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.

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