2008 financial crisis with bitcoin?

[Mometaskers]

I'm not economically literate and the 2008 crisis didn't affect me much but yes, we can still experience it again even if we no longer use fiat.

From what I understand it was caused by banks recklessly giving out loans and then bundling these loans and "trading" them. We'd likely still have a banking sector in a bitcoin-only world and crises would still keep happening if they are allowed to get into these crazy schemes.

[eaLiTy]

What do you think is the likelihood of a 2008 financial crisis happening again if we only used bitcoin and there were no fiat money at all?

When we are thinking about a realistic scenario then there wont be a time when there is no fiat money at all, we might see the entire fiat currency we use know use as digital currency but never expect anything more than that, bitcoin is not invented to replace the fiat currency and the financial crises in 2008 is not the first crises and will not be the last one, it is a cycle and we will see those kind of crises in the future too, if there is a centralized crises then the decentralized market will boom without a doubt.

[cryptomaster420]

What do you think is the likelihood of a 2008 financial crisis happening again if we only used bitcoin and there were no fiat money at all?

Inflation-free world base currency means a complete change of the market cycle we're used to - but it also depends on how loans are being processed. Imho crisis period will still happen, but probably not as severe, and we can only guess until it happens.

[logfiles]

What do you think is the likelihood of a 2008 financial crisis happening again if we only used bitcoin and there were no fiat money at all?

My believe is that it would still be all the same.
I don't think Bitcoin would stop inflation or deflation. We are only a few users on it, but we can already feel the effects of its price drops.

[Lexurdania]

What do you think is the likelihood of a 2008 financial crisis happening again if we only used bitcoin and there were no fiat money at all?

My believe is that it would still be all the same.
I don't think Bitcoin would stop inflation or deflation. We are only a few users on it, but we can already feel the effects of its price drops.

With limited supply, bitcoin can holding back inflation. Inflation happen because paper money always flooding money market and its economic law applied on supply and demand.

[karloscimot]

Financial crisis happening around the world isn't a big thing, what we see in the market is just common. I expect good acceptance from the community, which is enough to make the economic balance. In the past even when the world economy is down bitcoin showed positive signs of growth. This aasure that there won't be anymore financial crisis.

financial crisis usually coincides with the occurrence of trade wars or the like, something like this is also happening in the china vs USA trade war which results in a slowdown in the world economy. to prevent a currency war, the role of bitcoin can be a solution for countries affected by hyper inflation such as venezuela or countries in Africa and other countries. the existence of bitcoin can be the best solution for the business world to avoid the currency wars that are usually played by big countries like America.

[jseverson]

I don't think Bitcoin would stop inflation or deflation. We are only a few users on it, but we can already feel the effects of its price drops.

There should actually be very little inflation, if at all, because of Bitcoin's deflationary nature. Governments wouldn't be able to print more money (which is the primary cause of inflation), and that could come with its own sets of problems.

It would be impossible to tell all in all, because an economy which runs on a deflationary currency would have to be run in a completely different way. Not being able to print additional money is one thing, but imagine an economy full of HODLers who don't want to spend because supply is always short and value always grows. Everything has to be worked on from the ground up to make sure things don't descend into chaos.

[marcbitcoins]

What do you think is the likelihood of a 2008 financial crisis happening again if we only used bitcoin and there were no fiat money at all?

I think the effect and performance from 2008 will be the same. If fiat can be used for bad and good then it will be the same if we are using Bitcoin as currency. Fiat and Bitcoin are the same currency but only not the same form therefore i see no difference if finacial crisis will strike again even do Bitcoin will be the sole future currency.

[squatter]

What do you think is the likelihood of a 2008 financial crisis happening again if we only used bitcoin and there were no fiat money at all?

Fiat money isn't the only problem. Fractional reserve lending, debt securitization, banks using collateral posted by clients... The entire financial system is a house of cards. We would need a complete overhaul of the banking system to prevent a major financial crisis like that from occurring again.

[magneto]

What do you think is the likelihood of a 2008 financial crisis happening again if we only used bitcoin and there were no fiat money at all?

I don't think this is a realistic scenario at all.

There isn't really much of a probability that bitcoin will ever replace fiat completely, and there will probably always be some form of centralisation in the currency supply because of the fact that centralised, and government issued cryptos are going to be issued in the future. It's hard seeing that decentralised cryptocurrencies such as BTC being the only currencies used globally, even though I do expect it to go mainstream.

Besides, it's impossible to predict whether or not there will be financial intermediaries that act in the same way as these investment banks did in the crisis with mortgages. Just because the new currency may be decentralised doesn't mean there couldn't be loose lending, or fractional reserve off-chain.

[awawo]

It very possible that we may experience another financial crises because there are various indication to that, but when this crisis will come we don't know yet due to the volatility nature of the cryptocurrency system.

[kaisa]

The financial crisis scenario in the world is a project to attack each other between countries, If all countries have difficulty transferring money between countries, it is likely that crypto can be an alternative means of digital payment. Because the only crypto has no supervision and everyone is free to access, so the financial crisis allows crypto and gold to replace the existing fiat functions.

[Kakmakr]

The 2008 financial crisis were caused by reckless Banks <Fractional-reserve banking practices>

Fractional-reserve banking is the common practice by commercial banks of accepting deposits, and making loans or investments, while holding reserves at least equal to a fraction of the bank's deposit liabilities. Reserves are held as currency in the bank, or as balances in the bank's accounts at the central bank. Source : Wikipedia

We know some Crypto currency exchanges are guilty of doing Fractional-reserve practices and we might have the same thing in the future, if this becomes the norm. <It is our duty to prevent the same thing from happening in Bitcoin>  

[amishmanish]

So having bitcoin as a currency without any fiat wouldn't have changed the fate. No matter what currency system we have, this had to happen!

The reason you gave for financial crisis is succinct and correct. I disagree on the point that if Bitcoin had replaced Fiat and particularly replaced USD as the Reserve currency, even then the crisis would have taken the same shape.

 The so called financial watchdogs of US were supposed to call out the malpractices while they were happening. They took the "too-big-to-fail" approach for heavyweight investment banks/ insurers and did not intervene timely.  This approach is a direct result of the ability of these "watchdogs" to tide over any such screw-ups by simply printing more money. Quantitative Easing, they called it.

In a world where Bitcoin would be the reserve currency, such adventurism with people's money and savings would simply not be possible. Hence, the financial crisis and the ripple effect that Inflation due to pumping of more money has on the working class wouldn't have been so severe.