Topic: If Bitcoin became the world (Reserve) currency - page 4. (Read 11594 times)

I am not an expert, but m3 seems like a bad money supply to compare with to me.  Then you assume bitcoins couldn't be used in loans etc. (which they already are).

Nice summary!  I know everyone thinks the Chinese are against bitcoin, but they HAVE been making noises of late about seeking an alternative to the dollar as the world reserve currency (For exactly the reasons you outlined). The Euro was once on the cards for the title, but 2008 saw the end of that.
So it would not suprise me if the Chinese state were secretly accumulating bitcoin before becoming positive towards it as a new and fair alternative to the dollar.

Nice discussion going on

Fiat is an IOY for product it has no real value and should be rare and hard to obtain for it to work as an IOY.
The value of fiat is based on work that must be exerted to obtain it. (going to work)
The problem is that the supply is not limited thus creating inflation.
If fiat loses value you can get less product for it and visa versa.

The same can be said for bitcoin, it can also be an IOY for product. The same applies, it is rare and hard to obtain for it to work as an IOY.
The value of bitcoin is based on work that must be exerted to obtain it. (mining)
For bitcoin the value is truly limited and deflation will occur.
If bitcoin loses value you can get less product for it and visa versa.

etc. same applies for gold


Why can Bitcoin be an ideal reserve currency?

quote wikipedia "
A reserve currency (or anchor currency) is a currency that is held in significant quantities by governments and institutions as part of their foreign exchange reserves, and that is commonly used in international transactions. Persons who live in a country that issues a reserve currency can purchase imports and borrow across borders more cheaply than persons in other nations because they need not exchange their currency to do so. According to economists such as Valéry Giscard d'Estaing, a former French Minister of Finance and president, a reserve currency gets certain benefits called the exorbitant privilege.[1]
"

Bitcoin has sufficient quantities.
Bitcoin has international transactions.
Bitcoin makes nobody an issuer, all are equal.
Bitcoin can be trusted since nobody controls it.

The only problem is that bitcoin is not equaly distributed and thus wealth is not equally distributed. But then again neither is gold.

I agree, but I think the original commenter was making the point that there are still a lot of people that are so poor they do not have even phone access let alone bank or internet.

There are more people with a cellphone connected with the internet than there are people who have a bank account.

Banking is ridicously expensive compared to owning an internet phone, especially for poor people. Bitcoin is much more accesable to the poor than banking is. And that's one of the reasons it will catch on.

The poor might even come out ahead of the slackers who still believe in fiat, just because it works for them now. By the time they realize the fiat system is failing they will be poor in bitcoin terms, and their fiat will be quite worthless.

the FIAT VALUE of cost of living does vary, so does the spot price of gold. and also the price of car fuel.. i see many car fuel station have a variety of prices. but PLEASE i beg of you for the 4th time, will all readers stop thinking about the FIAT value
http://www.coli.org/ <- check it out and see that prices vary dependent on state/country
yet the individual items have a fixed value of the INDEX


half a gallon of milk is ALWAYS FIXED to be 0.034522 of the unit index of cost of living. so yet again.. forget the FIAT price. imagine bitcoin was measured against the INDEX (1) and milk was 0.034522 of (1)

now as i said in an earlier post on this topic imagine that bitcoin this year is 2 weeks of cost of living INDEX(1)

we have now got rid of the reliance of FIAT measurements. fiat measurements do not come first when using the cost of living index, they come last.

so again before we even look at what bitcoin is worth in fiat. lets stick with the bitcoin is worth 2 COL indexes
meaning milk is 0.017261btc.

meaning if a retailer increased the FIAT price of milk. milk via bitcoin would still be 0.017261btc.

put simply while the fiat prices of the world go crazy, and the dollar inflation explodes where it costs $1000 for a loaf of bread ( research zimbabwe dollars for examples of inflation explosion) a loaf of bread will still be 0.017261btc. and people can still do 2 weeks of labour for 1btc minimum wage.

where as in FIAT LAND employers are giving employees wheelbarrows of bank notes and new bank notes are getting printed by the milisecond, while the dollar collapses. those in bitcoin land have a stable measure of cost of living.

so forget FIAT prices!!!! PLEASE.. the bases of reserve currency is not about the FIAT price. please get the sheeple mindset out of your heads, a reserve currency is not based on dollars

Cost of living indexes don't work that way. your list of lets says will vary from region to region.

no, your not getting it

imagine we had a unit.. (1)

now lets say basic fair value rent should be 20% of unit
now lets say basic income tax should be 20% of unit
now lets say a loaf of bread should be 0.25% of unit
now lets say a 6 pints of milk should be 0.37% of unit
now lets say a joint of beef should be 3% of unit

now if someone in america was to buy all the items listed.. one whole unit might cost them $300 in detroit, but would cost $500 in california because california charges more for rent and food and has stupid tax costs.

but no matter what if you use bitcoin it would be the same 0.2btc to rent an apartment. even if the $$ rent was higher in california. but also the $$ cost to get a bitcoin in california (minimum wage) was higher
lets get more local.

calculations AFTER unit establishment
Lidl/Aldi milk=£1(current actual price) so a full 100% unit = £400
ASDA milk=£1.16
Tesco milk=£1.40


so imagine 4 pints of milk in the UK was 0.25% of unit (bitcoin). in ASDA milk would be 0.25%+0.04% Lidl/Aldi milk would be 0.25%+0% and tesco would be 0.25%+0.1%.

yes imagine it like gold, with a variance of local spot prices depending on which pawn shop you go to

i think you will find if you looked at the american cost of living index you will see what i mean. http://www.coli.org/

if bitcoin becomes a reserve currency. the bitcoin reserve stays the same. and its the FIAT / local prices of different places that always change.
this is where states, councils, governments work out local minimum wage by the unit index

please realise the true end result of being a reserve currency

Franky, I GET IT! honestly, perhaps i'm not conveying how I get it, but I do!
We have an index in the UK called the Retail Price Index (RPI) which is basically a measure of the cost of living for average jo. That index is currently measured in pounds sterling but could equally be done in BTC should we choose.

no your missing the point. you are again putting a dollar price on the cost of living FIRST and then attributing it to a bitcoin price.

imagine it this way, imagine that it averages out that the cost of living was
2 loaves of bread, 6 litres of milk, a couple joints of beef, a large sack of potato's 5kg of veg, 7 tins of baked beans etc
for a weeks average stable diet.

where for instance no matter the dollar or yen price of these items people still need on average the same nutritional ingredients week in week out. so this is a better fixed value, than the dollar.

so today people can pay their rent (fixed) taxes (fixed) and all those ingrediants for 2 weeks with just 1 bitcoin.. in any country, because bitcoin is the reserve currency to measure against th poverty line, commodities and fair tax/rent.

obviously with demand for bitcoin increases people can afford more food or get more luxurious apartments for the same single bitcoin, as its true reserve value has increased due to demand.

and all of this can be measured without even mentioning FIAT

I take your point, but do not see it as being practical. Perhaps a commodity like gold would be the next best comparison, thats been relativly stable compared to cost of living over the decades, so is a good proxy for it. When people see at todays prices 1 bitcoin or $1200 buying an ounce of gold and in a year that same bitcoin buys 10 ounces but $1200 still only buys 1 oz, it will sink in...

On a lighter note, I noticed in a documentary the other night economists have reached the conclusion that one of the most stable forms of measuring value over hundreds of years has been the relative cost of different types of sex purchased in brothels! Apparently the Romans paid pretty much the same as modern man! So should that be the new comparison? 

exactly my point.
if today bitcoin is worth 2 weeks of average living costs (poverty line) then people can calculate the dollar, euro, yen price of that.

the 'comparitive' needs to move away from the dollar and put against something stable EG
if bitcoins for the next 2 years stayed at 2 weeks of living costs. people can always buy 2 weeks of food, bills with bitcoin, even if the cost of bread went from £$1 to £$1.50 bitcoin will remain stable and people will see that its the dollar that is moving.

people will see that bitcoin moved from $600 to $900. people will also see that a loaf of bread for bitcoin was 0.00166667btc. and in 2 years is still 0.00166667btc thus they will see how much inflation the dollar has.

the only time bitcoin vs living cost would change is from the demand of bitcoin. EG this year 1 bitcoin would buy 2 weks of living costs. next year bitcoin would buy 3 weeks of living costs. which again if the price of bread in dollars also went from $1 to $1.50 not only shows a bigger dollar gap between usd and bitcoin it would calculate that bitcoin would be $1350.

and instead of being 0.00166667 for a loaf of bread it would be nearer 0.00111111 for a loaf of bread

My point exactly, though investors have typically used trade weighted baskets in the past to calculate how each currency was doing. That will probably be impractical with  bitcoin, so a new paradigm will be needed.

This will never happen. What will happen, is people will flip the equation.

In the near future people will go from thinking about how many dollars a Bitcoin is worth, to thinking about what fraction of a Bitcoin a thousand dollars is worth.

When this shift in collective consciousness occurs, you'll know it.

Both. It's all relative.

Your perspective depends on whether you think primarily in terms of dollars or in terms of BTC. No matter how you look at it, though, the trend is clear.

People compare to the dollar because it currently IS the world reserve currency (Even though Euro is in fact the biggest currency).
But comparing is not the same as pegging! In fact, you could just as validly argue we are comparing the $ to bitcoin not vice versa.

Is the dollar sliding or bitcoin gaining? until bitcoin goes into trade weighted baskets there is no valid comparison.

Why? Isn't gold and other reserve stuff valued in USD?

the first step to become a reserve currency, is to stop  being measured and valued to the dollar.

this is simple. instead of saying bitcoin is $600 £400 we need to say:

bitcoin is 2 weeks minimum living costs of all countries

and as the demand for bitcoin increases, it will become 3weeks, 4 weeks.. which people can then translate to their native currency value, commodity prices of oil, gas, livestock, etc.

again we need to stop pegging bitcoin to the US dollar. and instead peg it to actual peoples lives.

I'm sorry, you are wrong, at least two suppliers doing BTC denominated debit cards now (MasterCard):

https://bitplastic.com/
https://xapo.com/

mastercard/visa don't allow this ... even Paypal don't allow this now (that it have "plastic card" associate to a credit revolving system ... and not to use the sold of the paypal account).