Fast Forward Time with Bitcoin thought experiment question

[kesany]

So lets say bitcoin is eventually gonna mean the downfall of the bank
as a wallet is basically a bank. You can store money and make transactions all freely and
autonomously. Theres even coins like populous that aim to make it possible to borrow money from crowd funded pools instead of getting
it from the bank or having to search for an investor who'll definitely take his share.

So when that happens and the banks and the government can't cooperate anymore. And the majority will be payed by bitcoin and wouldn't that
force governments to also start using bitcoin (or any other crypto currency but it wouldn't really matter to much as bitcoin is like the backbone of every coin) which would naturally mean that their own currency will lose its value by the amount that the government choses to use the bitcoins instead. And lets say one day theres not much fiat left ... how would the value of a bitcoin measured? in Eur USD Yen?

Or will it ever even come to such a scenario?

Just really wondering

[ralle14]

It depends because other countries already banned bitcoin if fiat becomes obsolete in the future we should see a new currency of their own that would replace it. We could still use other valuables like gold to determine the value of bitcoin if that happens in the future. It's hard to imagine bitcoin replacing fiat because bitcoin still has flaws and itll be expensive to send small amounts if satoshis becomes valuable.

[slyfox]

So lets say bitcoin is eventually gonna mean the downfall of the bank
as a wallet is basically a bank. You can store money and make transactions all freely and
autonomously. Theres even coins like populous that aim to make it possible to borrow money from crowd funded pools instead of getting
it from the bank or having to search for an investor who'll definitely take his share.

So when that happens and the banks and the government can't cooperate anymore. And the majority will be payed by bitcoin and wouldn't that
force governments to also start using bitcoin (or any other crypto currency but it wouldn't really matter to much as bitcoin is like the backbone of every coin) which would naturally mean that their own currency will lose its value by the amount that the government choses to use the bitcoins instead. And lets say one day theres not much fiat left ... how would the value of a bitcoin measured? in Eur USD Yen?

Or will it ever even come to such a scenario?

Just really wondering

At that point we will not measure the value of bitcoin against fiat since there will not be anymore fiat, we will only think of the value of bitcoin compared to other crypto that is all, that is exactly what we already do with fiat, a dollar is just that a dollar, but when you compare it with the euro then you can make comparisons, that is the way any currency is supposed to work and bitcoin is not going to be an exception of that.

[alyssa85]

Banks will still exist - because their main function is to provide lending (mortgages, loans, credit card advances).

So people will still be going to banks to borrow, and they will still make money charging interest. Maybe they will innovate and start lending cryptocurrency instead. But they will still be lending...

[amishmanish]

So lets say bitcoin is eventually gonna mean the downfall of the bank
as a wallet is basically a bank. You can store money and make transactions all freely and
autonomously. Theres even coins like populous that aim to make it possible to borrow money from crowd funded pools instead of getting
it from the bank or having to search for an investor who'll definitely take his share.

So when that happens and the banks and the government can't cooperate anymore. And the majority will be payed by bitcoin and wouldn't that
force governments to also start using bitcoin (or any other crypto currency but it wouldn't really matter to much as bitcoin is like the backbone of every coin) which would naturally mean that their own currency will lose its value by the amount that the government choses to use the bitcoins instead. And lets say one day theres not much fiat left ... how would the value of a bitcoin measured? in Eur USD Yen?

Or will it ever even come to such a scenario?

Just really wondering

Good thought experiment.

Bitcoin's main intention is to force the banking system to correct itself in such a way that we don't have to be witness to arbitrary decisions from Central banks that are fire-fighting measures to solve problems that shouldn't have been there in the first place.

While the world was reeling under the mortgage crisis and investment banks like Lehman brother and Insurance agencies were conniving to build their castles in the air, the central banks should have stepped in to stop the madness.

What happened instead was that the common people lost their money, the central bank PRINTED more money, that DEBT was took on by the governments (which will be repaid by by cutting public expenditure, calling them austerity measures and increasing taxes, calling their populations lazy). I am sure most people are aware of the way these chips fell and are still affecting common people around the world, especially the youth who were waiting to join the workforce but were beset by crippling unemployment.

Why were the central banks or the big 5 complacent in dealing with the warning signs? Why is it that the wall street guys, the CEOs still laughed their way to the banks with ever increasing bonuses while companies and households collapse? Who answers for the massive NPA's and the bail-outs?

Answer to these questions is that the governemnt monopoly over PRINTING money with all the central banks collaborating (ECB, Federal Reserve etc.) enables this system where corporations are supposed to be too big to fail. Ultimately, all you are left with are curative measures like bail-outs.
Think about if if the underlying currency to be used by all central banks to settle transactions was a deflationary one like bitcoin. There won't be anymore freedom to print money and take on debt at the cost of the masses. This is what happens if Bitcoin replaces fiat as a setllement currency. Banks will exist but as responsible guardians of people's wealth.

[Polipog]

Bitcoin is the most powerful among other currencies, many people stated about bitcoin that someday more banks would eliminated, but the opposite side status of bitcoin is on beyond limits only, because of the negative situation between government and bitcoin. There are some governments institution warned about bitcoin, some also banned on any transactions of bitcoin like bank of america, the merril lynch bank if I'm not mistaken. In my side, as a bitcoiner, i am truly supporting bitcoin management as on how the way they manage bitcoin as being helpful contributed by developing economic status.

[Hydrogen]

So lets say bitcoin is eventually gonna mean the downfall of the bank
as a wallet is basically a bank. You can store money and make transactions all freely and
autonomously.

One interesting contrast between banks and bitcoin is the paradigm shift from "trust based" to "trustless systems".  

As you said your wallet functions like a bank. This has potential to eliminate jobs in the banking industry which could streamline operations, increasing cost effectiveness and efficiency. Similar to walmart and amazon, blockchain based financial systems could cut middle men (workers) out of the equation, reducing costs, increasing profits. It may have potential to eliminate banks entirely.

In the real world, none of this may happen. Banks might cut jobs and layoff workers after shifting to blockchain based systems that's one thing which could be inevitable, under a transition from trust to trustless financial systems potentially reducing workforces and killing jobs. As for the rest, who knows.

So when that happens and the banks and the government can't cooperate anymore. And the majority will be payed by bitcoin and wouldn't that
force governments to also start using bitcoin (or any other crypto currency but it wouldn't really matter to much as bitcoin is like the backbone of every coin) which would naturally mean that their own currency will lose its value by the amount that the government choses to use the bitcoins instead. And lets say one day theres not much fiat left ... how would the value of a bitcoin measured? in Eur USD Yen?

Or will it ever even come to such a scenario?

Just really wondering

Many central banks have expressed intent to issue their own crypto currency. Even socialist(possibly communist) venezuela plans to denominate its oil transactions in a crypto currency which they announced they will issue at a later date. That would appear to be the path they will pursue.

It could be a bad idea for them to follow this road. One of the things which keeps them centralized is all of them relying on the same financial network (SWIFT). Switching to independent networks where they issue competiting crypto currencies utilizing different blockchains, may produce greater competition between central banks which could fracture and destroy the unified front which they historically show to the world.

[pinkflower]

So lets say bitcoin is eventually gonna mean the downfall of the bank
as a wallet is basically a bank. You can store money and make transactions all freely and
autonomously. Theres even coins like populous that aim to make it possible to borrow money from crowd funded pools instead of getting
it from the bank or having to search for an investor who'll definitely take his share.

So when that happens and the banks and the government can't cooperate anymore. And the majority will be payed by bitcoin and wouldn't that
force governments to also start using bitcoin (or any other crypto currency but it wouldn't really matter to much as bitcoin is like the backbone of every coin) which would naturally mean that their own currency will lose its value by the amount that the government choses to use the bitcoins instead. And lets say one day theres not much fiat left ... how would the value of a bitcoin measured? in Eur USD Yen?

Or will it ever even come to such a scenario?

Just really wondering

You didnt have to make one long and forced post about it. Simply ask, "if there was no fiat money, how would BTC's value be measured and on what will it be based on?"

If you ask me, IF BTC becomes the dominant world currency, fiat would still be around BUT it would slowly base its value on BTC, rather than BTC basing its value on fiat.

[hase0278]

If you ask me, IF BTC becomes the dominant world currency, fiat would still be around BUT it would slowly base its value on BTC, rather than BTC basing its value on fiat.

That is if btc will be successful in dominating against other world currency but why do you even think of it dominating atm if Bitcoin itself has gone astray? Instead of it being used as a currency, it is seen by most of it's users as an asset. I can say this for certain because most of us here hodling bitcoin just speculates how it's price will be higher tomorrow and how we will get profit from it. That's not the proper use of a currency IMO and for btc to dominate world currency, it needs to be used in transactions more.

[rickadone]

Banks will still exist - because their main function is to provide lending (mortgages, loans, credit card advances).

Why not we can develop such lending business purely based on bitcoin payment system ? Because banks are using fiats as a momentary units whereas we can easily replace those momentary system with bitcoins. So, the main purpose of banks can be served by adopting bitcoins too.

Maybe they will innovate and start lending cryptocurrency instead. But they will still be lending...

If banks are here only for the purpose of providing loan, then I believe there will be no point of expecting banks to exist against the revolution of bitcoins. Because, bitcoin is capable of providing all the purpose of what we are enjoying with fists.

[jaocoincrypto18]

Banks will still exist - because their main function is to provide lending (mortgages, loans, credit card advances).

So people will still be going to banks to borrow, and they will still make money charging interest. Maybe they will innovate and start lending cryptocurrency instead. But they will still be lending...

In addition, i think banking system will easily shift to digital currency business because they are already used to digital transactions therefore banks will not be superseded but only the fiat currencies and i think this is better to have Bitcoin or Crypto bank because our own digital currencies will be guarded, will be insured and will earn monthly interests as well in which same benefits of the paper money.

[Anteros]

Banks will never allow this! All this is only a dream. No one has yet renounced power, and from such power that the banks have now, even more so. But they can podgygryvat this myth managing crypto currency as it is at its discretion.

[pinkflower]

If you ask me, IF BTC becomes the dominant world currency, fiat would still be around BUT it would slowly base its value on BTC, rather than BTC basing its value on fiat.

That is if btc will be successful in dominating against other world currency but why do you even think of it dominating atm if Bitcoin itself has gone astray? Instead of it being used as a currency, it is seen by most of it's users as an asset. I can say this for certain because most of us here hodling bitcoin just speculates how it's price will be higher tomorrow and how we will get profit from it. That's not the proper use of a currency IMO and for btc to dominate world currency, it needs to be used in transactions more.

Yes thats why I typed it as a BIG IF. Read kesany's post to get the context.

On the topic of BTC not being used as a currency, I have already made that argument a lot of times in the Market subforum. No one is willing to use BTC as a currency because fiat and credit cards are more convenient and more accessible for everyone. BTC is more useful for darknet purchases and maybe other illegal or under the table transactions.

Having that said. Why would I waste BTC on regular items when I can use fiat?