Topic: How can collapse of USD affect bitcoin? - page 2. (Read 4563 times)

This is a very good question you ask.  I think that it would be uncharted territory for bitcoin and for the rest of the world.  In many ways I can see it as a good thing for bitcoin but not for the rest of the world that would be experiencing some serious unrest in my mind.

How did i know tera would be a negative nancy 

Don't listen to bankers you idiot. And I'll bet any amount you like that the price will not have gone to double digits when your 45 days are up.

Bitcoin doesn't need to skyrocket. It just needs to remain useful... Everything is going to collapse across the board and the market will re-evaluate everything. There will be a chaotic period of price discovery and nothing is exempt.

When the collapse happens you will have no more wealth, gold coins will be worth no more than the goods your grocer is willing to trade you for it. Where should somebody place wealth when everything is going to collapse? The gold standard doesn't work. Everybody knows that... Guns and ammo are a great investment but they will be more susceptible to theft after a collapse... Not everybody can buy land property or real-estate.

Basically, it doesn't matter if you have a basement full of gold bars or a million Bitcoins. Your wealth will be redefined over an unknown period of time after the fiat system crumbles. Bitcoin will survive, gold will survive, people will survive and barter. The storm will pass and the world will pick itself up, dust itself off, and move along.

Even though Bitcoin will lose value immediately during/after a collapse it will be revalued. Bitcoin is extremely useful in trade, especially international trade where the journey might be treacherous or risky. Your pockets can't be picked of Bitcoin, your Bitcoins can't easily be swiped, and you won't need to hire private security to protect your life savings.

When the collapse happens, and I think it will be soon; move your wealth into the things necessary to protect your life first, then make a choice between gold and Bitcoin. I believe my wealth will be safer in Bitcoin over gold. I can't protect physical gold from theft as easily as I can protect Bitcoin from theft... Plus I completely expect the governments around the world will appropriate as much civilian gold as they can; just like under FDR. After the world re-establishes a fractional reserve gold standard, Bitcoin will be exchanged for that currency just as it is for fiat... The advantages of Bitcoin will be even greater than they are today.

I think it's a situation where everybody will be forced to choose between two terrible situations; nobody will be preserving their wealth in the near term either way...

We'll be living to witness this historical event. Nobody knows how it will play out for certain.

How did I know some ridiculous bulls were going to blurt out "btc will skyrocket"?  

no...

Guys you are seeing the effects of the economic collapse on bitcoin already - we are in the early stages of the economic collapse, and, it is going down.

Just because btc theoretically could be used as everyone's store of value, doesn't mean it WILL. It is not big enough yet, and right now people are going to store wealth into something more historically reliable. When a crisis happens, people panic and revert back into a very oldschool state of mind. Speculative financial investments and new hightech paradigms are out. Gold, land, food, and survival gear are in.

For someone to use bitcoin as the store of value, they must first trust that it'll hold value and not collapse with the rest of the economy. With only a 4 year history there is no way to trust that this will be true, and it hasn't been tested in that type of crisis yet.

Most of btc's trading is in USD (CNY trading is mostly fake), and more importantly, most btc business/enterprise/innovation is based in the U.S., so if the U.S. or the U.S.D. collapses, it is a good case to cripple bitcoin. Bitcoin's price is held up mostly by two things, and neither of these are it being used as a store of value (like gold). It is mostly:
A) Speculator buy-ins to ride price trends.
B) The underlying businesses/ecnonomy that bitcoin is used for.
Both of these will likely suffer due to an economic collapse, and most of the support for bitcoin will be lost. This will likely outweigh those trying to use bitcoin as a store of value.

Instead of a pressure to get into bitcoin, what we have has a pressure to get OUT of bitcoin, and a reduced demand. Sure, there may be more dollars, which should theoretically raise the btc/usd ratio. The problem is, that people need ALL of these dollars. This is due to:
A) The very same inflation we're talking about
B) Needing to do extra emergency spending due to the crisis, including

1. Food/Water
2. Shelter
3. Land
4. Guns
5. Precious metals
6. Extra spending just to have fun before the apocalypse and enjoy the dollars while they still have value.
7. Arrangements to relocate to foreign countries

I have a banker freind who I mentioned bitcoin to. His first reaction to me was "you have 45 days to sell and get out". I was shocked and confused by the response. He then discussed with me the impending ecnomic collapse. This was 30 days ago...



If anyone is wonder why my sentiments have been annoyingly bearish over the past month, it is not just because of charts and squiggly lines.

Because Bitcoin is never manipulated?


- I don't think Bitcoin has yet earned the trust people are attempting to attribute to it.

Hmm other than that I basically agree with everything your saying.

This is a fiat world where everything is manipulated. The current behavior isn't really a good measure for the hypothetical behavior in this scenario.

HA FOOL!

That quarter Bitcoin is now worth two boats!

Oh Shit, no wait a minute, now it is only worth half a boat! Hey, give me my fkn boat back!

Wait!? What is this?, Now the exchange won't give me my money until I prove where my Bitcoin came from!

Fuck them, I will just cash it out on LocalBitcoins......"How much premium was that you are charging!? Did you just say 20% under spot!?"

Holy shit!

Next time, just wire the funds into my account buddy, ok?

 - I agree with your statement to a small extent. However, there is a subtle difference between trusting Bitcoin and trusting the dollar. Trust in every other currency is only trust in the issuing party. The central party is the weak link because people are unpredictable. Bitcoin is predictable and trusting in math is more reliable than trusting in a person. The trust people place in Bitcoin is earned, the trust in central currency is given.

 - Bitcoin shares several of the advantages of fiat with the strong property rights of a gold standard. The data on your debit card is similar to Bitcoin. Plenty of people consider those strings of data valuable. You can have the convenience of our current system without the counter party risk. The problem I'm illustrating is a result of electronically transferring a tangible form of wealth. Bitcoin is redeemable anywhere as opposed to a paper note backing an asset where it can only be redeemed at a specific location relative to the asset it backs. The only way to achieve this with a currency backed by a commodity is to use a fractional reserve system.

 - The advantages are different from person to person. I can think of several advantages to real life situations. It might not be advantageous to you specifically but that's not an accurate representation for everybody else.

I think the collapse will be hell. I think it won't be the end of free thinking but that would be the cost of losing the struggle... There are guns on both sides... I hope the dollar doesn't fail but I also hope that an Asteroid never hits the earth, and humanity survives long enough to find life elsewhere in the Universe. Hope is important, but it's not enough without action.

- I think Bitcoin is just as based on trust as any other currency. Bitcoin is a change of opinion away from being valueless, just like everything else.

- Under this premise Bitcoin is no different than dollars. Except that it cannot be created out of thin air, which it essentially is, except instead of a physical object you have a string of data and that is all. I have the same thing now, my dollars are strings of data on my debit card.

- I just don't see why people would gravitate to Bitcoin, it holds no advantage to any other already existing currency.

I would tend to agree, the world doesn't trust dollars, but now we're beginning to veer into a "world without America" scenario and that is a very different discussion from "the world without the dollar". I would also agree that the "guns" are more than likely pushing the world into an authoritarian government. I think the next major collapse will be the end of the free thinking groups/ideals like the bitcoin community. Hence why I hope the dollar doesn't fall, because I enjoy my freedom of speech.

It's a pleasure debating our opposing opinions.

 - Bitcoin isn't a system built on trust. It's just math... There is no possibility of a "Bitcoin run" or "Bitcoin went bankrupt".

 - I know what fractional reserve systems are. Rather than attacking the entire system I'm focusing on a single aspect. When I consider a gold/resource based commodity as "fractional reserve" I'm telling you that people don't want to carry a coin purse around. The resource is deposited into a treasury and a note is issued to guarantee availability. You can only redeem these notes at the local treasury where the resource was deposited... Why would I accept a note to a local treasury in a different state? The only way to eliminate the "fractional reserve" aspect is to do away with paper notes. Bitcoin doesn't suffer the same issue...

 - The change will come either slowly by gradual innovation (before the collapse) or quickly from necessity. If Bitcoin is used to facilitate international trade then the incentive will be there. People don't always get paid to change the system. Sometimes people are forced to adapt out of necessity.

The guns haven't stopped anything, they stalled it. I think money is necessary; just think about it. How else could a dentist and a car salesman make a deal when the salesman has good teeth and the dentist needs a car?

The world doesn't trust dollars, the world trusted gold. The USA fleeced the world without the consent of the world. It's not going to last...

The capital would come from Berlin?

I have a lot of reading to do? As you tapdance around the plain truth... that no store in my immediate vicinity will accept my bitcoin. You sir, need to get out more often. (I know of no store that has QR scanners anywhere for at least 75 miles and I live in a decently populated area and the one store that does sells nothing that I would want or need as evidenced by the fact that it does little business in a decently sized commercial district)

Automatic conversion isn't optional... so that's not of any concern since no government accepts bitcoin for anything that I'm aware of.

If Bitcoin were to be "used by government agencies for the express purpose of paying ANYTHING AT ALL" it would be immediately subverted to all the same taxes and regulations that the dollar is currently held to. Do you think the government would simply go away because the dollar collapsed?

Not touching the rest, but this is at least mildly interesting. The answer is "Berlin" and "the infrastructure is already in place". All a store needs to accept payment in bitcoin is a QR code and a computer with a wallet to confirm payment. Automatic conversion to fiat optional. The infrastructure, such as it is, has been in place for years. And it doesn't break down like the elaborate and expensive systems we currently use do, and requires nobodys approval. It's also free.

You have a lot of reading to do. I would suggest seeing to that before you continue arguing about things you clearly have little clue about.

- I think in a post collapse world trust will be the issue that crushes bitcoin. No one will want something they can't physically control.

- Once again, you are misunderstanding what fractional systems are, so I will leave it be.

- 99% of all trades end up with USD as the end result. Just because you bought something doesn't mean it wasn't dumped into dollars. If things are priced in dollars, and you pay in bitcoins, it still ends up in dollars. You not seeing the exchange doesn't make it not real.

- That is a simple miscommunication. I mean in a more broad way, not just the "exchanges" (i.e. cryptsy, etc.) But to go further, what stores will allow me to use my bitcoin wallet address to pay for something? Where can I go down the street to pay with bitcoins? The simple answer is nowhere. Why? It would require a massive infrastructure change and we're already talking post collapse so where will the capital come from to make this possible?

All the guns in the world have already stopped the collapse. You're allowing wishful thinking to cloud good judgement. What about our world is sound? What about our world makes sense? The fact that we need money at all is a fallacy in itself! But to be truthful, the world trusts dollars because America can land a military anywhere on the planet within 18 hours and crush the opposition.

 - The value of Bitcoin today is not the same as the value of Bitcoin post-collapse. The trust issue isn't big - yet. Comparing Bitcoin in a world where *reliable* money is all tangible; Bitcoin has a distinct advantage because a burglar can't just walk away with it while you're away. It's WAY easier to break into somebodies house and rob the cash under the mattress than to brute force an encryption key.

 - In a non-fractional banking system there will be no such thing as an online purchase. If you can't be there in person to tender the payment then you are operating in a fractional system. I'm referring to the movement of money and the availability at any given point. Money in transit isn't money in hand.

 - Bitcoin is used to trade every day; I don't know where you get that idea... People get paid in Bitcoin for goods and services every day; not all of them are converted to fiat.

 - The exchange servers won't always be necessary. I could send a Bitcoin payment right now and it will never pass through an exchange server. Plenty of people accept Bitcoin already. I disagree when you say, "no one will ever accept bitcoin."

The answers you haven't seen get pushed forward haven't needed to be pushed forward yet. The maintenance is a job, the customers pay in some medium for the service, the company uses part of the proceeds from providing the service to pay for the maintenance. The dollar isn't important here, it's only a vessel for converting labor into food (or whatever else). Bitcoin is a more efficient vessel than the dollar.

All the guns in the world can't stop fiat from collapsing. Actually I think they are pushing for a collapse in hopes that the masses will accept the "necessity" of a power shift into an outright Authoritarian "World Government".

This is all assuming bitcoin becomes a mainstream currency. I know, you wouldn't bet a satoshi on that, but a lot of us are banking on it.

For that matter, what if he doesn't want dollar? He won't, cause it will have collapsed in the scenario in question.

Barter is inefficient. A new form of money will be created when the old order dies. Nothing to worry about, except for fiat bagholders.

What if he doesn't want btc for his boat? That's the inherent problem here. BTC isn't accepted in the mainstream world so that guy would be an idiot to take your BTC. Unless he saw an opportunity to exchange the BTC for USD. Still haven't changed anything because in the end it's still about the dollar.

Ill trade you a quarter bitcoin for that nice boat of yours.

See how easy that was? No dollar or banker needed.

1. I can agree with point 1 in the sense that the market is not an accurate reflection of value.

2. This does nothing to affect the value of bitcoin. BTC is just as prone to corruption, theft, and lying as any other investment tool.

3. The term fractional has absolutely nothing to do with what you're talking about. The dollar is fractional to cover the sheer cost of what it is asked to do. It was made into a fractional reserve currency because it could not expand the money supply in a way that was sufficient to expand the economy. It was finite and so only so much of it could be used.

4. Bitcoin isn't used to trade for anything so your statement is pointless. Please show me where you can buy something for bitcoin.

5. The exchange servers will always be necessary because no one will ever accept bitcoin.

How will all this infrastructure be maintained? How will people be paid for the services they provide to maintain this infrastructure? Some enterprising individual might come up with some great answers but I have yet to see those answers get pushed forward. I have some answers but I'm banking on fiat not collapsing for a simple reason. All the guns say it won't. There are more guns then you could possibly imagine and if the guns say don't accept bitcoin everyone will fall into line. This is the world we live in, it's much more horrible and disingenuous then 1984. Hence why I make my "psychological" reference. All money is simply a psychological tool.

1. I'm asserting that everything on the market today; goods, services, gold, and Bitcoin included are all suffering from the effect of our credit based system. The market is not an accurate representation today of what it should be in reality.
3. Trustless means that you don't need to trust a third party to facilitate your transaction. You don't need to trust the authenticity of the issuer because Bitcoin is a protocol; not a central third party.
4. The dollar must be fractional to facilitate quick or digital transfers; unlike Bitcoin where transfers do not create a fractional system.
5. Bitcoins are tied to every commodity in the same way that every other commodity is tied to one-another. The value of Bitcoin is a factor of trading for goods, services, or investments/commodities.
6. The exchanges are required to trade for fiat. The exchanges aren't a representation of the security of Bitcoin. The exchange servers have always been the vulnerable point.

After fiat collapses the market will correct itself. Anybody who can afford internet now will likely be able to afford the internet after a collapse. The infrastructure already exists, the price will adapt.

It specifically does not require that. Part of the design.