You missed a very important point,Bitcoin is also convertible into other currencies,so even the theoretical fall of the dollar to 0 will not greatly affect the price. Yes, of course, at first there will be a panic in the market and Bitcoin will lose a lot in price, but it will definitely not cost 0 .This is its main advantage, it is freely convertible both in currency and in goods as well and can be exchanged for a service.

You are again forgetting the difference between value and price. Things are not valued in fiat, they are priced in fiat. Value of all currencies (dollar, euro, yuan, bitcoin, yen, ...) is in their purchasing power.

Lets say bitcoin price is $28000 and you want to buy an iPhone that is $800 so you pay 0.02854BTC. If dollar tanks and loses half of its value today, you can still buy the same iPhone with 0.02854BTC tomorrow even though at that time bitcoin should technically be worth $56,000.
This is the difference between value and price in simple terms. Bitcoin value and the iPhone value remained the same so you paid the same amount of bitcoin for its purchase despite the price of both bitcoin and iPhone going up against dollar.

To answer your question, we don't need any system for transition. Bitcoin is a stand alone currency that does not rely on fiat currency of one country. The market may be affected because it is still a small market and market participants are known for their emotional reactions but that's about it.

Well, I have to clarify that personally I have never had any loan or debt in my life so this thread has nothing to do with my experience but intends to find out how people in loan/debt deal with the problem. Let's say you take loans from a bank and sometimes for whatever reason, you can not pay the debt on time, then you borrow money from other channels. Sure this works for a certain period but later bad things may happen, you have to postpone the payment and struggle with finances again. Isn't this a vicious circle ? How would you deal with the problem ? I am all ears.

We can look into that in theory, if all fiat currency goes 0 valuations, and only Bitcoin has worth, then as I stated, 1B=1B.  Depending on the Bitcoin market valuation, fiat currency now has no purchasing power since all of them goes 0 in value, then Bitcoin will be the global currency and can be used to purchase goods and services.   The worth of Bitcoin depends on the market valuation and how much to pay for 1 loaf of bread is dependent on that.  

Bitcoin can't be interpreted in any fiat currency since the situation, in theory, is stated that all went to shit, meaning fiat currencies are equivalent to 0 valuations.  We cannot give any conversion if one factor is equivalent to 0.

That's exactly the problem with fiat currency, the currency always looses value overtime and this always result to massive inflation in the economy where as bitcoin always reflect the opposite of inflation as more adopt it and that's what makes it very unique. Let me use the fiat currency in my country for example, before now like a decade ago the Nigerian 1000 note can actually get you a bag of cement and some buildings materials but due to the excessive printing of the currency it has lost it value totally as you cannot even get a good meal at the restaurant with your 1000 naira note.

What people did back in the day when there were no currency? They traded goods for goods. It's all about demand and necessity. If you need 2 potatoes, but the only option you have is to trade 3/4 onions. And that's the only option you have in this situation. So you will be willing to trade that for the 2 potatoes. Because you need it.
So if you compare that potatoes and onions with Bitcoin and goods, then you can easily value it without the help of USD. It's just easy to do it if you compare the value of BTC with USD. That's why people do it. We just need a new system and calculation for every item with BTC's value, and then you can get the actual value of BTC.

I may have explained in a complicated way. But it is what it is. Demand is the key for value.

As mentioned in the original post, a large part of Bitcoin's positive value (which increases the exchange rate of BTC) is the DEMAND for Bitcoin, via the physical manifestation of that ideological value through trade (in this case, BUYING BTC). However, this is not the end of the story, and you bring up this great philosophical question which I am delighted to dive into! So now we must travel deeper into this rabbit hole, as we ask, what creates this demand!? Why do people find Bitcoin valuable enough to trade anything for it?!

Here is my response to this question in a related discussion at What is bitcoin backed by? My favorite answers


Therefore, we can certainly add to our list that "Mining increases the value of each BTC because it reinforces 'the way BTC works'" and its "secure storage of value coupled with convenient exchange of value."  Personally, I agree with you on both accounts and believe those to be some of the more important and valuable aspects of Bitcoin.

As for the comment regarding Market Capitalization: after this post, I think you have a better understanding of where I was coming from when I posted it, so certainly not arguing with you there!  

I am actually working on creating an inflation-adjusted BTC/USD chart at the moment, just to have a solid visual of that here. Though, honestly, you could just look at a Bitcoin chart priced in gold and you would have another somewhat-similar visual. Like the Market Cap chart, this is just another representation of Bitcoin's value, yes, but I do think they are important when attempting to predict market trends, as you know.

A chart of that can be found at a fellow Bitcoin users blog: http://pricedingold.com/



It's a cool blog. He charts pretty much everything in terms of gold. Lots of great data!!

If the dollar goes to 0 then Bitcoin will still be 1B = 1B.  Bitcoin valuation in terms of fiat currency will be interpreted in another currency if the valuation of Bitcoin in dollar is somehow impossible (dollar getting 0 valuation).  Bitcoin fiat valuation or equivalent can be presented in pounds, yuan, euro or any other fiat currency.  After all dollar is just another currency of thousand that is existing in the global market.

Let's not rush to judgment about news of dedollarization. There are many things that don't look good now, but I wouldn't rule out anything from the USA, everything seems to be political and the USA looks very calm. Although it may look like they are playing it safe, the dollar is still doing well despite all of the news.

Bitcoin is not Dollar and the problem with dollar Lossing value is because it's being excessively printed, where are Bitcoin has a limited supply which can never be increased.