central banks and Bitcoin

[madu]

Hey,
I am right now a little bit researching about financial stability and monetary policy.
It seems that monetary policy through a central bank is pretty important for the global financial stability.
For example if there is a financial crisis, central banks try activly to stabilize the financial system.
If Bitcoin would replace fiat money and such a crisis would occur, wouldnt this lead to long term financial instability?

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[HeRetiK]

Hey,
I am right now a little bit researching about financial stability and monetary policy.
It seems that monetary policy through a central bank is pretty important for the global financial stability.
For example if there is a financial crisis, central banks try activly to stabilize the financial system.
If Bitcoin would replace fiat money and such a crisis would occur, wouldnt this lead to long term financial instability?

Monetary policies can fail or be tainted by conflicts of interests. Decentralized protocols are predictable and uncorruptable.

Apart from that, no worries. Bitcoin will never replace fiat money and doesn't need to. Some form of inflationary fiat will always be required to enable economic growth.

Look at Bitcoin as a store of value and as a hedge against failing monetary policies that just so happens to be usable as a currency as well.

[cellard]

Hey,
I am right now a little bit researching about financial stability and monetary policy.
It seems that monetary policy through a central bank is pretty important for the global financial stability.
For example if there is a financial crisis, central banks try activly to stabilize the financial system.
If Bitcoin would replace fiat money and such a crisis would occur, wouldnt this lead to long term financial instability?

Monetary policies can fail or be tainted by conflicts of interests. Decentralized protocols are predictable and uncorruptable.

Apart from that, no worries. Bitcoin will never replace fiat money and doesn't need to. Some form of inflationary fiat will always be required to enable economic growth.

Look at Bitcoin as a store of value and as a hedge against failing monetary policies that just so happens to be usable as a currency as well.

I try to explain to big blockers that bitcoin is better dealt as a store of value that acts as a counter-measure to an ever-inflating money (fiat) but they don't care, and want to turn bitcoin into fiat 2.0, which would make it much less valuable.

The only way bitcoin can be viable as a currency is via second layer solutions like LN, not by destroying the core protocol with big blocks, because that would make it exploitable by attacking governments and global forces.

Big blockers are a disgrace to the network.

[Rahar02]

First thing is bitcoin won't replace fiat currency anytime soon, even though in 50 years later I still doubt about it.
Because govs won't let other currency replace their nation currency, and maybe consider to ban bitcoin if they think it's treat central banks authority, such as happened in Ukraine where miners arrested because there's no any legal regulations about bitcoin : https://news.bitcoin.com/arrests-bitcoin-miners-ukraine-questions-legality/
If bitcoin could replace fiat money, if bitcoin reach certain price and huge market cap which can't easily be manipulated. At that time, bitcoin will bring financial stability obviously, because it's not fluctuate a lot anymore and has higher price than any other currencies.

[BitcoinBallerina]

Central banks will not attack Bitcoin a lot until it gets a lot bigger threat.

[babarian]

Central banks will not attack Bitcoin a lot until it gets a lot bigger threat.

Right, I totally agree with your opinion
The central bank will not attack bitcoin like the one we are currently using, so even if the crisis happens bitcoin will not be attacked by the central bank

[Yuhee]

Central banks will not attack Bitcoin a lot until it gets a lot bigger threat.

Right, I totally agree with your opinion
The central bank will not attack bitcoin like the one we are currently using, so even if the crisis happens bitcoin will not be attacked by the central bank

Well in a way, they have different style of transactions and security and off course opportunity. More people are into btc because it gives opportunity to people who really doesn't have any money without thinking about interest and taxes. Furthermore banks are just affiliation if ever people want to convert btc. Btc is untouchable by any other entities besides the team who holds it and its not easy to conquer a lot of memories or bytes in the internet.

[Nameless27]

Bankers will not just settle on being part of this system but they want to control it. Asking yourself the same question as mine, do you actually believe those who buy bitcoin in the shadow are from banking industry? In no time those greedy banking officials or owners will soon be the one controlling us. It might help for a while but in the long term it might be the one that can affect bitcoin fall.

[orions.belt19]

I don't think that Bitcoin would be able to replace fiat money. First of all, Bitcoin is decentralized. This would be hard to control for the government and the central banks. The central bank decides when and how much fiat money they should produce and inject in the monetary system of the country and I don't think that the central bank would be able to produce Bitcoins out of thin air.

Fiat money and Bitcoin work very differently, so I don't think that it will replace fiat money as monetary system of a country.

[Razick]

I don't think that Bitcoin would be able to replace fiat money. First of all, Bitcoin is decentralized. This would be hard to control for the government and the central banks. The central bank decides when and how much fiat money they should produce and inject in the monetary system of the country and I don't think that the central bank would be able to produce Bitcoins out of thin air.

Fiat money and Bitcoin work very differently, so I don't think that it will replace fiat money as monetary system of a country.

I never thought about it in the way you just said, and it makes a lot of sense. Governments want or need control. However, they can't control Bitcoin, so the idea that fiat will ever disappear, or at least within this century is extremely unlikely.

Most likely, developed nations and anyone with internet in general will gradually adopt to crypto until fiat actually becomes rare.

[cpfreeplz]

Think about this: central banks decide to lend at certain rates based on how the economy is doing. Bitcoins are a central bank and will prevent any need for some third party to randomly decide to change rates. It's a truly free and open market.

[iamTom123]

Hey,
I am right now a little bit researching about financial stability and monetary policy.
It seems that monetary policy through a central bank is pretty important for the global financial stability.
For example if there is a financial crisis, central banks try activly to stabilize the financial system.
If Bitcoin would replace fiat money and such a crisis would occur, wouldnt this lead to long term financial instability?

Monetary policies can fail or be tainted by conflicts of interests. Decentralized protocols are predictable and uncorruptable. Apart from that, no worries. Bitcoin will never replace fiat money and doesn't need to. Some form of inflationary fiat will always be required to enable economic growth. Look at Bitcoin as a store of value and as a hedge against failing monetary policies that just so happens to be usable as a currency as well.

We have the same view on fiat money and cryptocurrency. Fiat money will always exist because not all people can adopt modern technology. Bitcoin and fiat money can be existing alongside each other peacefully and there is no need to replace one another. Realistically, we are still converting our Bitcoin to the local money and it can take a lot of years before there will be a mainstream mass for any cryptocurrency.

Seriously speaking, I don't really understand why we have to push for the fiat money to go. We should let all forms of money exist as long as they are legal tender of a given place and there are people who are using it. It is quite a very big ambition to try to convert all people to get away from fiat money and just use cryptocurrency. We have to remember that the stores we can see down in the isles are not yet accepting Bitcoin and as of now even if they do I will never use my Bitcoin in buying anything because I am speculating that it will further grow in value.

[Beerwizzard]

We have the same view on fiat money and cryptocurrency. Fiat money will always exist because not all people can adopt modern technology. Bitcoin and fiat money can be existing alongside each other peacefully and there is no need to replace one another. Realistically, we are still converting ou

Honestly it seems possible if some country (a smaller one for begining) will guarantee its currency in BTC so it will be more stable and people won't have to adopt for any serious changes. I've heare that in venesuela people already pay with pepes that have the BTC price.

[helloicon]

Well I have never thought about Bitcoins in this way... You have a point there. That's right, central banks tend to have control on most of money flux. But when bitcoins become prevalent, central banks will be likely to take control on criptocurrencies too through policies or regulation.

[the rise]

Well I have never thought about Bitcoins in this way... You have a point there. That's right, central banks tend to have control on most of money flux. But when bitcoins become prevalent, central banks will be likely to take control on criptocurrencies too through policies or regulation.

The point would be very beneficial if bitcoin is within the reach of central bank transactions, if we object to taxes and so on, we still have many virtual market exchanges as the best alternative, I think this would be a good conjunction, better apply bitcoin in shared medium than stand alone and take the fight.

[HeRetiK]

Seriously speaking, I don't really understand why we have to push for the fiat money to go. We should let all forms of money exist as long as they are legal tender of a given place and there are people who are using it. It is quite a very big ambition to try to convert all people to get away from fiat money and just use cryptocurrency. We have to remember that the stores we can see down in the isles are not yet accepting Bitcoin and as of now even if they do I will never use my Bitcoin in buying anything because I am speculating that it will further grow in value.

I think most Bitcoiners that took a closer look into the matter are aware that fully replacing fiat with cryptocurrency is not all that viable (in its current form). Nonetheless one can still dream that one day Bitcoin will be as ubiquitous as the Dollar or the Euro. That's all there is to it. English didn't replace local languages, yet it is understood pretty much everywhere. Bitcoin could play a similar role for currencies.

[mackenzied]

Central banks will not attack Bitcoin a lot until it gets a lot bigger threat.

Without any threat from bitcoin, it does not cause any effect to banks. Conversely, bitcoin supports development for banks, because in countries where bitcoin accepts, banks make transactions and gain profits.

[Carlsen]

Hey,
I am right now a little bit researching about financial stability and monetary policy.
It seems that monetary policy through a central bank is pretty important for the global financial stability.
For example if there is a financial crisis, central banks try activly to stabilize the financial system.
If Bitcoin would replace fiat money and such a crisis would occur, wouldnt this lead to long term financial instability?

I think that is exactly the point why no country should invent bitcoin as their only legal currency.
Bitcoins value is completely determined by the market.
And the market is ruled by businesses.
What businesses care about is their own business. Although they should have some social responsibility, the people way too often play an unimportant ruole in their plans.
A governmant should focus mainly on the well beeing of its citizens. I really assume many of them try.
To manage that you have to be able to influence the market. So you need a fiat that is controlled.

[iram1011]

One thing that everyone should understand is that Bitcoin or any cryptocurrency is not going to replace any national currency. Otherwise it would lead to economic breakdown for a country. A highly volatile currency is not what is needed to run a country.

Central banks will not attack Bitcoin a lot until it gets a lot bigger threat.

Without any threat from bitcoin, it does not cause any effect to banks. Conversely, bitcoin supports development for banks, because in countries where bitcoin accepts, banks make transactions and gain profits.

There is indeed a threat to banks from Bitcoin. Bitcoin is like having your own bank and managing your own money whereas banks act as a middleman and earn profit out of this practice. Thus, Bitcoin certainly not going to kill banks but still possess a threat at some level.

[cellard]

Hey,
I am right now a little bit researching about financial stability and monetary policy.
It seems that monetary policy through a central bank is pretty important for the global financial stability.
For example if there is a financial crisis, central banks try activly to stabilize the financial system.
If Bitcoin would replace fiat money and such a crisis would occur, wouldnt this lead to long term financial instability?

Monetary policies can fail or be tainted by conflicts of interests. Decentralized protocols are predictable and uncorruptable. Apart from that, no worries. Bitcoin will never replace fiat money and doesn't need to. Some form of inflationary fiat will always be required to enable economic growth. Look at Bitcoin as a store of value and as a hedge against failing monetary policies that just so happens to be usable as a currency as well.

We have the same view on fiat money and cryptocurrency. Fiat money will always exist because not all people can adopt modern technology. Bitcoin and fiat money can be existing alongside each other peacefully and there is no need to replace one another. Realistically, we are still converting our Bitcoin to the local money and it can take a lot of years before there will be a mainstream mass for any cryptocurrency.

Seriously speaking, I don't really understand why we have to push for the fiat money to go. We should let all forms of money exist as long as they are legal tender of a given place and there are people who are using it. It is quite a very big ambition to try to convert all people to get away from fiat money and just use cryptocurrency. We have to remember that the stores we can see down in the isles are not yet accepting Bitcoin and as of now even if they do I will never use my Bitcoin in buying anything because I am speculating that it will further grow in value.

I disagree. You claim that fiat money will always exist because" not all people can adopt modern technology."

Right now all you need is a cheap phone that can do SMS and you are already on the blockchain, being able to send and recieve transactions. And now we got the blockstream satellites so the coverage is pretty much global.

Are you saying that in 100 years, even the poorest spots on earth will not have support for BTC transactions? because I think you are wrong.

Over time, all societies on earth will have access to the blockchain. There are already cheap SMS Nokia phones all over africa, imagine in 2100 or something. The overall technological level always goes up.