Bitcoin Forum

I have been thinking how the world would be without centralized currencies, also thought of how decentralized currencies are very important, diversity but yet alternatives can enhance economic growth and development, improving standard of quality living. How will the world of the so called only fiat or only crypto will be, let us be realistic. In my opinion, it is not going to be easy.

Assuming the world only had embraced decentralized currencies like Bitcoin in certain time in past, if no fiat was supported, or if nothing like CBDC, this may lead to the developed nations to have the total wealth of live. Taking Africa as an example, the African nations depend more on imports than exports, if there is no fiat devaluation the developing and the underdeveloped nations are using to protect their foreign reserves, they would lack more than these days. Assuming if only decentralized currencies are existing, the developing and underdeveloped countries will use all their decentralized assets for import and nothing will be left, this will be a great suffering while developed nations will be enjoying while the less developing countries like African countries will depend on them.

The centralized currencies which are centrally manipulated to protect individual country's foreign reserve, it helps in discouraging import to certain extent. Although, decentralized currencies helped in cross border payment but the value of dollar and other fiat help in still maintaining the balance, helping in the distribution of cryptocurrencies all over the world. It even happen in a way that most trading p2p are even within the people of the same country trading fiat for cryptocurrencies and yet maintaining the balance.

But the governments are centrally manipulating the fiat and to come CBDC will also be manipulated in such ways as fiat to protect their foreign reserves, protecting foreign reserve is very important to countries development and progress but total centralization is not good and will deprive citizens of freedom. Like in Nigeria, the international monthly spending using Master card was reduced to $100 monthly in 2021 IIRC, which means Nigerians citizens in their country can not be able to buy goods and services from abroad more than $100 monthly using Master card, this is the other side of fiat which make decentralized currencies better because decentralized currencies like Bitcoin gives freedom, not centrally manipulated and yet deflationary and appreciative in design.

So, this led me to the conclusion that both centralized currencies and decentralized currencies are important in economic growth and development. It only remain someone to be wise in a way to use both to increase wealth, especially decentralized currencies like Bitcoin during bullrun which is another topic of discussion.

I accept your discourse as a theoretical discussion really. The developed and non-developed nations are far from renouncing their fiats, even El Salvador that accepts bitcoin as a legal tender keeps the USD as a currency.

I have said this a few times, but anyway:

- The nations can create fiat by simply only accepting certain currency to pay for taxes. That immediately creates a market for it and thus is easy for everyone to adopt it.
- The nations are not going to renounce their fiat because it is a legit instrument of monetary policy that could actually be used correctly, as opposed to what is happening today.
- The governments are not going to renounce their fiat because they can effectively make their citizens poorer as needed by the simple means of devaluating, which causes less havoc and distress than letting inflation creep up.

And there are many other causes, so yes crypto and government issued are going to coexists as long as the citizens who have the right to vote keep on voting people to fool them into believing that everything is going fine.

Most of the problems that come from government mismanagement of central systems, and therefore it is rare to find a country that has voluntarily devalued its currency to compete commercially and gain its products added value.
Many countries randomly print money, which results in inflation and fluctuations in the exchange rate, which leads to a deterioration in the value of the currency, and this problem is solved by centralized currencies.

In general, don't be strict and think of it as black and white, both systems can work side by side.

In a decentralized system, every transaction will be recorded in a ledger that is managed by all crypto currency users around the world, making it more transparent. While fiat currencies are centralized or centralized. The centralized system means that the currency is controlled by a certain entity, in this case the fiat currency is controlled by the government or the central bank. so the two cannot be together but for the user they are interrelated things for the transaction tool and in fact

Certainly there are many other causes for monetary systems use in a positive or negative way to manipulate and limit society according to their power goals! Despite this, we hope, at least, the right and freedom of choosing investment modality prevail, be it fiat, crypto, gold or any other profitable assets through fair taxes.

You are not going to import only. You will export the surplus amount to other countries which are in deficit. Deficit countries will have to import the needy product regardless of the payment method. That's how the economy works. If you look at the ancient time, there was no currency but people used to exchange products as per their needs and surplus. If that will be a problem with a decentralized currency system, that must be a problem with the current centralized currency system too which is not as we can see in reality.
Export and import will be always there; none of the countries will ever have the best output in all aspects. Therefore, you are likely to depend on countries where there's a comparative advantage on certain products. Comparative advantage is still a proven theory and you must be dependent on other countries from this aspect. Therefore, export and import for a country will be there. One country will not only spend decentralized currency, but they will also earn which will create a balance. However, trade surplus and/or deficit will be there which still exists too.

Yes, the whole discussion on this thread makes sense.

While I was reading the OP and answers below it, I gone through the chronological orders of how mankind accepted and removed currencies or at least upgraded the whole trade system.

As human, everyone learns the basic history of economics. First one thing was exchanged for the another for example food for clothes, grains for ornaments and what not if we learn from the Haddappa dynasty. Later on came the crafted stones, copper coins, gold coins etc.

These were changed or adopted time to time as per the need or as the world progressed towards "Modern Dynasties".

Today is no different as well, we are moving so fast technologically and shit so yes decentralised or centralised currencies needed.

They will be adopted accordingly.

I read your discuss and I want to say here that decentralized currency are even the yardstick to measure affluent, standard of living, personal achievement, price of goods etc in Africa.

The decentralized currency has taken over the African financial space. For instance in Zimbabwe, the American dollar is now being used as direct P2P trade and financial transaction because there central currency has been devalued to a point of no value. Decentralized currency is good as coming in to support a failing central currency but at same time, it has worsened the quagmire of the developing countries, making their government to be lazy to think outside the box on ways to get there people and country out of such a bizarre conundrum

Again the government in African countries and other developing countinent are not daunting, fast and proactive thinkers, otherwise if they can't export goods to developed countries, they should be able to have a proper arrangements on exportation of services in human kind and knowledge. Africa is suffering from brain drain because her governments are not good thinkers eschewed from corrupt practices. The African countries should be able to get some benefits from human export either in technical development and quality infrastructures at a reduced rate or a kind of direct trade by barter bargain but these are not done and Nigerian and African doctors, nurses and other experts are everywhere in foreign land and some still under paid because the African government are showing lackadaisical attitude towards the people.

It will not happen like that, and devaluation is not a solution long-term either.

Imports in a country are the results of people's needs, if they can't afford those they will not import a thing, but they will also need to work in order to have enough money for those goods. The moment you pay for something it doesn't mean that the money evaporates from your economy, you have bought a good worth that value, and the same is true for the exporting partner, he has received the money but he has spent a lot on the needed materials and work. A trade deficit is not always a bad thing, and if the country is to be left without money it would somehow magically need to stop every single person from working or making anything of value, long before that the trade deficit will be gone as they will not be able to buy anything.

At the same time just devaluating your currency will at one point reach a dead end, you might be able to keep all the currency in as people would be too poor to travel, you would encourage tourism as things are cheap but there isn't a single country out there that is self-sufficient. And this is far more problematic exactly for developing nations, without purchasing power you are unable to import the means of producing the stuff you want to export, you're cornering yourself with your own policy. Think of Zimbabwe, because of devaluation Zimbabwe should exports a lot of stuff, right? Well, despite that Zimbabwe still runs a trade deficit, and when your currency is worthless you need to prop it, and this can only be done with a strong economy or by, trying to print more money which leads to the situation we all know of.

One more thing, let's assume the developed nations will have to get their hand on all the coins, how would they be able to run a trade surplus when the others have no money to buy stuff from them? They got their hand on all the money but once that value is not circulating anymore it is useless.

Exactly your post showed how both fiat and crypto are benefitial, the governmental manipulations and devaluation of fiat make fiat not to be a totally accurate in design, also are other side aspects of fiat that does not favour citizens as a result of central control like I explained above and using my country, Nigeria as an example which I have some information about, if not because of Bitcoin or some other crypto that most Nigerians that know about crypto are using for monthly spending above $100, the Central Bank of Nigeria makes it impossible for citizen not to be able to spend more than $100 monthly, even to buy goods aborad using the naira credit cards in Nigeria is now not possible if the amount of goods to buy is more than $100 (and monthly sum total of $100 is buying below $100). This even gave me issue at one time when I wanted to deposit $500 into an international platform online, I was unable to. Cryptocurrencies are very important for this negative side of fiat, it gives freedom and total control while they also appreciates/valuate in time of bull run and over long time period. I always believe the value of Bitcoin and other reputed decentralized currencies is because of fiat which have a design that does not give privacy and also depreciate over long term.

I am not even implying devaluation of fiat as the solution, I am focusing on the reason there should be alternatives, why cryptocurrencies can not exist alone and why fiat are not perfect which should lead to the successful coexistence of both currency types. Some countries do ban cryptocurrencies which I have not seen any valid reasons to why cryptocurrencies are banned in such country, depriving human of privacy. If forex are allowed, why not cryptocurrencies to be allowed also because they may think cryptocurrencies are highly volatile? Or is it because there are ways not to pay tax while using cryptocurrencies or something? but I believe cryptocurrencies can also contribute to economic growth and development.

You are right about what you have said, we need the both of them. When I see people saying that one of the currencies will replace the other, I never support that, none of these will go away, they are both going to stay. It is then up to us as people to use these currencies the right way to benefit ourselves. I make use of cryptocurrency as a way to save value, and I don’t like much of my country’s currency because I know for sure that it is not worth holding, even recently it was devalued.

So, what’s the need of holding all in it, when I can hold Bitcoin and save value for myself? Those two are not the only things I hold, I also invest in lands and also stocks. All these things are very important if you want to be saving value.

I guess central currencies were never aiming to create something great, or something perfect. They were created so that it would be central and it would give a sense of ownership, barter couldn't continue forever. Long story short we do not use Dollar because it is the greatest thing ever, we use it because we have to, and there is no other option. Sure now we have bitcoin but it is still in its infancy compared to dollar.

I still believe that we are better with gold coins but that is not going to cut it anymore, we printed way too many dollars and other fiat currencies to go back to gold and silver coins, yet they made the most sense. Long story short we are not going to end up with crypto as our central currency, and fiat is only there because we have no other choice to go with right now, that is the only way to go forward from now on and that's it.

The existence of both decentralized and centralized currency are both vital in keeping the balance in the world. By having centralized currency such as fiat being under the government's ruling, it is very clear that most of the time, financial freedom cannot be found there. On the other hand, decentralized currency such as bitcoin and other crypto offer financial freedom as well as much more better monetary system. If one were to settle in centralized currencies, you cannot blame them but atleast make them aware how much they are being caged in terms of finance when they can have the best experience from crypto.

The country has not given up their legal currency, they have retained the original legal currency while accepting the use of Bitcoin. The decentralized currency system will not replace centralized currency, but an important supplement to the existing currency system. When the legal currency depreciates, imports can be suppressed and the country’s foreign exchange reserves can be protected, and decentralized currency is not controlled by the government, thus achieving freedom. The balance of centralized and decentralized currencies can promote economic growth.

Gold backed currencies weren't that bad but it was against the inflationary human nature. When a couple makes 3+ kids instead of 1 or 2, they increase the human supply but there are limited resources to feed these newly minted people. That's called inflation.

Gold backed currencies were acting as a safety measure against  this scenario but later on people realized that you can't fight human stupidity. They will reproduce more than needed anyway.

Hopefully Bill Gates (the hero) has a good plan to solve this issue. We will see.

They were done loooong time ago, way before I was even born. Gold backed also limited the amount of debt that could be created and at first debt was created to grow bigger and that wasn't a bad thing, think about it there are so many companies that got debt and then used it to grow bigger and they were in horrible financial situation for a long time before they finally started to be huge.

I understand that many bankrupted this way as well but tesla, amazon and many others made a loss for over a decade before they could actually make a profit, tesla still hasn't made a profit yet but they are so big.

The problem however raised when people stopped caring about debt as a way to grow bigger but used debt as a way to get richer, when you get debt and leave that towards shareholders and then when it is getting lower rebuy those, that is just a trick in the book to make sure shareholders paid your debt. Gamestop for example got loved by retail investors who were fighting against wall street, but they used it to pay off all their debts as well, thanks to people giving them free money basically.

I agree with you very much. Countries will not give up their legal currency, because legal currency is to a large extent beneficial to countries and governments. They can obtain very right benefits by controlling and manipulating legal currency. The use of Bitcoin will only be an attempted behavior in some countries, and is a direction of blockchain technology exploration. It will not replace the status of legal currency in various countries.

Probably you meant legal tender, right? Because cryptocurrencies should not be deemed illegitimate, only some countries ban it while it is still even not banned in many other countries. Decentralized currencies is not a replacement but an alternative. Centralized currencies have their own advantages while decentralized ones also have their own advantages. It only remain people that know about the advantages that will know how to use both.

It is quite sensible to think that the world cannot suddenly move to Bitcoin where all the international trade starts happening in bitcoin. Bitcoin is really only about having the right to have a decentralized currency of the internet. As people start to work using the internet and more value is created by teams spread geographically, it is only natural that their efforts and their incentives shouldn't be subject to the scrutiny, taxation and deflation caused by central fiats.

This is why, bitcoin is important. Also, I'd like to say to OP that this umbrella term about "decentralized currencies" is a misnomer and is false. There are no "decentralized currencies". The only thing we have is bitcoin. The network effect, lack of leader and infrastructure cannot be replaced or recreated. People who propose their shitcoins as currencies are really just doing damage to themselves. As netizens, everyone should be very clear that the governments and international banks DO NOT want you to have bitcoin. They have been caught unaware by bitcoin. Its only upto the people now to lose their own freedoms.

So, agree that world economies will always need their central fiats but we need bitcoin, not "decentralized currencies".

That is what even Satoshi intended to do but some people took it a bit too far. If we could have alternative to fiat currency that means we will have a weapon against the injustice that is done to poor people, we as the people who are not wealthy could get together and buy bitcoin and keep it in crypto instead of dealing with fiat, without fiat then what are we even fighting against? Which is why we should be basically considering this as a tool against the fiat injustice of wealthy people.

I personally love fiat, it means that as long as I hold my bitcoins and not sell them, I own more and more fiat without doing anything at all, that is the greatest feeling on the earth because we are talking about a ton of purchasing power we would have lost over course of years if we kept it in fiat, but instead we are not only keep it same, but we are gaining purchasing power at the same period.

I totally agree with the point that both centralized and decentralized currency are needed for economic growth, they both play important role separately even though it seems like centralized currency are not giving much freedom to the people, but am sure in a way there are other benefits alongside, btc gives financial freedom as decentralized currency but also have some shortcomings as well, to me I feel the best approach is to have both available and generally acceptable for people to make their choices which to transact with at a given situation.

I agree. Not the poor actually, the injustice is on the middle classes who end up as wage slaves in this economy of constant fiat printing. The politicians and the economists say that it is for our own good. Coz if they don't print more money, us wage slaves won't spend enough, demand will drop and this leads to stagnation. They conveniently skip over the fact that a) Nobody is ever held responsible for the bank defaults and business bankruptcies and b) All this printed money is basically used to prop up the chosen ones.

Well, I am not against interventions per se, but if the richest have access to shortcuts, why can't the playing field be a bit more level for the average middle class person.

LOL. Can't disagree about the purchasing power. Yet, to maintain this, it is important that bitcoin stands. That is why these generalizations about "decentralized currencies" is wrong. Coz then all those corporate/ foundation coins that are really just businesses, start laying claim to being money themselves. That is the danger and we all should be vocally opposing it at every point. Those projects/ investments are enabled by bitcoin. There will be nothing if we don't have the decentralized bitcoin.

^ The real trouble starts with the bail outs and not with the printing of money. You could print money and distribute it to everyone equally and you would have yourself a good economy, even if companies are looking like they are going down, it is a business and if a business is going down there is two options that government can do, either help them sell a portion of their business so that they could cover the cost, like a company selling 10% stake so that they could recover, or government could just lend the money on a proper rate, LEND it not give it away.

However even when they do that, then they need to make sure they are helping the people who are in debt to banks as well, they can't just help banks and ignore people neither, whatever you do to the bank, then you need to help with the people who have that debt as well to make it fair. It is so possible to have a proper economy in the world, the hard part is to stop peoples greed.