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0 sats \ 3 replies \ @cryptocoin 14 May 2022 \ parent \ on: I have written an article on medium for Bitcoin failing as a money, let me know how wrong I am! bitcoin
You can still have dollar denominated (or some other unit that has purchasing power stability) but use bitcoin as the payment method.
Especially true for remittances, cross-border payments, etc.
And there are many things you are overlooking.
Consider why Emirates just announced they are going to accept bitcoin for payment. Why? Probably a number of reasons, but not the least of which is that they are paying several percent of revenues to the merchant payment processor. They may even have ambition to add bitcoin to their corporate treasury -- so this provides a flow of bitcoin in which they have access to at zero additional cost (versus buying through a broker or OTC).
And then there's the P2P angle I think you are missing. Lightning address makes bitcoin the simplest payment method that exists. If I want to send some funds to you, all I need to know is your Lightning address. You will see a notification that you received some sats (for an amount under one U.S. penny). I paid that from my LN-enabled wallet outside of SN. You can withdraw from SN to any Lighting Address too. Now imagine your e-mail provider adds an LN wallet, or social media like Twitter adds it, ... whatever. You think I'm going to ask you for your PayPal address to send you fiat? No, .. LN is the greatest payment rail, international or domestic, to exist.
And that's just a tiny fraction of the things you aren't considering.
Bitcoin's footprint is expanding. That may accelerate. Volatility be damned.
I am quite into the LN ecosystem, I stack sats with SmileS, zebedees, streaming sats to podcasters etc.
I agree that bitcoin greatest strength, is its payment network. I believe it is simply the most secure and open.
But as for its potential to be good, sound money, this I am not very convinced. I am especially concern if adoption leads to even more volatility with all different financial tools used related to it.
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Since the currency stock inflation is now under 2%, further adoption will, by definition, see the bitcoin exchange rate volatility continue.
The Bitcoin protocol doesn't get changes to protect "different financial tools". So these tools will need to be designed to be compatible with exchange rate volatility.
Fiat is not compatible with bitcoin adoption. Not just for the reasons you are probably thinking either. How many people who are spending bitcoin are reporting gains when spending? How many people who are earning KYC-free bitcoin (e.g., gains on speculation, interest income, and freelancers) are reporting that income? Right now that's roughly equivalent to a rounding error of gov't revenues. But what happens when that becomes more common? Bitcoin isn't changing. That means fiat will change.
Eventually, after hyperbitcoinisation has completed, then bitcoin's purchasing power volatility will pretty much track productivity growth in the economy, and thus be much less volatile.
reply
Since the currency stock inflation is now under 2%, further adoption will, by definition, see the bitcoin exchange rate volatility continue.
The Bitcoin protocol doesn't get changes to protect "different financial tools". So these tools will need to be designed to be compatible with exchange rate volatility.
Fiat is not compatible with bitcoin adoption. Not just for the reasons you are probably thinking either. How many people who are spending bitcoin are reporting gains when spending? How many people who are earning bitcoin (e.g., freelancers) are reporting that income? Right now that's roughly equivalent to a rounding error of gov't revenues. But what happens when that becomes more common? Bitcoin isn't changing. That means fiat will change.
Eventually, after hyperbitcoinisation has completed, then bitcoin's purchasing power volatility will pretty much track productivity growth in the economy, and thus be much less volatile.
reply