Topic: Bitcoin as number one choice: The legal tender for breakaway/newly formed nation (Read 124 times)

I think the direct benefit of income earning shouldn't be the major reason for country to adopt the use of bitcoin as legal tender. The technology of blockchain should be in focus rather than immediate financial gain. Like the example of El Salvador that legalized the use of bitcoin, the report available doesn't show that such investment by the president, Bukele has been successful at least not for now with the bear market. It is not that the plan or investment in bitcoin wasn't noble in itself but because bitcoin is a volatile and fluctuating asset, it has to be a bull era for the investment to grow (same as hodler) From the information so far, the investment is classified as a failure like I deduced on the volatility of bitcoin but certainly when the bull return, I believe the worth of investment will improve but not in bear depending on the price bought.



I think Bukele used DCA  , buying at different times and batches but price is yet below investment area


These times are when the advantages of bitcoin is exploded. Like during the COVID-19 that social distancing was the order of the day, bitcoin became more important which saw the price steadily increasing since it was on high demand. This buttress the point of technological relevance and not only for pecuniary gain with the example of El Salvador above.

What I don't agree with is that you put as an example something that would be created in 2023, in the concrete example of a baseball card as something that should achieve a certain value, and I agree that this can happen over a very long period of time and in in the event that most of the cards are destroyed/lost and that there is someone who will collect them in 50 or 100 years.

To me, it is rather frivolous to put Bitcoin and baseball cards in the same sentence in that context. Show me one baseball card that was made between 2009 and today that has any significant value? Maybe there are some limited series or something like that, but as I already quoted in the previous post, the mass production of the same for the last few decades does not make them valuable compared to the old cards.

On the flipside, we have this.


Long story short, its a basic and fundamental principle of finance and economics to say that greater scarcity correlates with higher value.

Its a basic principle of supply and demand.

Greater print runs of baseball cards in the 1980s and 1990s would make them an inflationary asset, rather than deflationary.

But over the long term basic supply and demand coupled with scarcity validate everything I said. So I'm not certain what your point of disagreement is.

Your comparisons of Bitcoin with various things with which there is almost no point of contact are strange to say the least. Those cards you mention (or any others) can not only be issued in millions, but can also be forged and produced in virtually unlimited quantities and have no value for those who are not closely connected with it - in other words, collectors and those who are interested in baseball.

Bitcoin has a maximum supply, you cannot fake it and anyone can distribute it through the blockchain anytime and anywhere in the world. While sports collectibles undoubtedly have their value, it makes no sense to compare them to something like Bitcoin. Those cards from 2023 will probably be worth something in 100 years or so, because even those that are around 50 years old don't have much value today.
 

A newly formed country certainly needs a stable and strong financial support to be able to keep their economic system running well. Choosing bitcoin as their legal tender will certainly be an obstacle because bitcoin tends to be unstable and also other countries certainly will not support countries that adopt bitcoin as legal tender whose prices are unstable. Therefore, most countries now prefer to adopt fiat currencies such as USD or EURO, where the financial system is more stable.

As far as I know, El Salvador has accepted bitcoin as a legal tender, but they still use USD, they haven't removed currencies like USD since using bitcoin. And it's not a good idea for new nations to use bitcoin, bitcoin is volatile, and that can easily hurt that country's economy. Second as Smartprofit mentioned: using bitcoin as the primary currency will create aggression against worldwide institutions like the IMF. A new country cannot exist without the cooperation or help of countries and financial institutions.

In my opinion, the new state in the first years of its existence is very vulnerable. He needs international support.

However, if such a state chooses Bitcoin as its main currency, then it will become the object of aggression from powerful transnational structures (for example, the IMF). Traditional financial structures are very wary of the popularization of Bitcoin. They see risks to their comfortable existence in this process.

Therefore, such a new state (new nation) may, in my opinion, face aggressive pressure from such traditional structures, up to the downgrade of economic ratings and the imposition of economic sanctions.

No one could underappreciate the breakthrough that Bitcoin has made to the world's payment system. The disparity was huge then where some countries are the world's preference to have access to everything, while many other countries are sidelines.

But Bitcoin has said 'no more,' there is no special country when it comes to the coin, where are all equal, and where I could not easily send my payments before are being done now.

This opportunity even comes with a cheap fee to crown it all.

Much of the world's oil sales are conducted in US dollars aka the petro dollar.

The US dollar is remaining strong in international trade. While the native currencies of other nations are weakening significantly. If the exchange rate was 1:3. US dollar to native currency. The divide is widening to where it is now 1:5 or even 1:7 or higher. This is severely limiting the amount of oil many nations of the world are able to purchase. The purchasing power of non US consumers is also being decreased on exchange, in addition to other negative trends.

Some nations in africa, like ghana, were seeking to conduct oil transactions in gold to circumvent widening exchange rates. Other nations are taking other steps to shore up their local economy.

Stablecoins could have the potential to become a trillion dollar business in this environment. A stablecoin pegged to the US dollar might allow foriegn nations to circumvent widening exchange rates. This is nothing new. Residents in regions with inflation like turkey have been storing their wealth in stablecoins in an effort to protect their wealth from inflation for years.

Bitcoin is also an excellent option. Collectible baseball cards printed in 2023 are a deflationary asset. As each year passes, some cards will be lost or destroyed. Causing the value of a baseball card to appreciate over time as it gains in scarcity. Bitcoin follows the same trend. Each year many coins will be lost causing it to become an increasingly scarce resource. This could allow the value of coins to appreciate over time via the same deflationary mechanism as baseball cards and sports collectibles. With BTC having an advantage of intrinsic value, in terms of it carrying utility.

I intentionally don't want to bring up El Salvador and the likes of other nations who have adopted the use cryptocurrency as a legal or not so legal tender.

What I am focusing on, is how inflation is causing hardship in the world right now and how those who have seen its potential, if plenty enough could form nations or breakaway or exist independent of its identity, and how Bitcoin having stood the test of market volatility, during that time would be number one choice as leading legal tender of adoption.

 As crypto currency possess possibilities of earning opportunities for those who intend it as a means of income or for almost any facet that require its Blockchain technology, only but fractions of the population right now would survive and be masters, should there be new nation's breaking out and considering adopting Bitcoin as legal tender, or should there be a world disease/virus/zombie apocalypse. It would make sense because the old money systems are really either obsolete or have become insufficient to cover concurrent expenses due to inflation. Also, other altcoins have not had the stability nor publicity that Bitcoin has endured in the volatile markets and media/public eye, except for Etherum closely in the bracket.
The year when this might happen is in the nearest future of many nations now, wherein citizens have grown tired of government failed schemes and the knowledge of cryptocurrency has become almost like the gospel, both for commerce, transactions, profits.

*Do you think Bitcoin would be number one choice for any new nation's either breaking out or newly formed?

*What would make other altcoins qualify to compete to be number one choice?