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31 sats \ 2 replies \ @arrowdrive 7 May 2022 \ on: Shortcomings of the Lightning Network bitcoin
All very good points but I wouldn’t say not having a way to “stabilize” a BTC balance is a shortcoming. Bitcoin is stable, it’s fiat that’s unstable. People need to stop thinking in fiat terms.
Yeah, this is nuanced and for example people in US don't really have reasons to want it/need it. Also when everyone is on Bitcoin, then this won't be needed at all.
The main two cases I have in mind:
- Someone operating business on low margins with a lot of money on the line. Volatility is the biggest enemy in this case, since the business can go bankrupt easily if the BTC value would swing down by e.g. 10% (and their counter parties denominate in fiat).
- People in countries where local currency is rapidly inflating. Being able to switch to stable fiat is already massive improvement of experience and potentially human rights. It would be better if they switch to Bitcoin, but the stablecoin first step would imo provide a lot of value already.
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I don’t think it’s worthwhile to pretend that BTC has a stable value.
The way I think about it is - fiat currencies like the dollar have optimized fulfilling as much of the total accessible market, as possible, making sacrifices on the soundness and hardness of the money.
Bitcoin on the other hand does the opposite (and it’s obviously much newer), where it maintains its hardness/soundness at the cost of a slower adoption (relative to fiat).
The instability of bitcoin come from the fact is that it’s significantly lower on the adoption curve, but it maintains excellent fundamentals. Fiat again, the opposite.
I guess the point I’m making is that it’s impossible to measure “stability” given both variables have different unstable properties. Let’s just be honest about it.
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