1.Most cryptocurrencies have total limited supply coins like BTC, if it becomes currency, as we know, currency is used to exchange values in goods/services, given that the global economy is growing, how could the limit supply support a larger and larger economy? In history, silver/gold indeed limits economy growth, either in old Mesopotamia or in old China dynasty of Ming. And in order to resolve it, governments used paper note to provide fluidity. But governments will never limit itself, then economy crisis happens. Now cryptocurrency goes to the old time - limited supply of currency. So as the economy growing, more goods/services are supplied, then BTC will be more and more valuable, then our human nature will prevent us from spending, or we will spend less than a inflation currency, so that our economy will grow slower and slower.
So, in order to resolve this problem, shall we bring inflation to BTC/altcoins or we just publish more cryptos to support different areas of economies?
2.Where is the anchor? Who control the anchor?If you buy a house, you loan from Bank, if it’s BTC, as the price of BTC is volatile, how can you make sure that you can repay the loan in the future. The fact is that loaning in BTC is going short on BTC, there’s huge risk in it.
A currency cannot be too much volatile, or it cannot be used as a bridge to transfer values. So in crypto world, where is the anchor?
3.Where is the elasticity of Crypto Currency? How loan actually work?Economy has ebb and flow. If in economy crisis, we need to boost consumption, if the economy grows too fast, we need to curb it. How can crypto currency resolve this problem?
Loan also acts as a way to smooth consumption. If in crisis, I loan, if economy is well, I repay. So who will acts the way now government act to balance the crises and growth?
4.Will fiat currency disappears in the end? Then what the role government will play? Do we need tax? How public services be financed? Will miner whales become rule designers?
The US governments relies on US Dollar, governments using USD to lay liability on citizens, tax them, or to release public debt to make government procurement to provide fluidity or boost economy growth. If the consumer do not want to consume goods, government will pay instead of consumers. If fiat currency disappears, how can public services be served? Believe it or not, companies will not do it. Governments still can lay tax on people, but it’s very very hard. For fiat currency, so many companies can find way to do reasonable tax avoidance, for crypto currencies, I doubt that governments can find ways to tax properly.
5.How can we prevent crypto currencies from doing evil?For example, gambling, drug deals, nuclear weapons.
6.How can we prevent gap between wealthy and poor from growing? How can we finance those unemployed?In any system, there is a rule - Positive Feedback(Matthew Effect), which means, power leads to more power, wealthy leads to more wealthy.
For to every one who has will more be given, and he will have abundance; but from him who has not, even what he has will be taken away.
— Matthew
Those who are poor and lost their jobs, who will act the role of The Final Employer?
Our graduated rates of income tax, to some extent, reduce the gap between rich and poor. But due to Matthew Effect, if 1% controls 99% BTC, how can it becomes the currency? The poors will fight and invalid the crypto currency, to establish their own governments, then history goes back.
7. Finally, please give examples that what can only be done through BTC but fiat currency?
If you have any answer to any of those questions, please leave a reply.
