Sam, if you read this I'm quoting you because you made me think.
Here's my take...
What's your point? BTC doesn't have the "legal tender advantage" because that's not an advantage. Fiat money is money that derives its value from government regulation and backing.
I'd agree that Fiat isn't a "good" thing.
But it's a massive advantage. No matter how worthless the USD is people believe in it because of the Government. People have confidence in it. They don't question its value. And there's nowhere on the planet right now where you're going to starve to death if you've got a few grand in fiat currency in your pocket.
BTC doesn't have that. That's why it's not fiat.
And that's one of many reasons that it'll never work as "real" currency. If you went out on the street right now, and asked 100 random people if they'd trade you $10 for 10 BTC's you'd be lucky to get a taker. Even though they're going for close to $30 each right now.
There's a lot of problems with that, and a lot of reasons why I don't expect it to change.
The problem right now is that it's not liquid. If you want to buy anything with it in day to day life, you have to exchange it back into USD.
That doesn't mean it doesn't work. You know what else isn't fiat? Gold. You aren't making a point.
Gold is historically valuable beyond its role as currency. It non-corrosive. It's easily molded/divided and impossible to counterfeit. It's a status symbol. It's rare enough to be scarce, but easy enough to produce for widespread use.
You can put gold into a safe and reasonably expect it to hold its value 10-years from now. Its value is long established. And people value it for reasons beyond just being a form of currency.
You're saying that BTC won't work because it won't work. You haven't asserted any valid reasons why it won't work. Do you know of a money experiment that has resembled btc in the past that failed? Do you know some economic principle that isn't Keynesian that indicates to you that deflationary experiments won't work? Do you think the volatility will kill BTC? What is it? Because there is a lot of momentum, and simply saying it won't work based on your internal thought experiment is neither helpful nor consistent. What will stop this momentum? Do you have some principle you can derive from early American culture that has to do with regional currencies not working? Do you have a problem with what Bitcoin is backed in? Do you think that the protocol is insecure? Do you know something about quantum computing that I don't that will destroy the protocol? You haven't cited anything. You've simply said it won't work, and that we have to wait a while to find out that you're right. Good for you! I'm excited to find out whether your prediction based on nothing is correct. And whether or not it is, is completely independent of the prediction itself. When or if it all comes tumbling down, you still will not have identified the mechanism that killed the experiment. Your just saying what popular opinion regarding Bitcoin is. Good for you! Very courageous. You and my father who doesn't know how to turn a computer on both agree. Now explain why.
I'm going to skip over a lot of that, especially the deflation part.
I personally equate BTC to something like chips at a casino. In that little bubble, you can buy food and drinks with them. You can barter with them. Whatever you want. But when you come back to reality you'll be trading them in for USD bills.
There's a lot of money to be made right now. But people, at least not outside of that small community, aren't looking at them as a long-term asset.
If the SHTF would you rather want BTC's or gold? It's an easy answer IMO, because the only value that BTC's have are what they're perceived to be worth in fiat money.
If the dollar collapsed do you think you'd be able to cash out your BTC's? Maybe. But I wouldn't bet on it.
The USD went away from the gold standard, but it's still backed by commodities. It's backed by natural resources, land, minerals, oil, private property and future generations of debt.
The value of BTC is backed by speculation. It's not inherently in demand. It's not scarce.
You have to define what failure looks like. If nothing else, the alternative currency experiment has been a great success.
In my personal opinion, failure would be not replacing the monetary system as we know it. Failure is virtually guaranteed.
I love the experiment. And as a commodity to be traded, in the short term I think it's been fun to watch. Maybe it'll still be around in 20 years, who knows?
I like BTC a lot.
I like the simplicity. I like the convenience. The volatility is exciting but it's unpredictable. I think it has the best of intentions. But ultimately it's a tool like a coupon at the grocery store or a chip at the casino.
It has artificial value that can be manipulated in the short-term for profit. In the long term you're going to have to convert it into something else to be an asset.
I believe that for many reasons, but the biggest one is this;
Central banks control the world. They control our governments. They levy our wars. They control our media. They own our property. They control our spending power. They own you.
When the economy is booming, they'll take their cut of everything you produce.
When it's bust, they'll inflate currency, raise interest rates, tax the shit out of you and seize your property.
If it comes down to killing you, or throwing you in jail, it's all good, they make money on that too.
But if BTC ever came close to being something that got in their way, they'd probably find a way to turn it into another tool to control people. If that failed, they'd crush it.
Probably under the guise of "cyber-security".
We can talk about sound money, booms, busts, inflation or supply and demand... But the reality is these people have killed millions to expand this power, a p2p virtual currency ain't going to be what brings them down.
Just my opinion.
"All the perplexities, confusions, and distresses in America arise, not from defects in the Constitution or confederation, not from want of honor or virtue, as much as from downright ignorance of the nature of coin, credit, and circulation."
- John Quincy Adams
"Every effort has been made by the Federal Reserve Board to conceal its powers, but the truth is that the Federal Reserve System has usurped the government. It controls everything in congress and it controls all our foreign relations. It makes and breaks governments at will."
- Louis McFadden, Chairman of the House Committee on Banking and Currency
"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance."
- James Madison
"I have never seen more Senators express discontent with their jobs. I think the major cause is that, deep down in our hearts, we have been accomplices in doing something terrible and unforgivable to our wonderful country. Deep down in our heart, we know that we have given our children a legacy of bankruptcy. We have defrauded our country to get ourselves elected."
- John Danforth
"I have unwittingly ruined my country. A great industrial nation is controlled by it's system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world… no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men."
- Woodrow Wilson
"The one aim of these financiers is world control by the creation of inextinguishable debts."
- Henry Ford
"Should government refrain from regulation and taxation, the worthlessness of the money becomes apparent and the fraud can no longer be concealed."
- Lord John Maynard Keynes, "The Economic Consequences of Peace"
"The Federal Reserve banks are one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this nation is run by the International bankers."
- Congressman Louis T. McFadden (Rep. Pa)
"The Great Depression was not accidental, it was a carefully contrived occurrence. The international Bankers sought to bring about a condition of despair here so that they might emerge as rulers of us all."
- Louis McFadden
Let's end it on a positive one...
"The youth who can solve the money question will do more for the world than all the professional soldiers of history."
- Henry Ford Sr.
