Let me put it another way. If I were a common man in Argentina, I would love to have bitcoin as a -
- Put option on their central banks money printing policies. If the govt kicks the can down the road, all is well (US). If it can’t, you get a Venezuela.
- As a liquid and trade-able medium of exchange in a dire situation. (Gold wont be able to do - difficult to carry, fight over purity, not easily divisible)
If my currency devalues by 1000% in a week, how do I price goods and buy stuff or how much salary hike do I ask my employer as daily wager?? I know im taking an edge case hard to imagine but there are people in 10 countries in the last decade alone who felt this. Taking a case from my personal life, India was divided, my great grand dad had to leave behind all wealth, land, factories gold. etc. My grandad had to find job as a TC and my family turned from being a thriving business family into one which wanted a secure job, nothing was ever the same as per my dad. Same with Bangladeshi, Afgan immigrants etc, Kashmiri pandits also. These are Indian examples only in the last 3 decades.
I truly agree with your point that Central banks need to use currencies int rates and bonds to keep the economy in check. And it would work tremendously well if the feds had a SOUL :). but the stark reality is that the central banks have shown again and again that they cannot be trusted to take care of the majority, CBs have been poisoned by the crony interests of the few.
I would like to point out that every bailout has only benefited the corporate and the super rich. Even in a country like US, where they are free to inject as much liquidity as they want, the side effects have been flat lining of income of the average American household over the last 40+ years, rising real inflation. Increase in their debt and people having to work multiple jobs to make rents and loan payments.
Also, I believe that governments will continue to have have Fiat currencies to control the basic economies of the countries but a bitcoin pegged global digital currency should find a place in the future. Didn’t we have a gold pegged Fiat currencies before?
Why would the world have a Dollar denominated forex market when US can hold a gun to any countries head and have their way through IMF and the likes.
I believe bitcoin in its final form will have a role to play in every Feds balance sheet. Only a maximalist will believe that Bitcoin will overtake everything, I myself see it as a great viable alternate which deserves more attention and is placed well as a digital means to transfer value.
Even the gold that countries buy is mined and takes man hours and other resources, just as a server mining bitcoin does. Why do countries own gold when they can print as much money as they can?
If world has already seen a time where govt and people can buy gold, and countries have had Gold pegged FIATs, then why cant it be the same for bitcoin? Did pegging the world currencies to Gold make it difficult for the central banks to function in a normal scenario? If this was the case, I would surely like to know and understand. I believe it only stopped the FED from doing rash things that they do now with ease.
One Last thing, countries do not need to dedicate resources towards mining of bitcoin now. 85% of bitcoins have already been mined. They can be bought from the open market. But having enough servers will ensure that any transactions on the network will let a miner make transaction fee. If a country wants a piece of the fee, they are free to setup a server and accumulate some bitcoins on the side.
