Question for experienced users...

[BitEnthusiast]

I'm going to try and make this question make as much sense as possible. Let's say we get to a point where 1 BTC = $75,000 and companies like Chevrolet accepts BTC to buy a car, would people actually trade their BTC's for fiat, when they could spend BTC? And would this make fiat a commodity? Please correct me if I'm wrong and please don't bash me for being a newb.

[Serge]

fiat will never be a commodity.. bitcoin in my view isn't a commodity as well. a commodity, at least to me, is something that can be used to make something else, basically it is a raw material.

if you have several options to purchase a car, which one would you use? - a more convenient option, right?

hope this answers your questions.

[niko]

It's no different than having savings in different fiat currencies. You choose which to spend, where, and if you are going to exchange first or spend directly - depending on convenience, fees, exchange rates, and maybe even tax implications. Say you are moving from the U.S. to Canada, or from Switzerland to France... You have savings in two currencies, and an option to buy before move, then import, or buy after the move, exchange or not, etc.

[justusranvier]

would people actually trade their BTC's for fiat, when they could spend BTC?

And would this make fiat a commodity?

It would make fiat worthless because nobody would want to have any, kind of like how no one under 40 reads newspapers any more now that we have the Internet.

[acoindr]

It would make fiat worthless because nobody would want to have any, kind of like how no one under 40 reads newspapers any more now that we have the Internet.

That's not entirely true. Fiat has an unfair advantage which is legal tender laws. If you run into someone's kid and get sued the court will order damages paid in fiat. If you have none you need some. Same with tax liabilities.

This is why the U.S. Constitution mandates the States make nothing but gold or silver coins legal tender. If paper can become legal tender, as it is now, then it can have market value even if it wouldn't normally. This gives those in control over the fiat, banks and politicians, exceptional power.

This is why historically governments that desire to be corrupt prefer its citizens not use gold/silver. Bitcoin has the potential to rein in and regulate government as gold can, although fiat can still have some value as long as it remains legal tender.

[lavalampoon]

I'm going to try and make this question make as much sense as possible. Let's say we get to a point where 1 BTC = $75,000 and companies like Chevrolet accepts BTC to buy a car, would people actually trade their BTC's for fiat, when they could spend BTC? And would this make fiat a commodity? Please correct me if I'm wrong and please don't bash me for being a newb.

Bitcoin is superior to fiat in every way, and that will be demonstrated over time. In that future situation it is seems unlikely that anyone would still be converting bitcoins to fiat to purchase things. Car owners would wish to convert their cars directly to bitcoin.

[vaio127]

The collapse of our current monetary system and the adoption of something better is an inevitability.

Consider the financial collapse of the Roman Empire.  Lenders were able to charge interest on loans that were made to other parties.  While this seems like a good situation for the lenders, with a finite amount of physical currency i.e. gold, the lenders eventually possessed all the gold, and the debtors were left with no possible means of repayment.  For centuries afterward, usury was a crime which was punished very harshly because of this.

Fast forward to today.  We've been off the gold standard for quite some time.  While this may have resulted in a temporary economical surplus, it of course would not last.  With nothing to regulate the increase of money, banks have been able to lend vast amounts of money with interest created out of thin air.  More money in circulation means less purchasing power, means higher prices.   Because of this, more and more loans with interest have to be created to stave off the eventual catastrophic deflation and economic collapse such as the great depression.

Unrepresented fiat currency will fail as more people see the relative stability in a finite money supply such as Bitcoin.

[acoindr]

Consider the financial collapse of the Roman Empire.  Lenders were able to charge interest on loans that were made to other parties.  While this seems like a good situation for the lenders, with a finite amount of physical currency i.e. gold, the lenders eventually possessed all the gold, and the debtors were left with no possible means of repayment.  For centuries afterward, usury was a crime which was punished very harshly because of this.

Not exactly. The lenders couldn't possess all the gold. There was (and still is) plenty of gold which can be mined naturally. Also, the lenders would need to put some of their gold back into circulation for things they wanted otherwise it wouldn't make sense to have it. Interest can reflect the market price for the immediacy of money. Interest is not inherently evil. However, I would say interest rates above a certain level can be immoral.

Fast forward to today.  We've been off the gold standard for quite some time.  While this may have resulted in a temporary economical surplus, it of course would not last.  With nothing to regulate the increase of money, banks have been able to lend vast amounts of money with interest created out of thin air.  More money in circulation means less purchasing power, means higher prices.   Because of this, more and more loans with interest have to be created to stave off the eventual catastrophic deflation and economic collapse such as the great depression.

Correct.