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

This is what I am trying to point out when said only a naive government will place a ban on Bitcoin trading for fiat when they can not control the P2P trading of it into fiat. Instead of ban they should implement KYC and taxes which will increase their benefit through Bitcoin.

Yes, the activity is risky but I believe most Chinese citizens that do this always do it in their neighboring country and example is some years ago when some Chinese went to the Philippines for crypto gambling during the World cup.

The fiat system is failing but bitcoin was always going to get paired/coupled with fiat. It’s how we’ve bought things & lived off for a long time now. It’s natural that it happened but obviously 1BTC = 1BTC and that won’t change. Let’s just be happy that we’re here & we found a way out of their inflationary slavery.

That doesn't seem to be the case, governments won't do it if they feel that bitcoin is still in their favor. But in certain cases they will only limit it with all the rules to keep the user centered. An example is KYC, that's the most obvious one as one of the reasons and the rest they just prohibit users from using bitcoin as a legal tender.

It was a risky activity for them but certainly could be done secretly. I don't think many people will be willing to do it once the government imposes a ban, but it can.

If it wasn't for fiat then it would have been something else but there would have definitely been something or the other which bitcoin would have been paired to.
So in the mean time bitcoin was created fiat was already used as a wide means of payment mechanism.
Instead of pairing bitcoin with any other asset or good it would have been more convenient to pair it with fiat itself.
It would avoid the hassle involved to trade it with a physical good or asset.

From my own understanding, is any government planning to outright ban to the purchase of BTC with fiat currency will be someone who's totally naive about the concept of Bitcoin and understands that it's here to stay.
An example is the Chinese government despite all the restrictions and bans placed on Bitcoin by their government, people from there still find a way to buy and invest in Bitcoin.

I agree with your assumption that bitcoin is an alternative means of payment for us and anyone willing to adopt it. Bitcoin is not to replace it but bitcoin provides a good choice for anyone who realizes that this one payment system has something more reliable than fiat.

However, fiat will survive and continue to be used as the main means of payment regardless of whether we have bitcoin or other cryptocurrencies as alternatives. I wouldn't imagine bitcoin will replace fiat anytime soon, but it's possible that the use case of bitcoin as a means of payment will increase even further in the future.

what you need to ask yourself.
bitcoins "coupling" is not about coupled to fiat generally..
the actual coupling grief is the DOLLAR attachment(out of all possible fiats, why DOLLAR?!)

dollar is only used by 330m people. yet other countries like india and china have a billion + each people using their respective currencies

so why have DOLLAR as the coupling

then.. note this while thinking about 'coupling'

bitcoin CAN work without being DOLLAR coupled. heck it can work by being coupled to a non fiat measure.. such as "min wage hours" which would be a more fair coupling for all citizens of the world while disrupting wallstreet/forex
where by the price changes in measures of seconds/hours... which then later EASILY converts to their local fiat rate of their local fiat min wage number.
rather then measured in dollars/cents and then converted to their local fiat rate

anyways..
fiat will never disappear. governments will always exist and taxes to pay for social/public services will continue and governments will always want control or their value in their nation separate from another.

i know the euro has shown a sign of change where by the french government is not using the franc. but instead using a subset/ section of reserve of euro. where some think that can expand to a "one world currency"
..but there will always be rival countries that dont want to be puppets to a master single currency and also it reduces trade options if everyone were to use the same thing. as there is less swap opportunities for rivals to fight over.
forex is a business in of itself.

having bitcoin as a "one world currency" where by all countries only ever use bitcoin.. defeats the point of bitcoin.
bitcoin is a free option to hedge against fiat. its not meant to replace it. its meant as an escape door option away from fiat. if there is no other currency. there is no escape meaning bitcoin becomes as corrupt as fiat if people cant escape from it

This is telling us that Bitcoin cannot do without Fiat currency but can Fiat currency can do without Bitcoin because from the beginning before you get Bitcoin you must to have flat to exchange the Bitcoin that is why I do disagree with people who says that bitcoin will take over Fiat currency in some trend I've seen so far so with combination work between Fiat and the Bitcoin they will know that the element that brings Bitcoin to be known and to be recognise is true Fiat currency and without that it can't cannot  fully

Initially when Bitcoin was released, the developers’ motive of inventing bitcoin was not to replace fiat currencies, but to introduce a safe and faster network of transaction of money without rates of central bank. However, as the years progressed, bitcoin was seen by holders as a means to escape the fiat currency controlled by the Central authorities. This is when people started developing the idea that coupling of bitcoin was a big mistake. Personally, I do not think it was a mistake. The developers did what their goal was, which was clearly not to replace fiat currency. 

In the present date, it will need an official declaration of the developers of bitcoin to decouple it from fiat currency. This will result in an unimaginable crash of BTC market cap and value, as till date all of it was dependent on fiat currency.

One main problem when trying to stop bitcoin to fiat conversion is that bitcoin is decentralized and popular all over the world. You can never stop people form trading bitcoin with fiat, since form the beginning bitcoin was made to be decentralized and uncontrollable. The value of bitcoin also is not determined by fiat conversion rate, but by the work that is done by the miners. Later this work will result in a fiat conversion rate.

What you say is correct, but think of bitcoin being valued. Each Satoshi equals certain amount of USD in value or valued against some other fiat currency. Everyone can't mine, and when buying we're in need of using the fiat value. Right now is it possible to value bitcoin without USD. If so, bitcoin could've got even more usage and growth.

It wasn't because how can they be able measure the value of bitcoin? And the reason why btc value rose is because someone buys it using their fiat. The reason why bitcoin is created is for us to have an alternative to the existing currencies and not because it was a replacement to all of them so it's fine if btc can work together with other payment methods.

It is still possible to obtain a bitcoin without using a fiat. You can mine it, get in faucets, or work for someone else and prefer btc as payment. You can also spend your bitcoin directly on almost anything so there is no need for you to sell your btc for fiat if you are allergic to it.

This is not going to happen at the moment, unless we get rid of the fiat mentality or all governments in the world accept bitcoin as a global form of payment, people are giving fiat value, we need to change this.
The problem is not the dollar in particular. The problem is the problem of the banking system that gave the dollar a value when it is actually a worthless piece of paper. In the old days, people exchanged food or work for gold. There was no such thing as “fiat” or paper money.
I think in the future we will return to a system like this where people pay bitcoins for goods or for work. But replacing any old system with a new one takes patience and a lot of time.

Irrespective of the differences people try to put up between fiat and Bitcoin, it is very necessary that we acknowledge the fact that fiat is in one or the other the back bone of Bitcoin in terms of the value associated with it. Just as a you said here, how would you know how much you’re buying 1 BTC for? If the coupling was not in place. So, in conclusion, there’s no mistake whatsoever about that cordial relationship between the two.

Bitcoin is relevant due to fiat currency and is always referred to in the terms of fiat currency. Though I am not sure whether bitcoin will replace fiat, I hope that oneday bitcoin is used parallel to the fiat currency.

I think fiat will decouple itself sooner or later from Bitcoin. Just like Blockbuster went out of business from one day to the other as it became clearer and clearer that streaming movies was the future. Redundancy makes itself known early on. But people do tend to hang on to old technology out of habit and nostalgia, if nothing else. Same goes for fiat. Its a redundant old version of money and is currently being replaced. But seeing as the entire world needs to participate in this change, it might take longer for people to see the bigger picture of blockchain technology and especially Bitcoin.

What is your opinion of this happening, I don't think it will happen even if it takes hundreds of years. Our daily lives still require fiat even though it has its downsides and cannot be compared with bitcoin. I wouldn't be able to use bitcoin for a quick breakfast or takeaway coffee because of bitcoin's transaction costs and confirmation time. It would make me miss the express train to the office, but with fiat it would be more convenient in this situation.

I don’t think it was mistake at all. Otherwise how would I known how much I am buying or whats the value for the same. 
Being common user of bitcoin i don’t think much about these short problems. In fact this monetary system is just perfect because it tells you how much bitcoin costs in every currency available out there. Everyone love to see its price in their own currency obviously for ease of user.

but the big picture question is.. why do we.. outside the fiat system choose to re-enforce the fantasy that the US dollar should remain the reserve currency

dollar is american. used by 320m population.. yet other countries with higher population use other currencies..
meaning other currencies are MORE POPULAR.. yet we are deceived and told the US dollar is the popular one

EG the chinese Yuan is use by over 1.3billion people meaning 3-4x more popular currency

also by measuring against the dollar where everything is then priced in images of americanised costs.. we then start pandering to the elitism that bitcoin transaction fee's are justifiable because we are then measuring them against a price of a bigmac/coffee (affordable in "AMERICA") but totally ignoring the BILLIONS of people elsewhere that see the fee as being HOURS of min wage labour
even things like the ASIC costs get measured in btc that then compare to US living costs. where an ASIC is sold at a reasonable 6 month min wage salary(in america).. where as for BILLIONS of people its their whole working life career cost to buy just 1 asic

seems too many want to pander and not cause disruption and just re-enforce the mindset that the US fiat is the world reserve. rather than trying to disrupt it by messing with wall street fiat rates to kill off the US from its top place compared to other countries native rates on forex/world bank rankings

The price manipulation from the governments side is a huge force in the inflation of fiat. A big mac may be worth some amount of money but that price will rise the more the government prints money, making the money already in circulation more worthless. And history shows us that deflation is not in the books when it comes to fiat and the government that controls it. Why? Because it is not profitable. Slowly extorting money out of the people, thats profitable. And if you do it slowly enough nobody asks questions. Of course supply and demand play a huge role even if fiat did not exist, but if we replaced fiat with Bitcoin, that artificial price increase of the Bigmac would not happen.

Im just hoping fiat gets replaced by Bitcoin sooner than later.

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.

---

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.

Do humans have another way to make the transition? The dominating currencies are fiat. A merchant who's supporting bitcoin by pricing their goods to it, has to somehow come to an agreement with the client. If both the client and the merchant get paid, buy goods, pay taxes, other dues etc, using fiat, they're reasonably going to use it as a measure.

Note that some online stores do price goods in bitcoin, regardless of the exchange rate. (e.g., lightning.store)

alot of people thing that the btc:usd. is the only way bitcoin can work..
but thats just americans narrow mindset not understanding anything outside of USD

there are 7.5billion people that DO NOT use the USD. and so when they see btc:usd, they are personally then having to convert it into something they understand because USD is meaningless metric to them.

too many countries seeing their conversion then makes them see its out of their reach

over 1 billion people in africa converting a tx fee into usd and then to african native currency end up seeing the fee as being many hours of their minimum wage labour
when converting the BTC value of buying an asic to usd and then converting to native currency, again. out of reach its like 37 YEARS min wage salary to buy 1 asic in africa

however if we take away the americanised presence of btc and stole playing to the whims of america then people can see better utility

people (devs) foolishly think the bitcoin tx fee's are fine because its only 6 minutes of american min wage labour, they dont see that its 3 hours of min wage labour for africans or 20 minutes min labour for china or 3 hours for some people in india

they want americans to think bitcoin is fine and have the half of the planet on poverty line to use other networks saying it wont "cope" for them and pass them off with another network

we see it everyday now how some dont want small amounts spent on bitcoin. EG an american coffee amount bit no no for bitcoin. but that american coffee is a weeks groceries amount for billion of people..
yet some think bitcoin is fine for americans to use for their weekly grocery shop amount..

seem fair? nah.. but oh well
(i personally am wealthy and in a developed country(UK) where prices are similar to US.. but i can atleast understand how the unbanked/poor, unprivileged get treated/feel due to the disparages of the forex market and the elitism of american mindsets)

1 BTC = 1 BTC  looks good theoretically but not practical at this moment. I don't know what will happen in the next 20 years, but for now, it is not really practical. At the backdrop of the current economic situation, what else can you do without coupling bitcoin with fiat? There's no alternatives available to determine the value of bitcoin.

If today I say, 1 gm gold = 1 gm gold, it would not make any sense! Same with bitcoin! It's no mistake, it's the correct thing to do to determine valuation.

This is to be expected since fiat is still the common unit of account for every good on earth. This can change, but before this Bitcoin needs to be an estabilished store of value and medium of exchange. Its just the natural evolution of money. Its only a practical unit of account when the world adopted it. We gotta be patient here.

Nope, its the process every good that wanna become money has to go trough. Most people wouldnt even have the chance to acquire Bitcoin otherwise, leading to no significant adoption. Theres also no practical benefit to account in Bitcoin right from the beginning, when only a tiny minority does it, so patience, this will change with adoption.

They cant really ban it, they can prevent services to build around Bitcoin, but thats it. It would have probably slowed things down. All the bad these exchanges are doing is also a reason for more people to improve their security practices and a real world example of what centralization leads to. Its like an immune system that adapts, it becomes stronger if you challenge it regularly, so nah i dont think it wouldve been better.

We have this fiat-decoupled version already, because it never existed in the first place. The common money is still fiat so it doesnt have any advantage to not be able to get Bitcoin with it. Its about what people are accepting in exchange for Bitcoin voluntarily, this is always a individual choice, not a set rule. There would always be people accepting fiat in exchange for Bitcoin,so there will always be a market to exchange fiat and Bitcoin, this happened naturally and couldnt have been differently. In the future people can just use satoshis instead of fiat to price things, there wouldnt be much difference to how it works now.

We still live in that broken system, Bitcoin is designed in a way to use the weaknesses this system has, to its own advantages. Let the dumps happen, we will beat them at their own game, thats the only way. If we wanna beat them, theres really no way around the pain we have to go trough now.

Most people more convenient to coupling Bitcoin price to fiat since fiat price is stable, even though it always inflate. At least fiat price doesn't change 10% in a day, the price is slowly decreased without anyone noticing it after a year or few years. If fiat price isn't stable, many people will panic and think the price is controlled by the government, they can do anything to control the price.

Coupling Bitcoin to fiat isn't a mistake, but we're not ready to see any price in Bitcoin due to high volatility.

The idea here is good, but fiat plays a vital role in the business chain. The vendor accepts bitcoin, maybe a wholesaler, but the producer may not be a bitcoin trader. It brings forth a barrier to the business chain of such a vendor. The government will have no such power. However, they are always a means to cut side into other people's businesses, and the government is a part of such practice. Consider other valuable assets like gold, silver, and other country currencies being changed to fiat in different countries to ease the circulation of money. The peer2peer bitcoin traders that change bitcoin to fiat for-profits can't be erased from the market. I don't think such an idea will happen soon, as many people are involved in the market, including the same government you dodge.

It is probably helping BTC. Change is difficult. Large changes are even more difficult.
If you had to remove all ideas of fiat to BTC people would be giving much more resistance to using it.
Now they have a reference point that they have had since they understood what money is.

-Dave

But how would we able to get it otherwise ?

Humanity always prices everything, even things that shouldn't be sold/bought...

1BTC = 2000 min wage labour hours (no matter the countries fiat value)
imagine the effect that would have on arbitraging forex wallstreet taking the bitcoin path of opportunity to disrupt the forex rates to arbitrage cycle for profits

Bitcoin price is first and foremost measured in fiat, mainly the dollar. 

Bitcoin is bought and sold with fiat since the beginning. Was that a tragic misstep in the evolution of Bitcoin? Would we have it better if all governments outright banned the purchase/sale of BTC with fiat?

If we had a fiat-decoupled version of Bitcoin which could be traded for services and goods without a third party currency, how would that look? Obviously the government would have no power over people accepting BTC for their goods and services (other than intimidating people with punishments, if caught).

From my observations, the more the regulators go against Bitcoin, the more it evolves into what seems to be a liberated global currency. By my thinking, the rebellious nature of the Bitcoin community against the old, corrupt generation of money and its corrupt services (like banks) is what drives the evolution of Bitcoin. So why not let that nature loose?

In such a reality, I think the purchasing power of Bitcoin would see the same rise in value from its inevitable adoption but without the dumps caused by the broken fiat economy and stock market crashes.

1 BTC = 1 BTC