When I first joined Steemit 37 days ago I wrote an article similar to this, but as I had very few followers it disappeared very quickly, so I have decided to revisit this subject as I think it is a valid point.
People talk about the coming economical crash, similar to and maybe worse than 2008. Where a total reset will see the dollar and other fiat currencies fail. I agree that this is something that seems pretty inevitable.
"For time and the world do not stand still. Change is the law of life. And those who look only to the past, or the present, are certain to miss the future."
John F. Kennedy
The above is a really important quote, but I think looking back to the past is vital in order to gauge the future.
When the economy collapsed in the great depressions of Germany and the U.S.A, due to hyperinflation people were paying for a loaf of bread with a wheelbarrow full of money.
George Bernard Shaw once said:
"If history repeats itself, and the unexpected always happens, how incapable must Man be of learning from experience"
So my question is this!
Can Bitcoin ever be an alternative when it's tied to fiat currency for it's value ?
People keep saying how well Bitcoin is doing considering how much it's value has increased compared to its first introduction.
I agree Bitcoin's value has increased as more and more people have started to adopt it's use on a daily basis. The question seems to be either, is Bitcoin a store of value like gold and silver that we should invest in and store it away for future use? Or is it a digital currency we should use on a daily basis like we would any other money?
Of course it could be argued it is both.
The problem I can see though comes from the fact its "Value" from day one has always been tied to the U.S dollar. People talked about Bitcoin reaching the magic $3000 dollars again (which it has) and also talk about how much it could be worth in the future in terms of dollars.
Hyperinflation throughout history!
If the dollar collapsed overnight then what would a Bitcoin be worth? How would you give it a value? As of this minute I could send 1 Bitcoin to China and the person receiving it would accept it, happily knowing that if he wanted to he could exchange this for $3263.91 or whatever the current value is compared to the dollar. If the dollar was worthless would someone actually except Bitcoin as payment knowing there is nothing to trade back to?
If the bank is repossessing your house or your energy suppliers are cutting you off due to non payment as a result of one of many possible factors, such as the latest E.U bill that allows banks to stop you withdrawing cash if they fear a bank run. What value would Bitcoin then hold? As non of these will accept it as payment and whatever you converted it back into would then be tied to your bank account which you can not access.
My question is how could Bitcoin ever replace fiat currency when it's valuation is based on it?
Take it away and what is a Bitcoins worth? Like everything it will be worth what someone is willing to accept for it. Like with art, but what exactly that would be? Who knows.
As usual thanks for listening
Happy Steeming Steemers and Steemettes.
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