The Dollar Is Dying - Proposing The New Bitcoin Standard
There is a huge pink crypto elephant in the room, one that I have been mulling over for quite some time now. Just now, as I was answering a rather juicy comment on my post from the erudite @fitzgibbon, thoughts crystalised in my mind and I felt it was time to splurge forth my thoughts on the matter.
So thank you Mr. @fitzgibbon, I am eternally grateful for contributions such as yours.
The Death Of Fiat
In can be argued that the death knell for fiat currencies was sounded long ago; around 1971 when the gold standard was dropped as a way of valuing and measuring currency, in favour of a model based on debt.
Back then it was felt that it was harder to get the economy moving in times of crisis and strife, because more money could not be injected into the system.
Some people have good business ideas and acumen to back them up, surely those people should have access to credit?
Plus of course, those mid-to-late 20th century politicians had their own elephant-in-the-room scenario. The fact that there was clearly more money in the world than all the gold could ever account for.
So move we did, from the promise to pay the sum of a piece of government approved paper in gold, to paying it in debt.
Fast forward to today, and all of our money is produced on the back of debt, the faster banks lend money, the faster the federal banks will print it, and so the downward spiral continues.
Hence the reason why $10,000 in 2010, just seven years ago, is only worth circa $8,600 today when adjusted for inflation . . .
Seeing Through The Looking Glass
The illusion of the stability of fiat currency, is perpetuated by the fact that one dollar, or yen, rubble or pound, is always worth exactly one of itself.
Of course they are measured by how much they are worth compared to each other. However if you compare one fractionally reserved currency with another, the illusion of stability is introduced.
Because of course if the dollar is devaluing everyday due to the sheer volume of new notes being produced each and every minute of the day, and the same thing is happening to the British pound, then of course they will stay roughly in tune with each other over time.
However if say each currency was viewed in terms of what it was worth just one generation (20 years) ago, the illusion of stability would be shattered.
Then we would see that a 1997 USD was worth more than twice a 2017 USD . . .
Of course we wouldn't get the same wild fluctuations, however it would fluctuate just like crypto, the only difference is the general trend would reveal itself to be down.
Time To Break Free
Crypto is growing up fast, I don't feel like I've been in it that long, yet in the time I've joined, I've seen people talking about how if their crypto reached a dollar that would be the moon, to several dozens of cryptos worth way more than a dollar.
So back to the pink crypto elephant in the room, if fiat is so bad; and the answer to the fallacies of fractionally reserved currencies is cryptocurrency, then why oh why do we still measure crypto against fiat?
In my proposal that I set out in my Is It Time For SBD To Grow Up And Peg Itself To Bitcoin? - A.K.A Dump The Dollar article, I suggested that SBD be pegged to Bitcoin and not the dollar.
The Bitcoin Gold Standard (Not BTG!)
How the pegging would work is quite simple, a snapshot of the value of Bitcoin compared to a bunch of fiat currencies, a few precious metals and minerals, and some other key cryptos is taken on a particular day.
So say for argument sake on 31st Dec 2017 we find out that 100,000 satoshis is worth $18, 20 grams of gold and 22 eth (not real figures), that then becomes our standard.
We call it whatever, something along the lines of the New Bitcoin Standard (NBS) and that's that, everything is from that point on measured using the standard, and of course the standard isn't affected by a rise or fall in the price of Bitcoin.
The advantages of doing this is that we have a steady and stable standard to base value on, and we are sticking two fingers up to fiat and telling them that it simply has little or no place in the new paradigm.
Vive la crypto revolution!!
WHAT DO YOU GUYS THINK; SHOULD WE CARRY ON BASING THE VALUE OF CRYPTO ON HOW MUCH FIAT IT'S WORTH, OR SHOULD WE MOVE TO OUR OWN UNIQUE STANDARD?
AS EVER, LET ME KNOW BELOW!
Move on to our own unique standard.
Away with the bureaucracies, and centralized control, and in camera dealings and forward with the transparency and decentralization of cryptos.
Which is what i see as inevitable.
What especuially surprises me with crypto detractors, is the hullabaloo whenever Crypto lowers. I mean, $13,000 worth or there abouts, and its a tragedy...enough to drum of bubbles and bubble.....as though it is 0$
So yes, making our own standard, pegging SBD against bitcoin rather than the dollar is well with me.
I think we should place crypto currency at its own unique standard. We're tired of being controlled and restricted by the government using fiat currencies. The time for fiat currencies have come and have gone, this is a new age; the age of crypto currency; the age of decentralization.... I'm in for crypto currency baving its own standards.
This way to Easy Livin Land. Exit from Matrix here. Pay Troll the toll then proceed to paradise!
I think bitcoin is slowly becoming exactly what it was not meant to be....the opposite of Satoshi's intentions with the design of the whole thing.....altcoins are paving the way for faster transactions with lower fees, I'm supporting those more now.
The dollar is dying. Even Janet Yellen said out debt levels should keep us up at night. I’m long cryptos!
https://www.google.com/amp/s/www.cnbc.com/amp/2017/11/29/yellen-20-trillion-national-debt-should-keep-people-awake-at-night.html
the debt system is what has cause most countries to collapse cause it leads to greed which leads to corruption which leads to poverty, we should take our money back rather than wasting it, this is where cryptos are useful . And BSD could make a good measure of standard
Let's move on. Fiat has had its day. It's almost 2018, about time we got a standard that is actually fair to all individuals, instead of just a happy few.
Many thanks for mentioning me, didn't expect that!
That is fellowship, @fitzgibbon! I admire the compliment from, and now, to @cryptogee
Indeed. First more stores needs to suppoert Crypto so we can compare how much crypto for bread and we need more stable cryptocurrency, beacuse right now it is like ouu look a new yogurt it is 0,00000008 btc that was like 21c. Great I will take 10 of them.
At cashier: ohhh well loks like btc went down so I paid 100$ for yogurt. Better be good fucker.
Wild'n'Free Diary wishes you all Merry Christmas and peaceful holidays.
Hey @cryptogee, thanks for sharing your thoughts on this great post!
I've noticed that most of the commenters are strongly for crypto to move to its own unique standard. This is understandable due to the vision of Bitcoin and other cryptocurrencies for complete decentralisation of currencies.
I think this is the ideal scenario for all of us, however, at this moment in time, it would be illogical to do so. The reason why Cryptocurrencies are finally getting some headway and some positive action worldwide is due to the sudden beginning of mass adoption in the past few months. This mass adoption has been fueled by societies ability to compare the price of a BTC/ETH to the USD or the respective currency. (Even though in reality, the USD and GBP are meaningless, they hold value in our minds due to society's adoption of them over the years.) Therefore this allows us to compare the price of something that arguably the mass do not understand (Cryptocurrency) to something we can all compare due to its effect on our day to day life.
I believe that this is because we are yet to see BTC adopted into our day-to-day life completely. We know that we can go to the store and pay in GBP for a chocolate bar, however, we cannot go with the same certainty and pay with Bitcoin/any other cryptocurrency. This allows us to simply and intrinsically compare the price of the digital currency to something that's real.
Therefore more trust in cryptocurrency needs to occur, as soon as the trust in Cryptocurrencies surpasses the trust in fiat, we will be in a completely different boat.
In essence, I would argue that more mass adoption and understanding needs to happen before we can start to give cryptocurrencies their own unique standard. Then, the decentralisation of currency will finally begin to take place in society.
Please let me know what you think...
Cheers, hope to connect again soon!
No, we don't need a bitcoin standard. Or a steem standard. Or any standard.
The standard is what creates the problems in the first place. Instead, allow the free market of money to let you (and me, and everyone else) decide for themselves what form of money is best for their situations.
People complain that without some arbitrary authority making the rules there will be chaos and nobody will know how to transact with others. This is nonsense.
A trade occurs when a willing buyer and a willing seller meet. If the buyer and seller want to trade goats for cars, then fine. If they want to trade bitcoin for pizza, then fine. If they want to trade gold for real estate, then fine.
The decisions of millions or billions of people acting will create a market consensus on which money is good, and which money is bad.