As it stands now, there is currently no realistic path for Bitcoin or any cryptocurrency to become a real currency.
This statement may piss off some of the hardcore crypto people that have been on the train since the get go (I’m one of them started mining early on), but we all have to admit that our hopes of any of the current crypto-currencies actually being used as a real currency are slim to none.
Today’s conversations about crypto-currency becoming a real currency tend to focus more around faith and hope rather than anything remotely logical. Like we’re part of some crypto-cult, “You just have to believe man.”
It’s not just because the high transaction fees, there are other major problems that exist, like governments. This alone may keep cyrpto-currencies in their current role of delivering fiat currencies digitally and anonymously for quite some time.
While the infrastructure and idea is amazing it will probably only become the cornerstone of future government backed currencies. There is just no plausible way for BTC or any of the others to act as a stand alone currency without any sort of backing.
This isn’t all inclusive, surely there are other issues, but these ones seem to be related to how society works moreso than any technical issues, and I want to hear from you on how you think these issues could be fixed.
Stability
Sadly, this made the top of my list over being government backed because any currency that wants to be used and continue to be used must be somewhat stable.
The USD is a mess and has lots of inflation issues, and even countries that have gone completely bankrupt and died to inflation, still don’t see such massive swings in their currency value like BTC and others crypto.
Market Trading
This probably has been compounded and made worse with real time trades and markets that allow millions of dollars to pour into BTC on trading platforms allowing the currency value to be distorted and manipulated by “investors”.
Whenever the stock market has crashed it has plunged out of a contagious fear. A bit of bad news makes some people sell, the prices drop, more people sell, and by the time this cycle ends, the stock prices get dangerously close to or less than a companies “book value” (price per share based on assets, cash, etc).
And while BTC isn’t a business that has profits and losses, the value assigned to any given BTC or crypto-currency is a speculative figure based on the current emotions of the market and has no intrinsic or book value. There isn’t a spot where all the shares can be bought out and the company assets sold and disbanded to make a profit.
Everyday Use
So how do we get BTC into the commoners hands without forcing them to constantly convert USD or other currency into BTC?
One way could be to start at the employers and get them to pay their employees, but with no central bank or figure, who will lead that charge?
A multi-corporation pact? Multi-government? Individuals protesting to be paid in BTC?
But what would their pay be based on? Static BTC or static USD?
If you want someone to make $40,000 USD or the equivalent for a year and that happens to be 5 bitcoin per year at the time, do you say no matter what, here’s your 5 bitcoin for the year or do you continuously scale the BTC to equate to the $40,000 USD.
If you don’t pay them flat BTC no matter what, then you’re essentially admitting that BTC is nothing more than the US Dollar in disguise. BTC then becomes the wrapping paper for fiat currencies, the Digital USPS or armored vehicle that can ship fiat currency across the globe anonymously and instantly.
If you say nope, it’s 5 BTC no matter what, then we have janitors that one week can’t afford a gallon of milk, and the next week driving around in a Ferrari.
It’s a hard sell to try to implement something as a currency that isn’t stable.
This issue alone will indefinitely prevent it from being used as anything other than an anonymous way to send USD to someone. BTC is essentially Dollar+ on steroids.
No one is converting their BTC into USD because they think the USD is going to go up in value, the opposite is true, they’re converting USD into BTC to take a gamble and as soon as it gets too high or too low they immediately sell into something they view as a safe investment (USD).
How to Solve Some of These?
Possible solutions to this would have to resemble central banking and a type of gold standard which is the opposite of what BTC hopes to accomplish.
But unless you can tie BTC to another physical commodity where 1 BTC equal so much gold or something else, there may not be a way to stabilize it.
Attaching it to a standard of some type would get rid of the rush of investors trying to make a quick buck and give the BTC a chance to actually becoming a currency, until then it just resembles a get rich quick scam at levels beyond ponzi schemes.
People aren’t buying it to use it, they’re buying it to invest and make money with it, it’s not being looked at as a currency.
To make things worse, the US Government is currently treating it as an asset like a stock so it can tax it and make money off of it.
Maybe it was created secretly by the govt to increase tax revenue (lol just kidding…I hope).
Hard to Remain Anonymous
While your transactions may be completely “anonymous” and while the Government or others may never be able to see how much bitcoin you’ve used in a transaction or how much belongs to you — the reality is, there’s no practical use for it to remain anonymous.
For Bitcoin to be an actual currency it will need to work at grocery stores, dollar stores, retailers, etc. Let’s be generous and pretend we are there now, all places accept Bitcoin.
So we go into a store and we make a purchase, oh hey we’re most likely on camera, identity revealed.
Order something online?
Also not anonymous, you’ll have to most likely enter a shipping address and some of your contact info.
The only thing that may remain anonymous is how much you have but it will be quite easy for the Government to know that you have and use bitcoin and where and how much you’ve spent based on things you’ve bought.
Government Will Make it Illegal
This is a major issue because there’s a good chance the government won’t back bitcoin and will most likely make it illegal to use if/when it starts to compete with the government backed US Dollar (not a problem right now because they’re actually making money from crypto-taxes).
No problem right? They can’t trace transactions.
True, you can hide in the underground world with no real practical use for Bitcoin at all except to transfer it back and forth anonymously between strangers and then convert it to USD to make purchases.
Sounds an awful lot like the behavior of someone doing something illegal doesn’t it?
What is a law abiding normal person going to do if Bitcoin and other crypto-currencies become illegal?
Obviously, if the government says it’s illegal no corporations are going to accept it, and if they do for some reason, the government will be able to summon the companies sale logs to show which individuals have used crypto to buy from them.
This means you’re literally left selling it on the black market but even then, how are you going to get the cash for it?
Transfer it into your bank account?
Also a plan that won’t keep you anonymous.
Your bank is going to have logs of some random ass transactions coming into your account in either a large sum or periodically that it may not recognize.
This may place a flag on your account via government regulation, and upon investigation they may find you are still using crypto, or if you refuse to prove where the money came from they could just fine and jail you anyways for shits and giggles.
Not to mention if it becomes illegal, which is most certainly will if/when it competes with the US Dollar, that a mass sell off will occur dropping the value of it to levels that will make every BTC crash seem small.
The only feasible way for crypto to become a currency is by replacing the USD with government backing but they are going to want some type of controls over it, however that may be possible, and if they can’t then it won’t ever be a currency.
I should also point out that there are other security issues with places that keep BTC wallets with accounts being hacked or hijacked that will also expose you to a similar risk that online banking has but worse because you won’t be able to trace or return the BTC if it is stolen.
But hey, the technology and idea is good, 10/10 would do again.
Summary
I heard a crypto-expert giving a lecture on how this is the new thing and people just aren’t ready for it.
That when we finally switched from gold coins to dollar bills people were like “this isn’t money, this will never work” and then when we switched from Dollars to Credit Cards people were like “this isn’t money, this will never work” and up to today where now we want to switch digital transactions into crypto-currency and people are saying now, “this isn’t money, this will never work”.
Look this isn’t simply about not being ready for technology, this is simply about crypto having no characteristics of a currency.
When we switched to paper money it had a physical asset of gold backing it that was redeemable.
When we switched to credit cards, there were big institutions personally guaranteeing the money.
This is in no way, shape, or form a progression of money — crypto has no backing, no intrinsic value, and is worth whatever people feel it’s worth based on the buy/sell orders of the marketplace.
Using it as a currency would be far worse than using shares of a penny stock as a currency because the swings are insanity.
One bitcoin is basically one share of a non-existent company that has no revenue and no assets. No one is guaranteeing it’s redeemable for anything at all, and it fluctuates so chaotically that we are so far away from this even becoming a real possibility.
It is not something the average person who lives paycheck to paycheck can really rely on for their daily transactions and would be best used as a way to fund corruption and corrupt activities.
You could send grandma $50, except it’s worse than sending cash via regular mail, because no one accepts BTC so she’d have to sell off the BTC and wait for that to hit the account.
Crypto is currently only being used as just a platform to encrypt and secure regular currency, like a special box to put USD in and send it to people on the other end, they open the crypto box and inside is USD or whatever currency you’d like. It is not a currency itself but rather a way to transfer it.
If you made it this far thanks for reading and I made this post because I am a fan of crypto and it’s system but I haven’t seen any answers to these issues, feel free to leave me your thoughts or tell me the way you see this working, whether you agree or disagree.
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