I've only recently begun understanding Bitcoins and decided to ask my Economics professor about the viability of decentralized digital currency.
She responded by saying that it will not be sustained just as the Gold standard was replaced by the Dollar (in the US).
The Dollar is also backed by the Fed. and our confidence in it.
What are some future speculations? When it hits the cap, will BTC be replaced by a inflatable currency?
She responded by saying that it will not be sustained just as the Gold standard was replaced by the Dollar (in the US).
The Dollar is also backed by the Fed. and our confidence in it.
What are some future speculations? When it hits the cap, will BTC be replaced by a inflatable currency?
She failed to mention the gun that's used to "promote" the replacement of the gold standard with the dollar. And that the trust in the fed is actually fear of it's guns.
And to answer your question you have to understand first why even today gold is money to many people but they aren't using it as money and what sort of properties of gold handicap it in that regard. The answer to why is of course the government guns enforcing the legal tender laws and capital gains taxes on precious metals. Of course gold is physical element which can be seized much easier then Bitcoin. Also it's much harder to hide it and trade it especially at long distances. There's all these barriers set up by the government guns that gold has a really big problem overcoming even if the market wanted to use it as money where Bitcoin could potentially have a much easier job.
So if anything we are either going to move towards Bitcoins as money or we wont. But no one can know for sure what the markets and governments response will be to it and what will ultimately happen. I guarantee you this though: If BTC is replaced with an inflatable currency it wont be a voluntary market action but a forced government one. I'm 100% sure about that seeing as inflation is theft!
