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by jl2718
1464 days ago
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Dollars do not provide utility. The reason why you need dollars, as you’ve pointed out, is that people with guns might show up at your house if you do not pay them in dollars. Conveniently, you can also get people with guns to force others to pay you in dollars to satisfy a wage, trade, or debt. That’s not really any sort of utility, but utility is not really required for a currency. Bitcoin was never supposed to be like a modern currency. It was an experiment to create something like gold except with the property that it can be easily transmitted and stored by individuals. The theory was that we only had fiat currencies as a proxy for gold because gold lacked these properties, and if it had them, it could be used as a universal kind of cash. I think our understanding of the dollar system was poor back then because it was the first time we questioned it. The term “fiat” that we use so much implies that value rests upon some common belief. This has been exposed as ridiculous by observing any individual or even entire nation that lost faith in their mandated currency and tried using a different system. They were annihilated. It turns out that the system is much more than a popular delusion; it’s a real visceral power structure. Then the Bitcoin value thesis became the common belief that the current system is unsustainable globally across the board, and something has to fill the gap when it fails. This was also challenged in the last boom by actual acceptance and integration with the existing system, so maybe it will be more like a slow mutual transition to something like global reserve status alongside gold, with young male nerds and Indian housewives using it as decoration. Every boom starts with some kind of systemic failure and ends with a crackdown. The next I would guess will have something to do with a major war that essentially backs Bitcoin with physical force to achieve equivalence with others. It’s not something I’d like to see, but it’s the next logical step in these cycles of escalation. |
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Depends on who you think of as "we".
If by "we", you mean "economists", then no. This is elementary economics.
If by "we" you mean "tech bros", then yeah, maybe this was a novelty to them, along with everything else in economics past the first couple of weeks of Econ 101. So the economists watched them fast-forward the last three centuries of economic history in a decade.
It doesn't take a war to back Bitcoin. What it takes is convincing a major government to replace its currency with a blockchain version. Which is what various central banks are doing. Except it won't be Bitcoin. It'll be a "proof of stake" system, where your "stake" is your existing currency, and the central bank holding a majority.
It'll never be Bitcoin-brand crypto because the bitcoin owners don't have the guns you mentioned. They missed the very first lesson on why any currency (not just fiat currency) works. They could have asked the economists, but being tech bros, figured they knew better.