I didn't think it would work out but he thinks BTC can be split further from 1 satoshi into even less. I am not so sure I agree with his view mainly because the economy would stop running as it is not viable in a free running economy as it only incentives people to save and never spend.
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Summary:
In this video, the speaker discusses Bitcoin as a potential replacement for the US dollar and fiat currencies. He addresses the idea of Bitcoin being used as a transactional currency and challenges the notion of it replacing traditional currencies due to its deflationary nature. The speaker explains how Bitcoin's value as a store of asset affects its ability to be used for transactions and highlights the investment motives behind companies like MicroStrategy and Tesla purchasing Bitcoin. He concludes that while Bitcoin may serve as an asset class for collateralization and new financial markets, it is unlikely to be widely adopted for everyday transactions.
Detailed Article:
The speaker begins by addressing the idea of Bitcoin as money and a transactional currency, in response to discussions around Bitcoin potentially taking over the role currently held by the US dollar and fiat currencies. He expresses skepticism towards this viewpoint, citing a history of predictions about the collapse of traditional currencies that have not come to fruition. The speaker highlights the deflationary nature of Bitcoin, attributing it to factors such as its limited supply and programmed release rate.
A key point raised is the impact of Bitcoin's value as a store of asset on its suitability for everyday transactions. The speaker illustrates this by comparing the potential appreciation of Bitcoin over time to the historical norms of asset growth, emphasizing the reluctance of individuals to spend Bitcoin on goods or services due to its expected increase in value. He argues that this hesitancy results in a near-zero velocity of money when it comes to Bitcoin, making it unsuitable for use as a transactional currency.
Furthermore, the speaker discusses the motives behind companies such as Tesla and MassMutual buying Bitcoin, pointing out that their actions are driven by expectations of significant returns on their investment rather than hedging against inflation or seeking an alternative currency for transactions. He explains how these companies are already adept at transacting in various currencies and suggests that their interest in Bitcoin stems from its potential for value appreciation.
In conclusion, the speaker posits that while Bitcoin could serve as an asset class for collateralization, leading to the creation of new financial markets, he does not foresee it becoming a widespread method of payment for goods and services in the future. He emphasizes the importance of critical thinking and investigation when considering the potential role of Bitcoin in the financial landscape.
@taskmaster4450le USD is a currency which have it's own uses all over the world,the Bitcoin is gradually becoming a store of value too and that is why many people are investing on it,but Bitcoin replacing USD??I doubt...I do not see that happening...