Topic: If Bitcoin became the world (Reserve) currency - page 2. (Read 11577 times)

The commodities you named make poor money, because they are burdensome, short lived, have not enough high supply/demand ratio (gold is at 70 years now, silver 15 years, oil a lot less than a year).
Bitcoin have a S/demand around infinity (because the demand for consumption is practically zero).

Make peace with your mind, even if civilization took a step back of 200 years (like 1815 - Napoleon was just around) there would be world commerce and with it the need of technology.
It cost less to bring stuff from Shanghai to San Francisca than to bring stuff from New York to San Francisco (or Chicago).

I'm amazed with people who can draw porn. That's one hell of a talent

We have a deal! I'll even make it 1 MILLION satoshis!

(but it has to be an original drawing of a naked lady!)

Finally some good sense around!
I offer to draw a picture of a naked lady for one satoshi (my way of guaranteeing my retirement...)

well, we've seen plenty of volatility over the last 5 yrs and part of it has to do with the ongoing issuance/distribution of new coins.  that will probably continue going forward but at a decreasing rate as the curve flattens out.  thus, the supply is constantly changing, whereas with gold it for the most part (except for new finds) has stayed steady for hundreds of years and provided a stable supply backing for various fiat currencies.

but like i said above, perhaps if there was an official fixed exchange rate that was high enough to fill up the huge debt hole of USD that the Fed has helped build up, perhaps that would give worldwide investors confidence that the US will finally exert some discipline on what heretofore has been pretty reckless and aggressive expansion of the money supply for hegemonic purposes.

what do you mean by bitcoin's distribution curve?  If you mean the rate of introduction of newly miined coins that drops by 50% every 4 years, how would that be a problem for price volatility?

This is great news. That means we can all plan for retirement now by simply by opening a bitcoin faucet and collecting some satoshi. Don't even bother buying any btc.

Can't believe all the überbears in here...     

Bitcoin becoming the global reserve currency?

Only?


Bitcoin will definitely become the intergalactic reserve currency in ~20 years. Once the SS Rothbard connects us to far away alien civilizations (Alcubierre drive, baby!), they will surely see the light of Bitcoin and become adopters, and of course HODLERS

In this certain future, if you own half a satoshi, you will be considered a millionaire by today's terms! (Yes. "half a satoshi". We had to add extra decimal places at some point.)

LOL, bitcoin has at least 2 or 3 years of wild volatility ahead of it. If Second Market think they can make a market now and fix/set the price they are going to get a severe lesson and a short haircut.  Like trying to tell a bull where to stand while you ride it's back!  

Yes I know too. It will be food, water, guns, and ammo.

Bitcoin will probably become worthless once people can't even afford internet access or devices and service providers shut down. Before that phase, people wil be dumping as much btc as possible so they can buy survival supplies and metals.

TERA a bull, quoted for reference. As far as $20,000 goes, I think that is a very, very low goal if we look 3-4 years in the future. The USD is going to hell, central banking countries are going bankrupt and when the shit hits the fan, I know exactly what type of currency will take center stage.

My housecleaner in China made $3/hr and had a phone with texting and pictures. Pretty sure a lot of the world can afford a phone.

we already see that Second Market is trying to move to a once or twice daily fixed spot price revolving around Wall St bidders.  Barry has specifically stated this will be an attempt to dampen volatility.  i've been vocally against this but if it meant establishing an official fixed price that could be used as the basis for Bitcoin acting as the backing to the USD system like we had with gold i'd change my mind.

a way to do this might be to have an official fixed market price of Bitcoin at a level that fills the debt hole (quadrillions if you include derivatives) similar to the $20 pre 1933 or $35 post.  that obviously would be at a much higher price than where we're at now and would be used for settling balance of payments btwn countries.

then, acknowledge that there will be an unofficial price used for everyday tx's by individuals that would fulfill the great capabilities of Bitcoin.

i think it is in the interest of the US TPTB to consider backing the USD with Bitcoin once it has proven itself with a few more years of longevity.  they need to consider that we may be at the end of an empire.  they need to acknowledge that printing money but preferentially giving it to banks is not fair and is not helping the real economy or the average American.  they need to consider that we're at the end of a multi-decade cycle for suppressing interest rates.  sure we could go to negative rates like the ECB but i don't think that will fly in the US.  they need to acknowledge that the rise of the broadband internet is analogous to the Gutenberg press and will not be suppressed.  the curtain has been pulled back and even Americans don't like what we see despite being in the enviable possession of the world's reserve currency.  oil is back over $100 and at least historically once above that level economic activity grinds to a halt.  they need to consider that America's power abroad is waning, imo.  our influence is becoming anemic and the world looks at the Middle East and what's happening in Iraq and sees the waste and hypocrisy of spending trillions of USD to fight that war.  even our long term alliance with Saudi Arabia is at risk given today's threat by their ambassador.  China has made huge strides in Africa and with Iran and in fact has accumulated a huge gold war chest. 

btw, i'm an optimist about the future.  i think Bitcoin has the potential to really supercharge the world economy if done right.  and despite the heretofore obstructionist activities of the US gov't towards Bitcoin, we still have the chance to perpetuate US prosperity and stay on top if we choose to demonstrate to the rest of the world that we will back our USD with some discipline.  we're in a unique position right now to do this as most of the core devs are American, we have the most full nodes, and the great majority of VC investment and companies has come from here.

TPTB shouldn't see Bitcoin as a threat but as an opportunity.

the main problem as i see it is the sustainability of the current fiat system.

with the spread of info the internet has allowed, more and more ppl are aware of the inequities in the business of money production by central banks worldwide and especially here at home by our Fed.  if one is to believe Piketty's work (i do), income inequality is at all time highs as a result and inflation in certain parts of our economy are at ridiculous highs.  as a father of 2 private university students and payer of our families health insurance, i am acutely aware of this.

of course, today's version of our TPTB don't want to change things.  but i think that is more a function of the American TPTB.  elsewhere in the world, i'm seeing an increasing willingness to abandon the USD world reserve currency system with Russia and China being the most visible examples.  so i do think we have a problem that most Americans don't want to acknowledge mainly b/c of our privileged position.

is gold $45 skyrocket today a warning of things to come?  economies always cycle and we are about due for another conflagration as tvbcof likes to say.  depending on how bad this one is will determine alot of what's to come with our monetary system.  assuming Bitcoin's technical worries can be overcome (and this may just be a matter of time vs. a protocol change) along with increasing confidence that it has long term longevity, i don't see any reason why it couldn't become a reserve for the USD system.  if the US wants to stay on top, this may be it's best move to allow this to occur.

technically a reserve currency doesn't have to have a large volume of tx's; only enough to settle international balance of payment deficiencies on a daily basis or even realtime.  this would be a major improvement over using gold where these imbalances were of necessity allowed to build up to unworkable levels culminating with the French calling on Nixon to cough up their gold only to be too late with Nixon saying f*this.  the advantage to the Bitcoin protocol is we could keep 1MB block sizes and the market would drive up the tx fees and tx amounts to levels too high for everyday tx's by individuals.  i know this isn't the vision most Bitcoiner's have and i'm not even sure it's my vision but this scenario would fit with Bitcoin becoming the backing for the current USD system.  the other thing i like about this is that it shouldn't cause a huge disruption to the current system if everything goes well.  but surely the value of Bitcoin would have to rise significantly to be able to back all the USD denominated debt out there plus minus all the derivatives.

the only problem i see is that Bitcoin's distribution curve has not yet completed itself which would be a problem for price volatility.  not sure how to solve that one.

I'm a bull (At present) because long term I think it may end up at $20,000 or so  (that's over 3000% of today's prices) , but I don't think it will become the world reserve currency.

And you wonder why people think you're a bear

This may not be true by the way - being a reserve currency doesn't necessarily mean that transaction volumes need be insanely high. Gold doesn't exactly come with low transaction costs/high velocity but it survived as a reserve currency for a long time. I realise this isn't such a useful example now as technology has moved far forward, but we can envision a world where perhaps Bitcoin is a global reserve currency used of large transfers, fulfilling the settlement/clearing role that central bank reserves now do, and there are lots of sidechains being used for more frequent/consumer-grade transactions. Bitcoin in its current form is already not very good for bricks-and-mortar purchases, so I am hopeful that the dev changes to allow side chains will occur.

But to be honest, I also don't think it likely that BTC ever ends up as the world reserve currency. There are too many structural, technological and political problems along the way.

The limited quantity is one, I know Austrians love this characteristic but most economists don't. As Tera points out, the current transaction limit is another. Finally, I don;t see why the people that really have the power in the current order would ever allow a new order with BTC as a reserve to emerge, and they certainly have the power to stop this outcome (though I think killing Bitcoin is near impossible).

If Bitcoin was used as world resurve currency, it wouldn't even operate due to scalability issues. It would be too many transactions per block and might crash and the blockchain would grow to many terabytes or petabytes, not able to fit anything let alone be used by an end user. Large centralized corporate server farms would be needed to access the network and provide services to end users which would completely defeat the purpose. People would be hacking into apple, google, bitcoin distributions sites, and dns servers all the time to distribute infected wallets/apps that steal users private keys. Then someone would crack EC and steal all of the world's money.   And of course it would be banned by governments long before any of this was able to happen.

i'm arguing that the least disruptive way for Bitcoin to mesh with the existing monetary system is for it to assume the function that gold did prior to 1971; as backing for the world reserve currency USD system. 

Hey cypher can you explain what you mean as I don't think I understand. I thought you were arguing that we'd see 10:1 BTC-promises to RealBTC ratios in a fractional reserve BTC system.