Why Thinking In Terms Of Crypto Doesn't Work

Why Thinking In Terms Of Crypto Doesn't Work

The developers of Samurai wallet removed fiat conversions, explaining that people should understand that by sending Bitcoin they send Bitcoin, not dollars, so there's no need to think in fiat terms. But this seems like an improper decision...

There’s only one thing in the world that doesn’t make sense to me. How do all these people see crypto adoption to happen? Maybe one day everybody should say ‘Well, let’s switch 2 Bitcoin, who needs these stupid dolla’. And by everybody I mean, literally, everybody. Not only consumers but also retailers and manufacturers. That’s a beautiful stance, to declare that crypto adoption goes too slow, and saying “We want it now”, but there are the certain logical reasons behind it.

Let’s think, how long would it take to switch to Bitcoin as a global currency, and why people can’t start counting in satoshis right now?

To understand it, let me ask you a question. How much does one gallon of milk cost in satoshis? 46,000 satoshis? And tomorrow? Or six months ago? So, it’s kind of a floating value, right? Now try to find someone selling milk for Bitcoin. It’s unlikely that you’ll be able to find someone. Or, if you manage to find milk for Bitcoins, its price would probably change every day. The same with all other food manufacturers, the same with every manufacture, where expenditures are involved. They pay in dollars, or in whatever local currency they use, for any raw materials they use, so they have to be profitable in the same currency, to stay in business. The same happens with salaries. If you receive your whole salary in Bitcoin, the rest of the world still doesn’t. I’m trying to say here, that we aren’t ready to stop counting in USD, and start counting in Bitcoins, until there’s no proper infrastructure to spend it.

Another reason why it won’t happen in a few years is that Bitcoin and the whole crypto market is very volatile. Suppliers simply don’t want to expose themselves to that kind of volatility. Crypto is still very immature, let’s face it. How long this volatility will last? Nobody knows. With more capitalization, there will be less volatility, like in global currencies. And even if Bitcoin suddenly becomes more or less stable, it doesn’t mean that global companies will start to accept it, for the same reason they don't trade in gold. The only possible scenario when this could happen is the imaginary situation of de-dollarization if the whole world decides to get rid of the dollar as a global reserve currency. But even in this case, it’s unlikely, ecause many resource exporters are usually owned by the country they reside in, so they would favor the local currency instead of Bitcoin. We see it now, for example, Russia and China already trade for rouble and renminbi.

In addition, the whole economic model is inflationary. Bitcoin is deflationary. It simply doesn’t work that way without rebuilding the principles of economy. It can work in an environment where you have no alternative, for example, in Venezuela. People who live there can count the price in satoshi, because they have no other option, there's a scarcity of USD in the country, and it doesn't produce any goods. All manufacturers in Venezuela went bankrupt in the last years, thus imported goods are their last resort. Since the government sponsors this import, the initial price doesn't matter here. But we don't want to live in such an environment, isn't it?

We have to be realistic: an adoption of global reserve cryptocurrency won't happen even in ten years. USD won't go anywhere in ten years. Most popular instruments on financial markets are nominated in USD. Bitcoin didn't get its ETF yet.

First, we have to build an infrastructure, then we can force users to count prices in Bitcoin, not the other way.


8,744 USD -6.81%
Volume, 24h
3,497,717,274 USD
153,922,072,217 USD

Related news

CNBC Analyst Slams Facebook Libra, Champions Bitcoin

Since the announcement of Facebook’s Libra cryptocurrency, the crypto market and even the tech sector has never been the same. It’s got regulators up in arms about Bitcoin, crypto assets are crashing, and the project may not ever even see the light of day. Even partners have started to abandon the project. The topic came up during a recent segment on CNBC’s Squawk Box, and one of the show’s hosts went on a rant, slamming Facebook’s crypto project while championing Bitcoin for having more desirable qualities than Libra. Joe Squawk: Bitcoin is Decentralized, Libra Is Controlled By Zuckerberg Bitcoin is arguably the most powerful piece of technology the world has ever seen. Its significance is undeniable, and those who are skeptical tend to come around eventually once they dive under the surface and gain a deeper understanding of the crypto asset’s potential. Related Reading | CNBC Host Pushes Bitcoin, Cites Halving and Scarcity As Catalyst for $55K BTC  CNBC Squawk Box host Joe Kernen is the perfect example of a Bitcoin skeptic turned believer. The once crypto pessimist has been recently seen defending Bitcoin and talking of the next potential price peak occurring around the next halving in May 2020. The many reasons why @JoeSquawk hates libra and (presumably) loves bitcoin #btc #decentralized #facebook #privacy $FB pic.twitter.com/PTPEZQguRf — Squawk Box (@SquawkCNBC) August 23, 2019 In the latest segment of CNBC’s Squawk Box, the discussion turned to the topic of Facebook’s Libra cryptocurrency – a polarizing project from the social media powerhouse that’s got financial regulators in defense mode. Kernen says he’s never understood the project and doesn’t like it “one bit.”  He doesn’t like that its “centralized”, and like many, doesn’t like it because it’s “Facebook.” “I don’t like anything about it,” Kernen said. He warns that although Facebook claims it will have a positive impact on the unbanked, the company is an intermediary, and will take a cut from its users even if its feeless – by stealing “all your private data and know all about your bank account.” Facebook has faced a number of privacy-related lawsuits and recently was ordered to pay an unprecedented $5 billion penalty over privacy issues. Bestowing the company with any personal data is a risk, let alone sharing monetary and transaction data with the corporation. Kernen turns the conversation toward Bitcoin, claiming it has an unforgeable value similar to gold, or antiques – things that cannot be duplicated. Bitcoin’s hard-coded digital scarcity gives the crypto assets an attribute similar to gold. Related Reading | CNBC Analyst Calls Secretary Mnuchin Out on Bitcoin Criticism In the past, Kernen has argued that decentralized networks offer more inherent value than even governments due. Facebook’s Libra is the perfect example of how a centralized crypto asset offers the controlling party too much power over its users. Bitcoin was designed to be the first-ever decentralized asset that cannot ever be controlled, nor can it ever be stopped. CNBC Analyst Slams Facebook Libra, Champions Bitcoin was last modified: August 23rd, 2019 by Tony SpilotroThe post CNBC Analyst Slams Facebook Libra, Champions Bitcoin appeared first on NewsBTC.

Bitcoin Adjusted Dominance Soars: Bullish Sign for Times to Come?

Over the last couple of years, the crypto space has grown considerably, and nowadays there are around 2,500 cryptocurrencies in addition to Bitcoin. However, BTC still remains the most valuable and the biggest cryptocurrency in the world in terms of market capitalization. That being said, it is also important to note that over the years, there have been some altcoins that have threatened to upstage the coin as the most dominant cryptocurrencies in the market. Despite that, Bitcoin stands tall, and its domination of the wider crypto market remains as strong as ever. Bitcoin’s Popularity is Huge ... ﾿ Read The Full Article On CryptoCurrencyNews.com Get latest cryptocurrency news on bitcoin, ethereum, initial coin offerings, ICOs, ethereum and all other cryptocurrencies. Learn How to trade on cryptocurrency exchanges. All content provided by Crypto Currency News is subject to our Terms Of Use and Disclaimer.
Crypto Currency News

Hot news

By continuing to browse, you agree to the use of cookies. Read Privacy Policy to know more or withdraw your consent.