First I want to acknowledge that I don't regard myself as well informed to all the intricacies of bitcoin, fiat, and how the world works lol. I'm a novice trying to learn. I also don’t believe our current monetary policy is without its major concerns and flaws the more I look into it. To note, a lot of this is directed at the idea of transitioning over time to full US/world adoption of bitcoin as main currency. These are my thoughts so far on bitcoin vs fiat:
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You hear it all the time: "We keep printing money, Bitcoin takes currency out of the hands of government and gives control to the people, its supply is fixed, no inflation, stable". But it seems a fixed supply currency would make it more difficult to get through economic shocks and disasters. People stop spending money and only buy essentials. Plus the value is always going to increase as new things get introduced, which could result in people holding onto their money since they know it will go up in value over time, which results in less investment, less economic growth, harder to restart the economy after a major event that causes recession. Many people point to the Great Depression as an example. It seemed a mostly fixed money supply made it last longer than it would have with fiat. It literally took another disaster to get us out of the Great Depression, WWIl. Who knows how much longer it would have lasted. Then there’s the Great Recession. We got out of it through fiscal and monetary stimulus. Same with Covid (I think government could have handled it better). To me the current pendulum model of balancing interest rates and inflation makes sense. They give controls to help keep a relatively stable modern growth economy. It’s not perfect, and hopefully it gets better, but why throw the baby out with the bath water for something so extreme that imo appears to have major flaws from a pure macro economics standpoint?
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“Bitcoin will give more purchasing power to the poor and those in developing countries”. Ok. What happens to the people with no bitcoin or very little if US/world transitioned to bitcoin? The top 1% of holders already own vast majority of bitcoin yet make up fractions of a percent of the population. I've heard people say "well those holders would then sell some of their coin off, so the rest of the world will get pulled in". This sounds like an extremely small ruling class of the world. I think this is a moot point though, not likely to happen because the world is too complicated with all the countries and different economies, you won't get all onboard. We live in a democracy. Even if you could put it to a popular vote, I don't think us citizens would adopt bitcoin because most don't own any. If they did vote yes, then they aren't too smart imo (unless l'm totally missing something here). There's the anarchy option, but we're probably already screwed at that point.
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Maybe bitcoin doesn't become the us/world currency, but it still stays around to be used as a form of currency. I'm guessing the price will plummet after all are mined, but maybe stay high on the hopes it will be fully adopted, idk. Would it still be tied to the dollar? Maybe it's worth more than the dollar for some of its utility, like easily exchanging value between users in different countries? But with other technological advances coming I could see it becoming obsolete.
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This isn't really a direct argument against Bitcoin or the future of it, but more so the feeling I get with how it came into existence and the hype around it now. Satoshi the phantom... could be dead, could have forgotten his passkey, or is the miracle altruistic hero of humanity. This is seriously fishy, cause for concern, the lack transparency. Then there's the pure speculation and hype of it all. So many people pushing it, yet not trying to fully explain it other than "it gets money out of the hands of government" "inflation bad" "fixed supply good". It seems no one fully understands it and the reasons I hear over and over are oversimplified. Almost everyone I know who owns bitcoin bought it because everyone is telling them to, and they are planning to sell it when they've made a good profit and have their dollars back. When the masses are being told they should buy something, to get onboard quickly before all the coins are taken, using oversimplified reasons, or even if someone does try to understand it's extremely difficult.... this doesn’t sound good at all. Again, l'm a novice and only have bits and pieces of information.
What are your thoughts? Thanks!
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