20 sats \ 2 replies \ @KingZing OP 15 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
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.
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