All of us in the crypto space want bitcoin to be money. Or any decentralized crypto currency. We would even get behind DOGE if we could just spend it everywhere.
So, why aren't we there yet? Will we ever get there?
Is bitcoin money?
I wish to discuss today many thoughts on this topic, because we are about to enter a tumultuous time for currencies around the world. Things are changing. The olds are dying. We will start seeing bank failures as you might see homicides on the news in Chicago.
The adage:
Bitcoin is the future of money
may be completely wrong. But in a really good way… or maybe not so good.
I am very sure that we will soon have sound money. It is in the air. It is the cycle we are in. It is the Age of Aquarius. The more people who know how evil debt-based fiat currency is, the more people that will want something better. And then it happens. And the Fed will die if it stands in the way (The Fed will die, just like a man holding onto an anchor, for dear life, drowns.)
To rehash all the reasons why we have a zillion coins
The first reason bitcoin is not money is that it has an impossibly small throughput. 1MB blocks every 10 minutes does not make for any throughput. If we had any kind of adoption, that 1MB block would be filled up in the first second.
Thus, there came out litecoin, and DASH, and digibyte, and … even DOGE. (Even STEEM was part of the faster, more, blockchain movement) However, though technically better, nothing else approaches bitcoin in size and adoption.
Now we have a functioning lightning network on top of bitcoin, so if you do not mind off chain transactions, then you can do all your small purchases there.
So, are we technically ready for adoption? Maybe.
One thing we are missing is a bitcoin aggregator. What will Amazonium do when it starts accepting bitcoin (directly)? The company would have thousands, if not millions of incoming small transactions, and have only thousands of larger outgoing transactions. So, they will need a way to work this without costing a fortune, and creating a 1MB block all by themselves. (1 transaction) Maybe Amazonium will run their own lightning node, and work it that way. That could get scary, because they could incorporate claw-backs and such, but maybe that will be the way big sellers will function in the future.
Well, we will work it out, because crypto currencies are the future. Even the Fed thinks so. (but they want to control it)
Bitcoin is the future of money?
The future of money is a cashless society. But this comes after a lot of other things are put into place. Such as, everyone is a part time farmer. (so, we aren't buying/selling an essential good for money) And then, there is some system that had the "credit score" of each person, but it is about how likely the person is to reciprocate, and how much "stuff" they have taken from the system/ how much stuff they have given. And, basically it turns into people asking politely to be given stuff.
You know, the real stuff that is at the basis of what money tries to solve. In the future, that is solved, and money really isn't useful anymore.
But the real question today, is how do we take our first baby steps toward that future?
Well, actually, it seems that bitcoin is leading us there. Bitcoin is becoming a perfect-collateral. It is becoming THE store of wealth. Zero cost of storage. Almost impossible to steal. (except for the human element) Recognized everywhere. And completely audit-able.
It is like EVERYTHING that banks used gold for. Except it doesn't need to be stored in vaults, in the custody of some foreign bank, in order to make trades.
(the physical-ness of gold is not important to the banks. They do not want / need to carry it around in their pockets. They just need to have it. And the NEED everyone else to know they have it.
So, the thing that bitcoin has become is the perfect "central bank gold". The backing of all currency issued, that the people actually use.
Of course, since bitcoin is completely digital, there is no need for central banks. DEX + Smart contracts can completely replace those.
Everything is priced in bitcoin, but no one actually uses bitcoin.
What i am seeing come into being is a system, where everything points back to bitcoin, but bitcoin itself is too big, too expensive to move. Only people buying yachts, or paying their yearly manufacturing bill will actually use bitcoin.
Everyone else will be using the myriad of DEXs and smart contracts / escrows to buy, ship, receive, pay for goods.
You will buy a coffee, priced in bitcoin, and you will send DOGE, and the coffee house will receive litecoin, and the tip will be in USDC (or whatever it is in the future)
And all of this will happen automatically. The inter-chain connections will be in the background, and just work.
(or we could just have the hugest, multi-layered bitcoin lightning networks)
The problems we will solve is that certain transactions need certain levels of security. And each of these levels are fairly clumped together.
- Coffee/tip
- Bills/rent
- Small Business expenses
- Corporation expenses
And each of these will probably find a path that works well for them. Like:
- DOGE
- Digibyte
- Litecoin
- Bitcoin
But, although this works, the glue that holds it all together is what makes it really work. The interchange is important, but equally important is that everything has a standardized, and readily recognized price attached to it.
Thus, everything will be priced in bitcoin (probably micro-sats, nano-sats, pico-sats…) and the chains, inter-chains, DEXs and escrows will take care of everything in between.