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0 sats \ 2 replies \ @KingZing OP 12 Jul 2022 \ parent \ on: I have written an article on medium for Bitcoin failing as a money, let me know how wrong I am! bitcoin
Money is a tool/technology. It enables better way to do medium of exchange (to enable trades) and store of value. We went from seashell, to credit system with paper notes and digital.
There are faith in fiat currency, but that does not mean bitcoin doesn't require faith.
The health of a fiat currency all comes down to government/central banks calming investors that they have things under control, the economy, and national security.
(Ironically Bitcoiners often boast about central bank failure, when their power over the economy is mostly through indirect market forces. This actually enhance the idea that central banks are the ones controlling the market)
Bitcoin requires another type of faith, since at its core, BTC is a ledger system and a commodity, and its latter properties entirely depends on how much the market valuate it.
The current BTC form compete against fiat mostly through it being more scarce and open/efficiency. However scarcity does not demand higher value, how much the market place value on it matters a lot more.
Without high default privacy leading to low censorship resistant, its value proposal is becoming more on number goes up/ponzi side.
At the end, the volatility is its biggest flaw, it almost demands owning another coin along side BTC that is purely for transaction, so that individuals/companies/nation state can have the stability to facilitate the economy.
FX rate is socially/speculative driven, there will never be any technology that can stabilize it.
There are faith in fiat currency, but that does not mean bitcoin doesn't require faith.
I can check the code, the consensus taken along with all the PR made in Github in order to verify every step, change, addition or removal. So, no need of faith here, trustless is the keyword here. That's why I like it.
At the end, the volatility is its biggest flaw
Volatility is a feature in this context because is a consequence of having a completely inflexible and constantly decreasing supply growth; as a matter of fact, most criticism of volatility comes from short term analysis and most people complaining about it are over-invested1 but in the long run, don't matter. Besides, long-term speaking, there is no such thing as stability, we're paying currently the price of have some stables currencies.
Footnotes
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I'm not saying you are, just noting that most cases, people buy sats with loans or mortgage and when they lose, it's not their fault, it's bitcoin. ↩
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Definitely you can confirm the mechanics behind is working, however for a monetary premium product like bitcoin/gold/oil, the volatility makes or breaks its use as a currency.
And this really is the key.
Volatility can kill currency, it kills the raison d'etre for a currency as a tool to facilitate trade and enable economy growth.
It only works if you treat it as an investment asset, however bitcoin maximalist would tell you bitcoin wins out to be the sole money towards the end.
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