Many people dream of seeing Bitcoin as the only currency in the economy, but does it make sense?
People who own Bitcoin should be very clear about the true nature of the Bitcoin project. In other words, what is Bitcoin? This final vision of Bitcoin must come not from the discourse of a few, but from the majority behaviour of the entire community. In other words, Bitcoin is finally what it shows itself to be. And it is not what some aspire it to be. Is Bitcoin a store of value? Is Bitcoin a form of payment? Or is Bitcoin a reform movement in economic policy? No, Bitcoin is not these three things at once.
One instrument can have several functions at the same time. But every instrument has an essential function. That is, its primary function. And the secret to discovering this function lies in usefulness. A hammer can be used to step on paper or scratch your back. But it is only when we have to drive a nail into the wood that we realise its true specificity.
Much has been said about the importance of adopting Bitcoin in retail. Bitcoin as a form of payment. A kind of decentralised PayPal. Bitcoin, the currency. I’m talking about the idea of using Bitcoin to make everyday payments like buying a coffee or buying from the market. In this scenario, it’s important that shops accept Bitcoin in the same way that they accept Visa and MasterCard. The challenge here is twofold. On the one hand, there is the challenge of public acceptance. In other words, we must increase the points of acceptance in the shops. And, on the other hand, there is the technical challenge of scalability. The number of transactions per second and the capacity of the network.
In this vision, we have a lot of competition. And I’m afraid Bitcoin is coming at a clear disadvantage. You have to compete with paper, plastic and digital. I am referring to established networks that work relatively well in terms of speed and cost. We also have the inherent difficulties of being an unstable currency. And it is not just a matter of unit of account. The problem here is credit. Traders have obligations to banks, the government, and their suppliers. So they cannot afford to accept an unstable currency that can eliminate their margin due to exchange rate fluctuations. Additionally, we have the accounting and legal issue that always makes it much easier to use legal tender.
The truth is that the adoption of Bitcoin in the retail field is usually just a game of appearances. At heart, it is not real. What usually happens to the retailer who accepts Bitcoin in his shop is that he automatically changes the Bitcoin received to fiat. So this is an adoption of form, but not of substance. If we’re honest, the commerce in Bitcoin is not. It’s a simple sale of Bitcoin to fiat. The only difference is that the sale is not made by the user but by the merchant. The irony is that it would have been easier for the user to make that sale beforehand and make the transition to fiat. That way, it relieves network congestion, reduces costs and saves time.
Of course, the Bitcoin universe is much more complex than creating a new form of payment. Many in the Bitcoin community are actively engaged in a kind of libertarian crusade. And they seek to change the economic system as we know it. In other words, this is an essentially political movement. The idea is to establish a new economic system of hard currency. I’m talking about the separation of the state and the economy, the abolition of fiat money, and the end of central banks to establish a free market system based on the Bitcoin pattern. Likewise. As you heard.
So, all this Bitcoin as a form of payment is really a process of „evangelization“. The idea is that we all start using Bitcoin to eventually create a closed system that dispenses with fiat money in its entirety. In this way, the Government would lose control over the money. This citizen and voluntary uprising would be promoting a libertarian utopia.
All this is based on the idea that things were better before. In other words, the economy worked much better under the gold standard than under the current fiat system. In short, the Bitcoin standard is the solution to our political and economic problems.
This might sound very nice to many, but I am afraid that unfortunately it is a dream based on failed economic ideas. Any economist could tell you that the gold standard had many flaws. In other words, it is not the paradise that libertarians describe. In short, not all of us share libertarian ideas and aspirations. So Bitcoin is not for us? Can you be a Bitcoin user and at the same time not seek the establishment of the Bitcoin standard?
That’s the problem with creating a political movement out of Bitcoin. Politics divides. And political dogmas close the debate. Many influencers defend libertarian ideology and the so-called Immediate Edge boss. In fact, the Bitcoin community takes great pleasure in attacking the monetary policies of the central banks and defending free market fundamentalism at every turn. But are all Bitcoiners like that?
One thing is what they say, and quite another is what they do. Now, what is Bitcoin really? Well, the evidence is extremely clear that Bitcoin is, in fact, a speculative asset. Yes, the average bitcoiner buys Bitcoin, because he wants to make money. It is thought that future demand will increase its price. So he decides to buy Bitcoin as an investment. It’s as simple as that.
That doesn’t rule out the fact that Bitcoin has some very useful features. Of course, it’s a very accessible, portable, and versatile asset. Bitcoin is widely used in the forex market, and in markets where the use of fiat is not convenient due to the restrictions of traditional systems. But, overall, this practical use is in demand and enhances its use as a speculative asset.
Bitcoin as a speculative asset does not require comprehensive economic reform or commercial adoption. Bitcoin as a speculative asset does not require constant criticism from banks or government. What Bitcoin needs is more investors. Institutional capital, liquidity, and confidence. Demand. In other words, Bitcoin is a store of value par excellence.
That whole idea of the Bitcoin boss, at heart, is pure propaganda. In my opinion, that’s not what Bitcoin is for. All this anti-system scream is the yearning of a politicized minority. But Bitcoin is not at war with the banks, the governments or the Federal Reserve. The opposite is true. The Federal Reserve’s liquidity injections favor Bitcoin. Government support would help Bitcoin a lot. And the investments of banks and financial institutions would push the price of Bitcoin to new highs. Bitcoin pattern? I don’t know. The facts tell a different story.