Topic: Is Bitcoin possible to build a new "Bretton Woods system" (Read 244 times)

Thank you for your wonderful response, I understand what you mean. In my opinion, the future must not be the government's initiative to choose Bitcoin, but that they have to accept Bitcoin. Governments can pass laws to make gold lose its currency. But it is difficult for them to pass the law to make Bitcoin lose its value. Because Bitcoin is the people's choice. At present, there are more and more groups in the world, because of the birth of Bitcoin, they have obtained the liberation of their minds. They began to doubt the rationality of the government's monopoly on currency issuance. Bitcoin has given the people of the world better choices. Bitcoin's consensus around the world is constantly strengthening. When the value of legal currency is getting more and more depreciated, more and more people will take the initiative to choose Bitcoin and abandon the legal currency. In this case, governments will have to establish a new currency system that adapts to the existence of Bitcoin. Of course, this process may be very long, and it may take 10 or even 50 years. However, I firmly believe that no one can stop this trend.

If Bretton Woods didn't work with gold, what makes you think it will work with bitcoin?

Also I am not sure if all the world governments will adopt bitcoin like that. It is more likely that they will want to go back to the gold standard because nearly all them already have gold in their central banks.

So it is a solid no.

The main task of the "New Bretton Woods System" is to effectively deal with excess liquidity. The difficulty lies in how to solve the problem of serious excess.

Global excess liquidity is an inherent defect of the existing international monetary system.

The core problem of the problem of excess global currency liquidity lies in the lack of a complete, reliable, and unconditional trust system that everyone can actively abide by.

Bitcoin is the only currency with a truly limited supply, which cannot be manipulated by any centralized organization, thus solving this problem. Through its unique design, it attempts to eliminate the trust of established financial institutions in the world and put power back into the hands of individuals. There will be no more stories of thieves calling and catching thieves in history, but the history of legal tender is full of destruction of this trust. There is no interest community, and if there is, it is only temporary.

Bitcoin breaks the shackles of the central bank for the first time, and for the first time it can use currency creation functions, not just authoritative institutions.

Bitcoin plus the underlying technology of the blockchain, irreversible, non-tamperable, asymmetric encryption and other characteristics.

Bitcoin is also the first completely transparent and incorruptible currency.

Bitcoin is also the only currency in the world that does not require quantitative easing. It can effectively solve the problem of global currency excess liquidity.

Of course, imagination is always good, and the road to realization is indeed tortuous. I will do my part.

Not really sure if countries governments would agree with having a really volatile reserve and a reserve that they can't even control too. And another problem is that US dollar is current reserve currency of many countries and I don't think that they're going to accept another taking over or becoming their competitor as a reserve currency, it weakens their hold or influence on a country if they don't do that.

In my opinion, the current COVID-19 pandemic has caused serious trauma to the world's economic system. At present, governments of all countries are responding to this crisis by printing and issuing currencies, but it is difficult to fundamentally solve the problem. On the contrary, it may trigger a whole new world financial crisis. This may lead to the gradual collapse of the existing world monetary system. In the end, prepare for the establishment of a new world currency system centered on Bitcoin.

Bitcoin has no commodity market.Bitcoin is not a commodity. This is an advantage over the Bretton Woods system, but one of the characteristics of Bitcoin is that there is no commodity transaction, or that Bitcoin does not have the value anchoring required by the market. At this time, Bitcoin has become a financial speculation product for many speculators (Musk) or institutions. This is a very bad thing.

Bitcoin's replacement of the US dollar as the world's reserve currency is a lofty goal, and the road is long and tortuous.



The large-scale spread of the new crown virus around the world is bound to bring downward pressure on economic development. In fact, it has stimulated the development of Bitcoin to some extent. Since the collapse of the Bretton Woods system and the decoupling of the U.S. dollar from gold, these are the needs of the development of the times. Bitcoin will eventually become the world's currency. Bitcoin is scarce, unchangeable and has nothing to do with politics. By the way, I hate politicians.

Thank you for your wonderful reply. As mentioned in my article, Bitcoin has many similar properties to gold, but at the same time Bitcoin has more unique advantages than gold. In my opinion, the issuance of legal currency must be supported by value, rather than unlimited issuance without any restrictions. Bitcoin is the best value support. The biggest advantage of Bitcoin over gold is that no one can control it. The government can prohibit the currency status of gold through laws, but it is difficult for the government to directly prohibit the circulation of Bitcoin. In the end, the government can only adapt to the existence of Bitcoin. When a huge financial crisis erupts in human society in the future, the existing world currency may collapse. When human society rebuilds the currency system, it will find that Bitcoin is the best choice. Therefore, a brand new Bretton Woods system centered on Bitcoin may be established.

gold has 2 markets..
1. asset (treasury reserve) market of world bank exchange
2. commodity(product manufacture) market of many exchanges

bretton failed because the demand/supply in the (2) market kept cutting into the (1) market. causing an instability

to sell gold from (1) they needed to literally burn bank notes.
to gain gold into (1) they needed to literally print bank notes.

with electronic manufacturing causing huge demand of gold. this caused a bad game of burning and printing dollar. that became uncontrollable.
thus in the end debasing the gold value of a dollar instead of rapid burn and prints.

..
bitcoin has no commodity market
bitcoin is not a commodity. it is a pure value asset. so more easy to control.
it has one purpose.

so fiat currencies could peg their fiat to bitcoin.

the only issue is that it would require exchanges to adopt circuit breaks to not allow bitcoin to move more then 1% in any direction in any one day.

and that would require alot of exchanges being regulated into such thing and also alot of inter-action with each other to arbitrage orders to keep them all in the same 1% each day

..
the actual solution is not to re-invent a bitcoin-backed-fiat to replace a countries legal tender.
but to have an option of accepting more then one tender. fiat and bitcoin. as 2 separate currencies

I think that it's a possibility but I don't think that the current reserve currency which is the USD is going to let that happen anytime soon. I am all for bitcoin doing this but given how it's a pretty neutral currency, it will have a hard time being accepted by many countries not to mention that there are other aspiring currencies out there that want to be a reserved currency.

There are probably three reasons for the collapse of the Bretton Woods system：
1.The growth of gold is much lower than the growth of productivity.
2.Uneven distribution of gold reserves.Gold coin minting and free circulation are destroyed
3.The outbreak of the First World War led countries to use gold to buy arms. Not freely convertible

Then we simply replace gold with Bitcoin to see if Bitcoin can solve these problems.
1.The output of Bitcoin is diminishing, and the final output of Bitcoin is close to 21 million. After that, productivity continued to develop. It also leads to fewer and fewer bitcoins needed to purchase items.
2.When a powerful country attaches importance to Bitcoin, it will of course build Bitcoin mining machines madly. Such a large amount of mining rights have returned to the hands of big countries, and a large amount of chips, it is easy to manipulate the price to achieve the purpose of allowing the holder to hand over the chips.In an even more extreme case, printing money to buy bitcoins on the market, I'm not sure if I have been doing so now.
3.When the war breaks out, will the network be cut off? After the big powers use Bitcoin to buy arms, the circulation on the market will of course also decrease.

Bitcoin cannot solve these problems inherent in gold, so why do you need to re-establish a new Bretton Woods system anchored by Bitcoin?

I think that if people want to truly understand Bitcoin, they need to learn Bitcoin from the perspective of different disciplines. Bitcoin is the crystallization of human multidisciplinary, representing a whole new human civilization. In addition to economics, computer science, game theory and other disciplines, I think we also need to understand history, especially currency history. Only when we truly understand the history of currency can we understand the historical mission of Bitcoin.

As I mentioned in the last post, Bitcoin is called digital gold. Bitcoin and gold have many similar properties, and Bitcoin also has unique advantages. If we want to know the future of Bitcoin, we must know the role of gold in history. Only by learning from history can we better judge the future.

In the past 100 years, gold has been the core of the Bretton Woods system and has played a role in anchoring the world's currency.

After the start of the First World War, international trade was greatly affected. It is difficult for countries to convert currencies into gold, which caused the collapse of the gold standard system. After the start of the First World War, international trade was greatly affected. It is difficult for countries to convert currencies into gold, which caused the collapse of the gold standard system. After the Great Depression of 1929 and World War II, in order to strengthen international cooperation and rebuild the international monetary order, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference, also known as the Bretton Woods Conference. he delegates deliberated during 1–22 July 1944, and signed the Bretton Woods agreement on its final day.

Its core content include:

The U.S. dollar is linked to gold, and the price of gold is set at $35 an ounce. Governments or central banks can exchange U.S. dollars for gold at fixed prices. Governments of various countries need to coordinate with the US government to maintain this price in the international financial market.
The country's currency is pegged to the U.S. dollar. The governments of other countries set the price of their respective currencies to convert to gold to determine the exchange rate with the U.S. dollar.
The exchange rate of various currencies against the US dollar can only fluctuate within 1% of the legal exchange rate. If the market exchange rate exceeds the 1% fluctuation range of the legal exchange rate, governments of all countries are obliged to intervene in the foreign exchange market to maintain the stability of the exchange rate.
The Bretton Woods agreement stipulates that currencies of various countries can be freely exchanged.
The Bretton Woods agreement put the U.S. dollar in the same position as gold and became the most important international reserve currency among foreign exchange reserves.
The member states of the International Monetary Organization shall pay 25% of the payment amount in gold or a currency convertible into gold, and the remaining part shall be paid in their own currency.

The fixed exchange rate system under the Bretton Woods system anchors the prices of currencies in the world by maintaining the US dollar and gold at a fixed exchange price. At this time, governments of various countries cannot print and distribute currencies at will, and must ensure that there is sufficient gold to exchange currencies. Gold functions as an anchor of value.

In the 1950s and 1960s, European countries recovered their economies and began to use their reserves to exchange large amounts of gold from the United States. In the 1960s and 1970s, multiple dollar crises further weakened the credit of the dollar.
Bretton Woods system:https://en.wikipedia.org/wiki/Bretton_Woods_system

The collapse of the Bretton Woods system indicates that gold no longer functions as a currency in human society, but can only be freely traded as a commodity. In the past human history, gold as the most valuable commodity naturally served as currency. But after that, the issuance of human currency has entered an era without any constraints.

In 1972, the signing of the Jamaica Agreement realized the non-monetization of gold through legal forms, which brought the legal tenders of countries around the world into an era of free floating. This means that governments of various countries issue legal tenders, no longer need to use gold as an endorsement, and can issue currencies at will. As the number of legal tenders in various countries continues to grow, global inflation will be inevitable and may eventually lead to the collapse of the world economic system.

This happened frequently in the past ten years. Especially in 2020, due to COVID-19, we have encountered the largest currency over-issuance in the history of human civilization. The property of ordinary people continues to depreciate. The past fifty years have been the most unfair in the history of human currency. Until Satoshi Nakamoto created Bitcoin and gave us hope of solving the problem.

As "digital gold", Bitcoin creates unlimited possibilities for our future. Compared to gold, governments almost cannot control Bitcoin. Bitcoin has the advantage of decentralization, and no institution can modify Bitcoin's data. So Bitcoin can perform the function of "digital gold" well. I believe that Bitcoin may be used as a value anchor to rebuild the "Bretton Woods System" like gold in the future.

In the next ten to twenty years, due to the legal tender, the value of the currency will inevitably depreciate due to over-issue. There may be frequent economic and financial crises before the reconstruction of the world monetary system. At this point, the government will find that if they want their fiat currency to be supported by people, their fiat currency must be anchored to Bitcoin. Ordinary people will only recognize the legal currency that anchors Bitcoin. When more and more fiat currencies rely on pegged bitcoin issuance, a world monetary system centered on bitcoin will be established.

These are my predictions about the development of Bitcoin in the next two decades. Human civilization will inevitably establish a new world monetary system and world financial system centered on Bitcoin. This process may be long and there may be many difficulties and setbacks, but it will definitely be realized in the future.

This is my opinion, what about you?