Topic: Why I think Bitcoin will not become an national currency - page 3. (Read 6859 times)

Fair enough. I was meaning to reply to:


Even when bitcoin is a national currency in the sense that you describe it won't be tied to that nation and more than it is tied to me because I use it.

What did distribution look like 1, 2, and 3 years ago? Where is it clearly heading?

In practice, nations maintain national currencies primarily so that they can inflate their debts away, and secondarily so that their bankers can "tweak" the money supply to suit their imagined needs.

They rarely give up that power willingly.  A bunch of nations did that not too long ago because they were convinced that switching to the Euro would have benefits in excess of the price they were paying.  Their project does not appear to be working out the way they hoped it would.

Eventually though, bitcoin, or something very much like bitcoin, will rise up.  People will use bitcoin despite the special legal protections that governments grant to their own currencies, and governments will lose their powers of inflation and meddling, either by choice, or by starvation.

If I were a betting man, I'd bet that bitcoin (or something) will become the world's currency before it becomes any government's currency.  It is a very interesting time to be alive.

Being a national currency does not mean that the currency belongs to a nation.  It just means that this nation officially uses this currency.

Same as the english language is the official language in Great-Britain, and yet english is not only used by british people.

When countries start using it out of necessity of foresight it still won't be a national currency, just like it isn't a drug or gambling or sock currency.

I'm not sure why anybody in the bitcoin community would be upset at one or more nations choosing to adopt bitcoin as a national currency?

I really dont think the community as a whole wants it to be tied to any one nation.

Thats like saying in 2010 that Bitcoin is not going to work since a quarter of the coins are owned by Satoshi and the dozen of users on the crypto mailing list.

Even if Bitcoin did not make it as a national currency. IMO it will be a huge success as a payment system. I don't really see any indicator of it failing, ever. 

Just don't take so serious about money\currency\gold, these things are just for exchange. What is real fortune real property is the natural resource & the real estate. Just make profit when doing exchange between these currencies or buy some real thing you need.

Well, anarchy is not always fun, to say the least.

Given the way governments operate, it could hardly be worse.

Agreed.

Bitcoin might very well bring anarchy to the world.  For better of worse.

Regarding OP:

About 1% of the population has a huge portion of all the government cash in the world. Does that stop you from accepting EUR/USD/Whatever for your salary, or as change at the supermarket, or using it to buy groceries in the first place? Most people don't care who owns how much of what money. They only care how much they themselves own, and how much they can buy with it.

0.0001 bitcoin means 1 bitcoin divided by 10,000.  I don't care how much you devalue the dollar, you can't have 0.0001 bitcoin be worth $13.5 and also have 1 bitcoin worth more than $135,000.  The ONLY way you can have 1 bitcoin worth more than $1 billion is if 0.0001 bitcoin is worth more than $100,000.  I'm not saying that 1 bitcoin can't be worth $1 billion.  I'm just saying that if it is, then 0.0001 bitcoin can't be worth $13.5.

Any prediction on the long term value of 1 bitcoin is pure guessing.  It could be worth more, it could fail and collapse and not be worth anything.  I'm not saying that a prediction of $1 billion per bitcoin is not plausible, I'm just saying that it is impossible to have 1 bitcoin be worth $1 billion if 0.0001 bitcoin is worth $13.5.

My problem with Lethn's post wasn't with his optimism.  It was with his math.

Fair enough, DeathAndTaxes, you probably owned me there just a bit. I was thinking more along the lines of, let's say I run a successful widget shop selling widgets for 1 BTM each. If the exchange rate rises from $5 per BTM to $6, in such a bitcoin-rich economy I won't necessarily automatically be lowering the sale price to 0,83334 BTM, which is what happens today because most bitcoin merchants link their prices to fiat (often US$). In such a market I might be able to sell my BTM widgets for a BTM, regardless of the exchange rate, just like a coffee shop in Dullsville USA might sell you a cappuccino for $3 regardless of whether one dollar is worth 70 yen or 150 yen, or perhaps more aptly 1/500 ozt Au or 1/2000 ozt Au.

For big-ticket items, yes, I can see how a form of arbitrage would kick in in the event of dramatic exchange rate adjustments.

That is a silly concept.  Of course $5K vs $10K will matter just as much as $5 vs $10.  Other currencies is something you can buy with BTC.  Even if most trade is in BTC directly traded for goods and services it won't change the fact that prices will adjust to a change in the exchange rate.

Hypothetical example.  Say BTC exchange rate is $5K USD = 1 BTC.  You find a car dealership which sells cars in BTC.  You find a nice car you like and the dealer offers it to you for 10 BTC.  You shop around dollar based dealershps and find this is a relatively good dea  (most other USD based dealerships are selling same car for ~$50,000).  Fast forward 5 years and you decide to upgrade to a new XYZ model which most dealerships have for ~$70,000.  You go to your friendly BTC dealership and he wants 10 BTC.  But wait you could SELL the 10 BTC for $100,000 even with exchange fees, buy the car at a USD dealership and pocket the other $29K+.

As long as product xyz is offered in both USD & BTC the prices will fluctuate based on the exchange rate.  Otherwise one side or the other is getting a bad deal and the side getting the bad deal can simply opt to sell/buy on the exchange and trade in the more favorable currency.

Now with a price of $5K we are talking a coin supply worth ~$100B and thus it is likely the deep liquidity will make volatility much less.  Merchants may not have to adjust their prices very often because the daily exchange rate might only vary by say 0.2% or less.  Still a rise (over weeks, months, or even decades) from $5K to $10K will require adjusting prices it is illogical to think consumers would opt to (as an example) get a $70,000 car for 10BTC vs selling the coins and getting the same car for 7 BTC.

Some of us probably share Lethn's optimism, but cautiously. Somebody did some kind of basic pro-rata analysis and concluded that, on such a pro-rata basis, a global bitcoin-trading economy roughly the size of Salt Lake City (!) could justify an exchange rate of several thousand dollars per BTC. So the idea is not pie in sky but it would be a question of:

- Will Bitcoin mature sufficiently and gain enough respect as a secure, mature technology to scale to this price? Will the network/blockchain cope with the volume of transactions?
- How long will this expansion process take?
- How important is the difference between a justified exchange rate of >$1k/BTC and an actual spot/daily price on a major exchange, e.g. Mt Gox?

As I see it, should Bitcoin mature enough for the price per BTC to scale to thousands of dollars (or several dollars per BTM), it won't matter that much whether the price is $5k or $10k, because the Bitcoin economy won't price link most things to dollars the way it seems to today. So the difference between a $5k and a $10k bitcoin seems less significant than the difference between a $5 and $10 bitcoin, IMHO.

I suck at maths so I'll happily leave it you guys to figure it out lol

A more plausible prediction is that 1 bitcoin could be worth about $1 million in an optimistic scenario in which Bitcoin becomes a universal global currency.