Topic: If bitcoin becomes world's reserve currency? - page 3. (Read 3184 times)

The IMF wouldn't control or replace the dollar.  Under that plan (which I think is unlikely to happen) the SDR would replace the dollar as the reserve currency of the world.  For most of the history of this country the US dollar wasn't the world's reserve currency.

All reserve currencies eventually are replaced and it always because the entity printing the reserve currency abuses that special status.  The dollar being the reserve currency means that other countries are defacto obligated to continually hold large sums of dollars.  To partially hedge those holdings they usually buy US debt (interest offsets inflation losses).  As long as the nations of the planet trust the reserve minter to not excessively devalue those holdings then the system "works".    Generally it works fine for 50 to 150 years depending on the restraint of the minter.  It does however distort the free market pricing of debt.  Since foreign nations collectively need to hold trillions of dollars in US debt it drives interest rates on that debt down and subsidizes the US government to spend spend spend.  I mean it is almost free money so what is a hundred billion here and a trillion there.  The US govt "wins" and everyone else "loses" and the more debt the US govt racks up the more likely a default is too occur (of the treasury just hyperinflation that debt away to avoid an official debt).  That leads to resentment and eventually a new currency is used but the process will repeat itself.  The US wasn't the first and it won't be the last.  It works as long as you trust governments to spend within their means and not abuse that special status.

The American people are naive and spoiled for sure but they would never accept the IMF controlling currency. That might be the thing that drives main stream Americans into bit coin.

Watched a video of Jim Rickards being questioned by the editor of Reason magazine last night. He claimed that, in Jan 2011, the IMF drew up a ten-year plan to replace the USD with the IMF's SDR (special drawing right) as the reserve currency and currency of international settlements. The SDR is just one more fiat currency backed by nothing.

A little over three years into the plan, (again according to Rickards), the world's financial ministers are regularly progressing towards this end, discussing it along with the more mundane things that occur at their meetings.

I would prefer bitcoin take that mantle. But either way, looks like the USD's days are numbered.

Hows that different than BTC being $580?

Sorry, you're right on the poor thing, not everyone is poor but most are.

Oh and LOL you think that number is real, I'll try to explain it to you though if you're going to actually read my explanation, what's happened is that what I would call the 'real' net wealth is essentially being doubled or tripled through money printing so it's a bit like taking £100 and then printing more money until you have £1,000,000 oh look! I just became a millionaire! They go around telling all their friend and other countries and they actually buy into it.

It's such a simple con that people fall for, but now everyone has realised what's going on and that people don't actually have products and services worth that much, fact is, to pick up that much net worth globally we'd have to either take up asteroid mining or take over Afghanistan completely and mine some giant holes in it to even come close to the numbers these central bankers have made up.

If you're actually bothered about learning how the bond market and paper money works this video explains it perfectly: https://www.youtube.com/watch?v=iFDe5kUUyT0

And goverments use internet, likewise let governments use bitcoin on top of internet to buy oil and foreign exchange reserves.

I can't imagine Bitcoin will ever become a reserve currency, I just see this as a new protocol for entities to implement within their businesses. Similar to how email's protocol SMTP was built ontop of TCP/IP. This was built ontop of TCP/IP to serve as a protocol for wealth transfer and storage.

Everyone isn't poor. The net worth of the world is estimated at $223 trillion.

If these currencies are so valuable and doing so well then why is everyone poor? Answer me that, the symptoms we are seeing in the currencies and countries you mentioned are not ones of a functioning economy.

Really.  The US dollar is currently the defacto world currency (although how much longer remains to be seen) so that means all other national currencies are worthless?  Euro? Pound? Yen?  Interesting.

It can only happend if they used btc for buying oil

value will be that high as people want

The established system will bring great violence before control is relinquished.  That's a given.

If that happens government paper currencies will become worthless so governments will have to do what those of us who don't have mining equipment and bought early have done and offer up services to earn it, like a proper economy does, I expect though if governments become desperate and fail in a 51% attack they will devalue their currency first though to try and destroy it.

Okay what i meant was,my country actually buys a lot of dollars and keeps it in reserve, whenever the INR gains against dollar the reserve bank buys even more thus maintaining dollar ruppee at a range of 1dollar =60 rupees.

That reserve is actually to bail out in case a balance of payment crisis arises, which actually happened in 1991 and ever since became trapped with that loan shark IMF.

So i was actually suggesting instead a country throw that dollar away and buy bitcoin as reserve, as the value of bitcoin rises the foreign exchange reserve value also rises, thus greatly to benefit the nation.

That's easy and has been answered a few times by big boys.

If BTC replaces the USD it would be worth roughly 1M each and if it were the only currency it would be around 3M each. At that point we would be dealing in satoshis, which would be worth 1-3 cents each.

I think there will be other currencies and so i think overall if BTC survives the next 20-50 years it should be anywhere between 100k to 1M provided it stays the main currency. So imagine things like ether and other coins holding a key part of the market but BTC staying the main thing 1M is possible with BTC being 30% of the world currency.

But keep in mind that for this to happen our society has to fundamentally change. this won't be quick and this won't happen without major fights.

There is also the chance that better currencies will take bitcoins place and then btc is not worth anything.

It might not be what it means, but it is what is almost inseparably linked with bitcoin becoming a world reserve currency and since the OP was asking for the price of a bitcoin then, I might as well take into account the major factors for it.

That scenario you describe is not what "Bitcoin becomes the world's reserve currency" actually means. The system you describe is just the same system as now, just that banks would be able to hold Bitcoins as assets on their balance sheets. That's not at all the same thing as Bitcoin itself being a reserve currency. Reserve currency implies that parties are actually settling transactions in Bitcoin itself, and the design of Bitcoin is such that that kind of settlement is analogous to settling in a commodity money.

Thats how it should be in a free market, but even today a $1 note is worth the same as a virtual $1.
If you are forced to accept IOUs as settlement of debt, then it's worth the same as the real asset it's supposed to represent as people can just not pay up in actual BTC and settle the debt later on with IOUs.

An increased value of actual BTC could be the case if people predict the system to fail soon and want to get something they can use even after that happened, but that would take lots of time and by them bitcoin would probably have been replaced.

Personally I value real gold a lot higher than gold IOUs (which I think aren't worth anything as it's well known there not enough actual gold to pay up on them) but most people think it's basically the same as they are told it's backed etc.
Fortunately we are seeing a shift in that mentality. It's slow but it's there. However, if we let bitcoin IOUs become the norm regarding bitcoin payment processing, we won't get out of the system. And it's not like thats far away. it's been done for quite some time by Gox and it's highly likely there are others doing the same as we speak.
Why wouldn't someone print free money if he has the option to do so? This is a scary scenario, I know. But it is what can happen and it is what people will accept as a given if marketed correctly and there is no counter pressure.
We have to be extremely careful in that regard these days. We as early bitcoiners owe our children a system that is a lot less corrupt and a lot more enjoyable than todays system. We have done a great job with the basics, now it's out job to not lose the free currency we all came to love. It has been done once with the Internet, the free speech channel and it can be done again.