Topic: Was the coupling of Bitcoin to fiat a mistake? - page 2. (Read 614 times)

I don't see it as a problem because to me it's just a reference point. The value of dollar is commonly known because it's basically acting like the world's reserve currency. So, for instance, the value of local fiat in various countries, including mine, is often measured against USD because it's presumed to be stable enough for this purpose. Now, lately, the USD is not as stable as it used to be, which creates an issue. $100 in July of 2022 is not the same as $100 a year ago, not in terms of purchasing power. So when measuring Bitcoin in dollar, we forget to account for that. But given BTC's very high volatility and usage all over the world, we need some sort of estimate that would help understand what you can buy for 1 BTC today, what you could buy 2 years ago, and what you could buy a month ago. It would be very inconvenient, at this level of volatility, to rely solely on BTC and get used to extreme price changes over short periods of time.

The price of bitcoin is measured in fiat and there are simply no other more convenient options. Cryptocurrency can be measured in any way - in gold, in any commodity, for example, horses. Imagine, we would say that one bitcoin is valued, for example, at 56 horses, or 1200 chickens. Would that be convenient? Of course not. We would still evaluate in that dimension what would be convenient for us and what the whole world uses. So don't reinvent the wheel.

nothing stops them
tax is normally a % based thing. so its easy to convert at any measure

if we measured fairly for the world btc as 1btc=2000minwage hours.. where 0.1=200hours*
then a government with a 10% income tax would be 20 hours.. so you simply look at the min wage fiat rate of min wage and work out the 20 hours and pay that in fiat

*not suggesting fix bitcoin market to 2000 hours forever im saying instead of $ and cent which change per order. im saying seconds, minutes and hours that change per order

1 Bitcoin is 1 Bitcoin but having 1 Bitcoin in 2010 has nothing to do with having 1 Bitcoin today. Let's see if we put things in perspective. That tautology strikes me more as a wishful thinking mantra rather than a description of reality.


As much as the community would not want to make an equalization between Bitcoin and fiat currencies, nothing would stop the government from doing so. Imagine you sell something worth 0.1 Bitcoin. To tax you the government would do the fiat equivalence, currently about $2k.

english is only spoken by a few hundred million
there are other languages spoken by BILLIONS

dollar is only used by a few hundred million
there are other currencies used by BILLIONS

english/dollar is only treated as universal  by those within the few hundred millions that think THEY are the elite speaking on behalf of the world..
.. meanwhile the rest of the world are still wondering "what makes them think they are so special"

once you manage to get on a plane and see different cultures outside of the elitist box and have conversations with people outside the elite minority and speak to the common majority. you get a different prospective.

try it

P.S.. im british english and even i sometimes mistakenly get pulled into conversations of speaking in dollar format(instead of pounds) but i do wake up a few times and also see the prospective of those outside of the dollar mindset. .. yes i admit i have coupled myself many times into the dollarisation of bitcoin when talking about it instead of sticking to my native tongue of pounds.. but wouldnt it be great if bitcoin just never was dollarized. and instead measured against something else like labour hours which is more fair measure for ALL countries

The critical thing about things like these is understanding the part where you need to stay away from fiat and conserve the value of your money. It's like Robert Kiyosaki is saying that "saving money" would make your money less valuable instead of investing it with the right assets, and Bitcoin can be that help. However, you still should accept the volatility of it its price movements.

It's better to understand that first before anything else.

I am also follower of 1 BTC equals 1 BTC but the thing is you have to have measuring unit so that you can value something correctly. The dollar was standard in similar fashion english is universal language which "everyone understands". I think that's the simplest explanation on why we need bitcoin coupling with fiat. Same thing with gold, silver, oil, or basically any asset that is precious out there has value and is to be measured in the dollar to understand it on public common forum.

If we want to keep 1 BTC to 1 BTC then we will have to upgrade the prices of everything from dollar to bitcoins which seems to be impossible even after hundreds of years. So for the sake of simplicity we value it in dollars and its going well so far.

We need to find another stable asset to measure bitcoin's value if we do not couple bitcoin with fiat. With bitcoin's high volatility, the use of fiat to determine value at a time for exchange, I don't see anything serious here. Bitcoin and Fiat is just a combination to measure the value of an asset, it doesn't take away the real value of bitcoin so there is no problem.
Fiat is the measure of the value of everything in the world, and I don't think it will be broken or superseded any time soon.

Seeing that Bitcoin is future of money and it is here now, I don't really believe it could be any other way and it goes both ways- ex, how much fiat is my bitcoin worth or how much bitcoin can I buy with my fiat.  From here 'value' is established and the rest follows, i.e., barter, trade, commodities, etc.

Ok, let's measure Bitcoin's value in Big Macs. You would still find that yesterday it was 1,000 Big Macs and today it's 700 Big Macs, and tomorrow it's 1100 Big Macs. Bitcoin doesn't crash because people choose to look at its price in USD or any other fiat currency, it crashes because it is a risky, unstable asset with a purely speculative value.

If all governments banned Bitcoin, it would only be a currency for darknet markets, so in some sense it would be closer to the cryptoanarchist utopia, but it would also mean zero chance of mass adoption.

without the Fiat currency Bitcoin won't have been relevant, so therefore you can different cryptocurrency especially bitcoin with fiat currency with little thing. That is while when some people give reference of bitcoin that it will dominate the existence of Fiat currency it always astonished me seriously. Even it's very clear that Bitcoin government on their own Way hate the existence of bitcoin so therefore their are restricting purchasing of bitcoin to eliminate it's adoption in nationwide.

its not about the fiat changing to peso or some other currency if US banned it..


its that all exchanges follow one fiat currency.. and just deciding to change it to peso.. changes nothing..

by having bitcoin follow one currency and then after the fact have other currency just sheep convert to native currency changes nothing compared to how things are now..

you can spot this because if exchanges in mexico were actually measured in true peso. you would see their market rate DIFFER from dollar markets because the 'community' playing on the different markets have different sentiments and times they trade, meaning each countries orderbook on exchange would have DIFFERENT squiggly lines

EG  a UK market volume and amount of trade would quieten down at like 8pm uk time when everyone is going to bed or relaxing for the evening. where as new york its 3pm or 2pm in mexico at that exact same moment. so their volume and trade decisions are still active due to day time trading. so the exchanges should have different levels and different trade patterns if truly separate markets. yet they are not

instead the markets actually sheep follow each other too well. too coincidentally. which shows they all follow the US markets and react to the US market.

its the things like the sentiment that bitcoin fee's are fine and less then a coffee, due to the ignorance that the mind set of "less than a coffee" is an american scripted speech and not actually thinking about the cost in africa/india

by putting a fiat price on the market. creates bad judgement. bias judgement
however if the price was represented by something else that can easily convert to a native countries other measures, then that can be different.

which brings up the idea of measuring it in the form of min wage labour hours.

..
by measuring in dollars then makes other countries beholden/slaves to the FOREX rate..
however if bitcoin was measured in min wage hours. then bitcoin can disrupt the FOREX wall street.

using min wage labour hours grows a measure that is fair to all humans around the planet treating everyones labour and time equally. whereby they can use that equal opportunity to truly screw with forex for arbitrage opportunities of profit

but i guess thats just a too complicated idea for people to get their minds around

It's not abnormal for currencies to be coupled to each other though - there's a lot of examples I can think of that seem to follow proportionally (like the Swiss Franc, the pound sterling and the euro all follow similar trajectories based on each other). It's the whole reason most Western fiat countries have some level of coupling and are considered less volatile because of it.

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Bitcoin decouples from the dollar, stocks and other currencies a lot and I think if you compared it on a longer timeframe it becomes obvious which one is growing in value against the other.

Fiat is the major onramp for crypto because its one of the easiest ways to trade and has the highest market liquidity.

Had you banned fiat exchanges, you'd have people doing it for various goods, deeds, IOUs. You'd have a debt trading market, marketplaces and so on, so people would still be trading, even if only on paper, but you'd be lacking a good measure of price. All physical things in this world, even space trips, human organs, sex, have value in fiat. You can't decouple it. If the US bans fiat trades you'll be bale to trade it for pesos or some other currency.

Well, it needs to be purchased with something. Think how hard would have been for Bitcoin to get adopted if people were not able to purchase it using fiat. In that case Bitcoin could have only propagated through the old barter. If Bitcoin would have been banned from the beginning I'm sure its growth would have been much slower.

I mean just think about the amount of free publicity Bitcoin got because of the valuations it reached. If Bitcoin would have been banned right from its nascent phase it would have been mainly used in underground activities. I mean I don't know many average joes that would get involved in forbidden transactions. Maybe 1 in 10. It's simple math.

Yea I worked out my wage and it pretty much computes to what franky1 is saying.

My own take is that i'm not zure Bitcoins price is coupled to the US$ its just what the
majority quote the price as. I am in Europe and I never quote the Bitcoin price on here
in €'s but if I want to buy Bitcoin or need to sell some I refer to it in €'s.

Coinmarketcap has to option to change what currency you want to compare Bitcoin to.

on another note, a lot of people have yet to realise that if they have Bitcoin in a wallet, it doesnt
fluctuate up or down, its the FIAT value which so many focus on which does.

1 BTC = 1 BTC always

Anything has value, if we can buy something with it. Bitcoin can have value if we can buy something directly from it. Sadly initially there was no such means to do this and bitcoin was coupled with fiat currency. But now slowly many organizations have started to accept bitcoin and we will see that now bitcoin no longer will need coupling with fiat in future. As bitcoin is the future.

its not a question about getting rid of "a price".. its a question of why does the price need to be dollar presented


just imagine if instead of forcing chinese, indian, african to measure btc against dollar.. the whole world seen btc at a moving 'price' based on seconds, minutes, hours of minimum wage.

where they all can compare it to their native costs. where by everyone can buy bitcoin for the same fair amount of time they work at min wage labour value.

it then becomes easier for each countries to then easily compare the value to their local costs.
and all have a fair access to bitcoin..

the negatives are then removed from peoples access to bitcoin due to foolishly high costs to africans but cheap costs to americans. because they would both be on par, the negatives then move to the disruption of forex where people arbitrage and disrupt the FOREX rate to make their profits by cycling between bitcoin->USD->native->bitcoin repeatedly unto a 1USD becomes the same number of minutes as a african native fiat minutes

EG

2000 hours is US $20k (states with $10 min wage)
2000 hours is indian 40,000rupees (20 rupees min wage/hour in Bihar (160 rupees a DAY(8 hours))

meaning an indian and american pay 2000 hours for bitcoin.. which would be fair.
..
however if you use the old outdated FOREX to express bitcoin in just USD
it converts that BTC is 1,584,173 rupees which is a 39X difference(39.6x more labour for an indian)

..
so just imagine if it was all expressed in hours..
where an indian can but it for 40,000rupee's sell it to an american for $20k use the $20k on forex to buy 1584173rupee, and then buy 39.6btc.. rinse and repeat

so just imagine if it was all expressed in hours..
where an american uses their $20k on forex to buy 1584173rupee, and then buy 39.6btc.. sell the btc to an american friend/exchange to get $792,086.5 and rinse and repeat

net result is that the USD forex price crashes and the indian rupee price rises until they find equilibrium where on the forex rate 1 indian min wage hour is the same forex rate as 1 american min wage hour.

meanwhile everyone around the world is benefiting. and only the wallstreet forex is getting disrupted and losing out

The coupling is also creating the major headlines during a bull market so it also helped in the adoption of Bitcoin.

Without this a lot less people would care...

This is not possible, everything has a price and that means everything, the concept of money is in fact similar to the units of reference we use to measure stuff, so in the same way we have inches or gallons in one system and centimeters and liters on another we use dollars, euros and bitcoin to measure not only the value of stuff but the value of those units of reference among themselves, as such it is impossible for bitcoin to not have a price itself unless all the other currencies were eliminated, which we know is not possible.