How can collapse of USD affect bitcoin? - page 4.

Ibian

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Quote from: MatTheCat on March 23, 2014, 10:50:27 AM

Quote from: Ibian on March 23, 2014, 09:26:14 AM

Hyperinflation makes people use their paper money as wallpaper, kindling, toilet paper... why wouldn't bitcoin take over in such a scenario?

Because Bitcoin isn't backed by anything other than it's rate of convertability into fiat currencies.

If I could reliably convert Bitcoin into X ounces of precious metal, X gallons of Oil or X units of electrical energy, then we might be talking. Even if some government that I needed to pay taxes to required payment in Bitcoin, then Bitcoin might have a case as a 'pretender to the throne'. But as things stand, Bitcoin is nothing. It is a means of quickly transferring wealth around that works to the extent of liquidity in the market. Because the liquidity is provided almost entirely by speculators, the rate of conversion is prone to being highly volatile, thus rendering Bitcoin totally inappropriate for being used as a reliable unit of exchange.

We had this argument. Many, many times just in the few months I have been here. Go reread some of the old threads.

MatTheCat

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Quote from: Ibian on March 23, 2014, 09:26:14 AM

Hyperinflation makes people use their paper money as wallpaper, kindling, toilet paper... why wouldn't bitcoin take over in such a scenario?

Because Bitcoin isn't backed by anything other than it's rate of convertability into fiat currencies.

If I could reliably convert Bitcoin into X ounces of precious metal, X gallons of Oil or X units of electrical energy, then we might be talking. Even if some government that I needed to pay taxes to required payment in Bitcoin, then Bitcoin might have a case as a 'pretender to the throne'. But as things stand, Bitcoin is nothing. It is a means of quickly transferring wealth around that works to the extent of liquidity in the market. Because the liquidity is provided almost entirely by speculators, the rate of conversion is prone to being highly volatile, thus rendering Bitcoin totally inappropriate for being used as a reliable unit of exchange.

roslinpl

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IMO value of a dollar have nothing to do with Bitcoin price.

Those are totally different things.

jeppe

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The USD value of BTC would go up as hell!! But if the euro would have the same value as now the euro/BTC would be the same, so the actual value of BTC would not go up.

Wilhelm

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Just like all crashes seen before. BTC and the world will take some time to break away from this bad fiat.
Maybe US citizens will flee towards BTC, gold and silver making the price go sky high due to scarcity.

master-P

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https://keybase.io/masterp FREE Escrow Service

It could put a lot of exchanges out of business I guess. More people would be trading BTC for goods than for fiat maybe.

Ibian

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Hyperinflation makes people use their paper money as wallpaper, kindling, toilet paper... why wouldn't bitcoin take over in such a scenario?

arepo

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this statement is false

Quote from: Dotto on March 23, 2014, 09:19:33 AM

Hi all,

It seems collapse of USD in mathematically unavoidable, I wonder how could it affect bitcoin.

Guess there is going to be a massive dollar inflation wave, would this skyrocket the BTC value or would it collapse it too?

it would skyrocket the BTCUSD rate simply because the USD would rapidly lose purchasing power. but i don't think that's what you're asking.

would capital flood into BTC as a safe haven? or would the BTC price crash as well, as it is irrevocably tied to global financial health?

this has been an active debate lately. many on these forums believe that BTC is a good hedge against the global economy, but some posit that in the event of a real financial catastrophe like hyperinflation of the world's reserve currency, BTC would suffer. i am undecided.

--arepo

Dotto

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No maps for these territories

Hi all,

It seems collapse of USD in mathematically unavoidable, I wonder how could it affect bitcoin.

Guess there is going to be a massive dollar inflation wave, would this skyrocket the BTC value or would it collapse it too?

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