Topic: A Negative Relationship Between the Monetary System and Bitcoin (Read 235 times)

It's more not about low income, it's more about global problems in economy of a country and fall in the exchange rate of national currency in the recent past. If we'll look at the top crypto countries we'll see that there are Nigeria, Vietnam, Turkey. Look at the rates of their currencies: I'm nearly sure they were also buying dollars to save money from devaluations previously, so now it is natural to use some other asset as well. And if your currency is stable by itself you'll buy Bitcoin only for investing if you are interested in that.

Where is what you mention happening? There are no records, not even in El Salvador, that people adopt bitcoin because their economic situation worsens or the situation of the country is such that people are adopting bitcoin.

The adoption is in process, but today it is messy and unbalanced, each user cares about their interests and not the common ones, they expect "someone" to guide and organize them, and that is where Fiat money still has the advantage and It is what makes what you mention not be the mean of action, that is,"investment by citizens in countries with economic problems".

People can be acquiring bitcoin in a low-income country as they can be acquiring it in a country with a stable economy, what you mention is more a myth than reality, bitcoin does not improve the economies of any country. (imo)

According to me People believe when  there is a trend. There were times when people trade with real values. They give some people Coal and receive Fruits. And when they discovered metals than they started to ideal Gold cause at that times gold was very hard to find and it was like a burning fire. So they decided to pledge gold for trades.
And still in 21st century we are believing in gold.in future like 2050 or 2100 there might be BTC that could be the future.

Since Bitcoin's inception the current monetary system saw   this as a threat. It was immadiatelly tied to organized crime a money washing. Throughout the years this relationship has gotten worse and now regulators are on the lookout for new regulation that may stiff the isdustry development.

be cautious of the term store of value
store of value does not mean all your wealth is locked in and guaranteed same day-short term to get out same/more.


storing your wealth means just that.. storing it
the value is not the price you bought at.. the value sits below the price..

this means if you bought in 2021 the VALUE was about $10k even when the price went up to $70k
so you were only storing(protecting) 1/7 of your wealth
(which today is a $15k store so your wealth went from 14% protected to $21% protected)

if you bought in at $30k were only storing(protecting) 1/3 of your wealth
(which today is a $15k store so your wealth went from 33% protected to $50% protected)

however the longer you store, eventually the value amount raises to protect more of your wealth. and then increase more to profit on your wealth

EG
if you bought $6 in 2012
at one point only 66% is protected when the value was $4
since then 2013 the lowest seen was $13
meaning all of your $6 was protected .. and by double because you could not sell below $13 after 2012 meaning that you profit by selling for atleast $13 in early 2013 meaning you value was protected and you can buy more bread

in 2014 the prices were over $300 so you were able to be more value secured and increase your wealth too(more beer and bread if you sold)
and so on and so on

..
in 2020 value store was $3k even if price was more.
in 2021 value store was $10k even if price was more.
in 2022 value store was $15k even if price was more.


however with fiat
storing $10 in 2010 doesnt buys you less bread or beer as 2022

.
but just be careful with bitcoin store of value. it comes with an explainer.. .. if you are buying on a premium(high) it will take longer for the store of value (sits under market) to raise to fully protect and profit your wealth.. but it will.. eventually

best advice.. DONT BUY THE HIGH.
buy the low to lock more of wealth into value store

"If it is not broken don't fix it." It is how things are usually going on: if a classical system you usually use works not so bad you'll hardly start searching for alternative. And if it starts breaking you start looking for something workable. Having a competitor existing financial project will have to work harder not to lose their clients so it is possible that a majority will stay with them, but it is not a problem as even being an alternative Bitcoin is changing world to the good.

Everyone has got the idea now that the typical monetary system is only bound to be taken care of the inflation. And that's why it devalues and it's known as an inflationary currency. Unlike bitcoin, it's a deflationary cryptocurrency.

Well, soon, everyone will start to open their minds on how the prices are keeping up and continuously going up. Even those that are not financially good will understand that there's no way to go if they'll keep most of their assets in fiat.

When people lose their trust in fiat currencies, they will find other assests which cqlan be better storages of value.

Bitcoin is one of good storages of value because its total supply is only 21M, can note changed to be higher like fiat currencies with high inflation. With Bitcoin, you can only have less and less Bitcoin in circulating supply because more bitcoins will be lost when people lose private keys.

The collapses of Venezuela fiat currency is good reminder for people to choose Bitcoin as well as fiascos of Terra UST, FTX FTT and many tokenized Bitcoin tokens lost their pegs.

This correlation is true, however every fiat monetary system is doomed to fail by default. Even the strongest fiat monetary systems like the US Federal Reserve are doomed to fail in the long run, because 32 trillion(and growing) US debt has to be paid in the future.
Even the Gold Standard era was way better than the fiat money era. Bitcoin fails at becoming a full alternative to fiat money, because of the price volatility and the blockchain getting stuck in certain periods. Perhaps Bitcoin will be successful as an investment asset and a store of value, but BTC can't compete with fiat money as a medium of exchange.

Hyperinflation kill the buying power of Fiat currencies in countries where the economy are struggling. So people have to find some commodity or currency that will serve as a store of value. A lot of people buy Gold or Silver, because the price are stable and it is well known for being a store of value.

The problem is.... the governments of those countries want people to use their local fiat currency to "save" it, so they do everything in their power to protect it. (Regulations to ban Crypto might be introduced to ban it, when the government feels like their fiat currency are threatened.) 

It was because of the failure of the current fiat monetary system that Bitcoin was proposal by Satoshi to become the replacement of that corrupt system in the first place. Satoshi saw that if we're left in this centralized system that many people finance will be destroyed so he introduced Bitcoin which is why any economy that's dying get the major support of Bitcoin as it's the only savior for such scenarios.

The dollars is becoming weaker daily as more and more is been printed by the central banks without realizing that they're inflating the supply which decreasing the value of a currency. Bitcoin has a fixed supply which makes it a perfect replacement of the fiat system.
 

I beg to disagree, I believe the relationship between Monetary system and Bitcoin should be commensalism wherein Bitcoin can benefit from  worsening financial system while not harming its entirety.  Bitcoin is not created to replace fiat currency nor compete with it.  Bitcoin is created as an alternative to fiat currency. For those who wanted frictionless transfers without third party finance system.

Further more. Bitcoin is not the solution for poverty nor it serve as relief to people that has financial problem.  Bitcoin isn't created to save the world from poverty. It is created to have smooth financial transfer without boundaries, without trusting a financial institution to process the transaction and have irreversible cheaper inter-country transfers.

It depends on what you mean by this. The monetary system everywhere has already failed and it is getting worse every day. Simply because it is centralized and has no cap on the amount of money they keep printing. For example US with the biggest national debt is the biggest money printer in the world.

But people only invest in bitcoin when they face inflation, which is the case in countries like El Salvador and "Central Africa Republic" that you mentioned. But if they face recession, they won't have any money to invest in bitcoin which is why we are seeing bitcoin price dropping since most of the world (namely US and EU) are facing both inflation and recession.

So in short if the monetary system fail leads to inflation alone we'll see more bitcoin investment but if it leads to recession we see less.

One big reason Bitcoin came into being was the financial crisis that gripped the USA back in 2007/2008 leading to the collapse of many big financial institutions due to many factors. People then realized that platforms which we assumed to be solid and well-managed were not what they are meant to be. Standing opposite to the usual monetary system, Bitcoin is then seen as a possible savior by the many and a kind of wealth protector into the future. Of course, right now, if one entered Bitcoin at its highest price value, it would be a different and maybe a sad story knowing that its value is just at $17K currently.

Quite arguable because I believe these two products do run parallel to each other and believe Bitcoin has more to lose than the monetary system as btc is still fighting to mark its territory in the world of fiat.

On paper, this is what is expected but in reality, this is far from what happens...FYI Fiat is considered to be far much more stable than cryptos and if the monetary system is failing users are more likely not to go the crypto way as it's considered a volatile asset.

Bitcoin investments can be caused by several reasons, one of which is people believing BTC is a get rich quick scheme because its on record  that people who got onto this boat early did cash in big after a couple of years of hodling and people are trying to get the same luck .

The worsening of monetary system paves path for the people to think of an alternate and this doesn't make the cryptocurrency system strong through adoption. According to me, it is a wrong understanding. When the monetary system is strong automatically the economy will be at the best and this makes people look for alternate investment opportunities as people have good sum of money. This will divert investment towards bitcoin and the same could gradually increase the usage of bitcoin and adoption.

That's possibly true, from the observations thus far but, how could it not be with all the negativity toward the cryptocurrency innovation but, it surely won't be so for long should there be some price standardisation.
The volatility nature of cryptocurrency has been some of the bases behind most of its investment for an asset other than serving as a day-to-day currency for which was its intent. Should there be some standards to it, it might start serving its original purpose with people stop treating it for an asset and have some direct fiat relativism other than the inverse situation we now experience.

Fiat and Cryptos ought to operate a mutual relationship other than one getting to diminish the other.

People moved to metals before they moved to fiat (that became corrupt and inflationary, worse than fiat did - fiat bailed out gold and silver on multiple occasions).

I think if a country adopts cryptocurrency and pulls itself out of poverty, it won't be doing it by relying on crypto alone. It needs better policies and a strong education system before it can prosper fully. Crypto might be viewed how gold is viewed by that point too in the world - as a stable potentially boring investment that doesn't rise to much because it's what a lot of people try to accrue value against - of course it could also be like the gold v platinum with bitcoin and other coins where some do better than others like what happens in forex.

I think your thread will be best discussed on the economics board, about fiat currency been rendered less effective in relation to El-Savador, i think this is a huge discussion that can bring the whole page into spamming because we may not end this discussion sooner if everyone is to say something on that regards, but let me recommend you to read the El-Savador's bitcoin adoption thread on bitcoin discussion board, you could understand more to this, the two may still exist for now but one will surely outweigh the other in future and time will attest to this by then, but bitcoin has always been on an ever increasing edge against dollar and the two were still legally accepted.

There is a negative relationship between the monetary system and the growth, and adoption of cryptocurrency especially bitcoin. That is as the monetary of fiat system of a country gets worse the adoption of Bitcoin increases. As you may have guessed countries like El Salvador and the Central Africa Republic that adopted bitcoin as a legal tender already has a failing monetary or Fiat system that is irredeemable. Furthermore, in countries where even though bitcoin hasn't been adopted as a legal tender we see an increase in investment in Bitcoin by most of her citizens because in these countries their Fiat or monetary system is already failing or being devalued. So citizens see Bitcoin as the only rescue for their are personal finances or wealth. What do you think?