Bitcoin as a "Global Unit of Account"?

Abiky

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Quote from: panukurap on December 28, 2021, 10:56:04 AM

I don't think crypto or Bitcoin will be a global unit account. Many countries still have not legalized Crypto, surely the government in it will not easily give up on crypto and eliminate fiat. If fiat is replaced by crypto I also feel sorry for those who are still technologically stuttering to their parents. We all have to deal with things like this well, don't get emotional.

It's a fair point. I mean, how can Bitcoin become Fiat's successor if it isn't recognized as legal tender? At least, one country (El Salvador) decided to "break the ice". It'll be up to other countries (especially developed ones) to do the same in order to help make "hyperbitcoinization" a reality.

I think it's very unlikely Bitcoin will become the "Global Unit of Account" simply because Fiat is still a dominant force in our economy. Banks are relevant these days even with crypto/blockchain tech in play. They will eventually adapt themselves to the latest trends in the Fintech space, as they phase out paper money for good (in exchange for CBDCs). Bitcoin will only remain as an alternative to the existing banking system because of its decentralized and censorship-resistant design. I'm fine with that as long as people are able to obtain financial freedom. Just my thoughts Grin

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Everything valued in terms of bitcoin, setting it to be the primary currency won't happen soon or in the future for few reasons.

Global adoption of bitcoin is found to be less than 3%
The adoption and the increased usage is found in limited locations. It needs to change
Every country need to legalize cryptocurrency usage, which won't happen for now
Bitcoin is much preferred for profit making (investment, holding, trading purpose)
People are not much interested using it on real world needs
It is always preferred as an alternate to fiat, where fiat usage needs a series of procedures for a transaction

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Quote from: Abiky on December 28, 2021, 09:35:00 AM

I think there's no need to worry about this, since Bitcoin wasn't made to replace Fiat in the first place. It does its job pretty well as a decentralized financial system anyone can use worldwide. With how things been going lately, it looks like Fiat and crypto will co-exist for generations. Just my thoughts Grin

BTC and fiat will find it difficult to coexist because of their contradictory and contradictory nature so that the pattern that has the same goal, namely as a transaction medium, has differences in each pattern that is built. BTC is indeed able to compete, obviously. However, as long as the government is in power and disturbed by the habits regulated in the law.

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Quote from: Abiky on December 21, 2021, 12:27:53 PM

Have your ever imagined a world where Bitcoin is the predominant currency for mainstream payments? A world where Fiat no longer exists as people rely on Bitcoin as a global unit of account. That means, people will no longer value things based on Fiat, but rather Bitcoin itself. You would pay for things directly on Bitcoin (for instance 0.000025 BTC for a cup of coffee) without the need to worry about its current exchange rate (or price) relative to Fiat. If that happens, then Bitcoin will "stabilize" effectively proving its use as digital cash. With a country like El Salvador adopting Bitcoin as legal tender, we may be one step closer to "hyperbitcoinization".

Do you think it's possible Bitcoin will become a "global unit of account" in the future? If not, why? What would a world without Fiat really look like? Your input will be greatly appreciated. Thank you.

I think it is far from reality at least now and in the near future. Bitcoin is more a property that people invest in.

panukurap

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I don't think crypto or Bitcoin will be a global unit account. Many countries still have not legalized Crypto, surely the government in it will not easily give up on crypto and eliminate fiat. If fiat is replaced by crypto I also feel sorry for those who are still technologically stuttering to their parents. We all have to deal with things like this well, don't get emotional.

Abiky

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Quote from: Kakmakr on December 25, 2021, 01:43:49 AM

I do not know if the world is ready to sacrifice their "precious" Fiat currencies and to replace it with something that are not under their control. Every country value their local Fiat currencies and they do anything in their power to manipulate it's value to attract other countries to use it.

The US Dollar has lost most of it's value, but it is manipulated to reflect a image that it is very stable and also very strong. This is why a lot of countries are using it as a Global Reserve currency. Wink

You might be right. Governments wouldn't give up Fiat that easily, especially when they'll lose control over people's lives. Something they can't manipulate to their own will, would strip them off the economy. For this and many other reasons, it's very unlikely Fiat will disappear in the future. Bitcoin may be a good, decentralized alternative to Fiat, but it won't be able to become the "global unit of account" if Fiat is still in play. As long as governments have their own Fiat currencies, Bitcoin won't be going anywhere.

I think there's no need to worry about this, since Bitcoin wasn't made to replace Fiat in the first place. It does its job pretty well as a decentralized financial system anyone can use worldwide. With how things been going lately, it looks like Fiat and crypto will co-exist for generations. Just my thoughts Grin

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Quote from: Abiky on December 21, 2021, 12:27:53 PM

Have your ever imagined a world where Bitcoin is the predominant currency for mainstream payments? A world where Fiat no longer exists as people rely on Bitcoin as a global unit of account. That means, people will no longer value things based on Fiat, but rather Bitcoin itself. You would pay for things directly on Bitcoin (for instance 0.000025 BTC for a cup of coffee) without the need to worry about its current exchange rate (or price) relative to Fiat. If that happens, then Bitcoin will "stabilize" effectively proving its use as digital cash. With a country like El Salvador adopting Bitcoin as legal tender, we may be one step closer to "hyperbitcoinization".

Do you think it's possible Bitcoin will become a "global unit of account" in the future? If not, why? What would a world without Fiat really look like? Your input will be greatly appreciated. Thank you.

It's possible for something of such nature to come in existence, only thing involves and also hindering it, is the time frame. because the tendency Bitcoin have secured height is showing evidence that in twenty years time bitcoin can be use to purchase road side materials very easy, because the rate of it inflation is at higher rate, which no average citizens of any country that doesn't know bitcoin, but in another hand, nothing can make Bitcoin eliminate Fiat currency totally no matter it's influence to the countries, fiat remain the pioneer of any other currencies.

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Quote from: The Cryptovator on December 24, 2021, 10:10:50 PM

No, it wouldn't happen ever. There will fiat always either in paper money or digital cryptocurrency. Just imagine how we evaluate the Bitcoin price? It's always with fiat. So if there is no fiat how will you evaluate the value, means Bitcoin will be valueless. Then it will just like be a fiat.

The disappearance of fiat money wouldn't lead to the disappearance of value, but the price calculations would indeed become more complicated in this case. If we got rid of money as a medium of exchange, we would be heading back to the system of barter, a system where the price of one commodity is measured in terms of the others. It is an inconvenient and obsolete system with a lot of drawbacks, particularly, in this system, there is always a problem of double coincidence of wants. Gold has emerged naturally from the system of barter as the most saleable commodity which was exchanged just for the sake of exchange and not consumption purposes. Consequently, the prices of other goods were represented in terms of gold but the value of these things was established before money appeared. If Bitcoin is to become new money, the prices of all commodities will be measured in bitcoin terms but bitcoin itself will be measured in terms of commodities. For example, the price of one bitcoin will be equal to ten kilograms of gold or several tons of eggs.

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I believe with Bitcoin still in its path to true price discovery, it’s impractical to currently use Bitcoin as a unit of account. Although that doesn’t stop it to be used as a Store of Value, and as a Medium of Exchange. Let the protocol run for another decade, then maybe Bitcoin will be stable enough to use as a Unit of Account.

Kakmakr

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I do not know if the world is ready to sacrifice their "precious" Fiat currencies and to replace it with something that are not under their control. Every country value their local Fiat currencies and they do anything in their power to manipulate it's value to attract other countries to use it.

The US Dollar has lost most of it's value, but it is manipulated to reflect a image that it is very stable and also very strong. This is why a lot of countries are using it as a Global Reserve currency. Wink

coinism

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Quote from: Abiky on December 21, 2021, 12:27:53 PM

If that happens, then Bitcoin will "stabilize" effectively proving its use as digital cash. With a country like El Salvador adopting Bitcoin as legal tender, we may be one step closer to "hyperbitcoinization".

To made all this reality Bitcoin need to stabilises itself first by fixing its shortcomings like price volatility, scalability and fee. Its not possible to made it to main payment system with such shortcomings.

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Do you think it's possible Bitcoin will become a "global unit of account" in the future? If not, why? What would a world without Fiat really look like?

After seeing how big powers are reacting towards Bitcoin, I have zero doubt that governments will replace fiat with Bitcoin. We need to understand that Bitcoin is a complete financial system that can exist with current fiat based financial system.

TheUltraElite

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The statement that came from a certain bitcoin accepting country's president, comes due to years of hatred against the Dollar added with it the financial incentives that bitcoin-related companies might provide to that country if they come in and settle there. The second point has been the major reason why this country accepted bitcoin as a legal tender despite the public being skeptical about it.

I feel this type of forced acceptance does not generate a healthy ecosystem for something that is new, however I am not the president so it does not matter.

Coming back to the OP's topic, if you look at the global currencies we tend to compare every asset with USD because it is the dominant one but we can also compare with our local currency. Really there is no single "global unit of account", we use what we feel is suitable. Even if in future bitcoin is made the basis of comparing, it would only change the fact that it is deflationary compared to fiat.

The Cryptovator

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No, it wouldn't happen ever. There will fiat always either in paper money or digital cryptocurrency. Just imagine how we evaluate the Bitcoin price? It's always with fiat. So if there is no fiat how will you evaluate the value, means Bitcoin will be valueless. Then it will just like be a fiat. On the other hand, even all countries decide to ban paper money still fiat will exist through stable coins created by the government. Without centralized money, the centralized authority wouldn't exist. So the powerful centralized organization like governments would let it happen.

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Quote from: sirminesalot on December 23, 2021, 10:05:38 PM

Quote from: bbc.reporter on December 23, 2021, 09:46:05 PM

@Abiky. In a post-fiat world the currency being used will not be bitcoin. Also if it was, in that type of world there would be more poor people than today because there would be much more people not holding bitcoin than people holding bitcoin. Is that a world you want only because you want your coins to pump? I also hate those bitcoiners who tell everyone to have fun staying poor whenever there is skepticism.

Isn't it the same just right now in fiat world currency right now ? right now 1% rich people in this world controlled 90% the whole world assets, so there won't be much different that's how the world works right now, but the post-fiat era will not come in near future because i'm sure the world rich people right now won't be replace by the new rich people, they must be need time for transition.

It is, however, that is not the argument. The argument is about bitcoin being used as a global unit of account. Do you reckon that volatility is good for the economy? Who would use a currency where the amount they can buy or sell changed everyday?

In any case, find a chart that uses bitcoin as the unit of account, a USD/BTC chart. It makes it appear that the dollar is volatile, does it not? Replace the USD in USD/BTC with the things you buy like your coffee, cheeseburgers or your internet bill.

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Quote from: naira on December 22, 2021, 10:30:36 AM

It doesn't even need to be the main unit, I'll still be happy, if it's only as a recognized payment alternative, for example. Don't be considered as an enemy to an institution or a party that doesn't like Bitcoin. Globally this would be hard to imagine.

I can only say this is difficult, because so far the adoption is still less than 25% how the world will not allow Bitcoin to be too powerful. There will always be the opposition to thwart it. The absence of a control center is clearly a strong consideration and will be a big obstacle. If we talk about the future, maybe every country will use their own digital currency with a version that is much more crypto-friendly.

It's still difficult, so far adoption has only been carried out in a few countries that have approved Bitcoin from the start.
some other countries or developing countries only provide regulation as a commodity and nothing more. Indeed, not all will accept the existence of bitcoin, such as the government's opposition to bitcoin which does not approve of bitcoin being used in their country.

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I don’t think Bitcoin will be a ‘Global Unit of Account’ and there are few reasons for this. Firstly, The value of bitcoin is very high and it will be difficult for some countries to coordinate with such an amount. Secondly, people even though are investing in bitcoin have a tilt towards local currency.
It may become the global cryptocurrency but it is very difficult for bitcoin to become a ‘Global Unit of Account.’

sirminesalot

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Quote from: bbc.reporter on December 23, 2021, 09:46:05 PM

@Abiky. In a post-fiat world the currency being used will not be bitcoin. Also if it was, in that type of world there would be more poor people than today because there would be much more people not holding bitcoin than people holding bitcoin. Is that a world you want only because you want your coins to pump? I also hate those bitcoiners who tell everyone to have fun staying poor whenever there is skepticism.

Isn't it the same just right now in fiat world currency right now ? right now 1% rich people in this world controlled 90% the whole world assets, so there won't be much different that's how the world works right now, but the post-fiat era will not come in near future because i'm sure the world rich people right now won't be replace by the new rich people, they must be need time for transition.

bbc.reporter

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@Abiky. In a post-fiat world the currency being used will not be bitcoin. Also if it was, in that type of world there would be more poor people than today because there would be much more people not holding bitcoin than people holding bitcoin. Is that a world you want only because you want your coins to pump? I also hate those bitcoiners who tell everyone to have fun staying poor whenever there is skepticism.

Abiky

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Quote from: OgNasty on December 21, 2021, 01:36:34 PM

Bitcoin as a global unit of account is an idea so bad that I don’t think it’s reasonable to even imagine such a thing. Think about coupons or sales. How would you even advertise price of anything knowing it could change so drastically from the time someone leaves their house until they get to the store. Nobody would be spending anything. There’s a reason fiat Ponzi schemes work so well. Trash money makes for good spending and high velocity.

That would only be a problem if you measure Bitcoin's value relative to Fiat. Bitcoin by itself is stable (1 Bitcoin = 1 Bitcoin, remember?) so in a post-Fiat world, people will rely on Bitcoin to determine the value of goods and services. You'd simply pay 2,500 satoshis for a cup of coffee at Starbucks without the need to worry about how much it is worth in terms of Fiat. We're still living in a Fiat world, so it's hard to imagine how life would be after Bitcoin takes over the world. I'm pretty sure governments won't allow Bitcoin to take over the mainstream economy, as that would prevent them from controlling people's lives. Fiat will eventually become digitized, greatly solidifying its position in the mainstream world. Inflation will grow for sure, but that won't make Fiat disappear from the face of the Earth. I'm fine with Bitcoin being an alternative monetary system, as long as it remains decentralized and censorship-resistant. Just my opinion

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Quote from: Artemis3 on December 22, 2021, 09:35:16 AM

2. Many people use the USD as a reference, but what if the USD collapses? It will likely pull other fiats into inflation as well, so the reference might as well change to something else like gold.

The bitcoin purchase power can only increase overtime, but should be lower and lower increases, it would eventually get nearly stable but who knows how many years that would take, maybe a century or two...

USD can easily be replaced by EUR or even JPY if it's the case.
The point is different: as long as governments stick to their own currency, they won't accept the outsider.

While you, and me, and some businesses can use Bitcoin as standard (after the price stops fluctuating wildly), but governments won't.
And again, if you'll want to buy goods and services the starting price will be in the currency of the country the shop resides in. Then it can be derived to Bitcoin and others.

Topic: Bitcoin as a "Global Unit of Account"? (Read 499 times)