The Dollar is Doomed: Why Bitcoin is Here to Stay!
Many naysayers are forecasting the demise of Bitcoin but the facts are no fiat currency has ever survived, and looking at the value of the US dollar (USD) even giant fiat currencies are doomed.
Bitcoin lives forever?
Unlike all national currencies in the world, Bitcoin is not a ‘fiat currency’. According to Cryptocurrency Facts, “Fiat currency is “legal tender” backed by a “central government.” It can take the form of physical dollars (for example paper Federal Reserve notes), or it can be represented electronically, such as with bank credit. The government controls the supply and you can pay your taxes with it. The website continues that by comparison, “Cryptocurrency is not “legal tender” and it is not backed by a central government or bank (it is decentralized and global). Its form is more like bank credit sans the bank (in that it is represented digitally, but not backed by a bank or government). An algorithm controls the supply.”
Bitcoin (BTC) was first mined in 2008 and is now distributed around the world. Its market capitalisation is even now, two years after its value crash, so large that owning 51% of it (and thereby seizing control) would take a vast amount of money - somewhere around $64 billion on today’s prices. This would amount to one of the biggest private financial transactions in history and is nigh impossible.
It is true that other cryptocurrencies have failed. Bitcoinist stated in 2018, “More than 80,000 projects claiming to utilize blockchain technology have launched worldwide since Bitcoin’s underlying technology became the hottest buzzword in business. Of those projects, only a mere eight percent are still active, and the average lifespan of any given project is roughly 1.22 years.” The same site explained, “a Wall Street Journal review of 1,450 documents for digital coin offerings unveiled 271 indicators of fraudulent tactics — including “plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams.””
That leaves 8% that have made progress thanks to having the right investors and users using them for the right things. BTC is the leader of the pack as the longest lived, with the best market cap and the fact it isn’t a fiat currency. Will the dollar survive?
There is a fact in history: no fiat currency has ever survived. Despite the USD being the world’s ‘reserve currency’ instead of traditional gold bars, its value has dropped 92% since 1913 when the Federal Reserve took control of the currency. Put another way, in 2018, you would need $2529 to buy the same goods as you could with $100 in 1913. The currency is falling in value at an average of 3.13% a year. Being state controlled, the survival of USD is down to the whim of our politicians.
Gold Survival Guide state, “A fiat currency relies on faith, and if it’s not backed by anything (like gold), leaders eventually succumb to the temptation to create more and more currency to solve their financial problems. And that dilution has always and inevitably led to extinction.”BTC’s invention in part for same reason as USD’s demiseYou want proof that fiat currencies are unsafe in the hands of their political custodians?The Motley Fool shows, “Embedded in the programming of [the] first bitcoin was the text "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
Trillions of dollars were pumped into the banks in the Credit Crunch, the same banks which had been financing government political parties for decades as insurance against their businesses going wrong due to their ever crazier antics. Payback time from those client politicians had come. The Motley Fool article continued, the text on the first BTC “pointed to the crumbling financial infrastructure of the modern world, and the need for a new way forward.”Seeking Alpha reported in June 2018, “
A couple of decades ago, when the post-war baby boom generation was in its prime earning and tax-paying years, governments had a chance to guarantee the survival of their financial systems.” There was a real potential for the USD and other currencies to live forever. But, Seeking Alpha continued, “But they blew it. Instead of controlling spending, running surpluses and banking the proceeds against the inevitable retirement of millions of boomers, most chose other priorities, whether military, social or (in the US case) both guns and butter. The result, in virtually every developed economy, is pretty much the same: Massive debts and little spare cash heading into the demographic tsunami.”The global financial crisis of 2007 wasn’t the first and won’t be the last.
