Central bank power on bitcoin?

[ashvvv123]

The discussion on the 2008 financial crisis happening again given we have a digitalised currency was great and I thank you for all who gave their views.

But what do you think the central bank ability is to reduce the effect of the 2008 financial crisis given bitcoin was the main currency?

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[dothebeats]

Well, based on the context of what you're saying, even if bitcoin was the main currency back in 2008, if the same methods of controlling the economy was done, then there's no way a different scenario would be produced, given that they're essentially just using a different medium but the approach was still rather rash and irrational just to get profits in the end. Also, crashes on the economy are bound to happen no matter the currency, so I guess the 2008 financial crisis was inevitable really, only fueled up by different scenarios in the economy, particularly the subprime mortgage market in the US that eerily brought down the whole international banking industry with them.

[omone1]

The economy is been run and controlled by greedy fellows, so with or without bitcoin, it will still bite hard. It's what people really have after they have paid their bills they will save, but the system is so designed that the average worker can hardly save much except they have other source of income, or they are self-employed or investors. Otherwise, the system is built for you to depend on it and run a kind of rat race. Humans are greedy.

[jseverson]

It's not going to be comparable because Bitcoin works differently. I mean I can see how people might draw a parallel, but our current economy is inherently debt driven and relies on being able to control the supply of money. Bitcoin being finite, deflationary, and decentralized, means that it would come with a different set of rules. The miners might be even more powerful than central banks in this scenario because they essentially control the release of new money to the economy. Heck, there might not even be a central bank because what would they even do?

I don't know if you're trying to steer into this or anything, but I'd say it anyway: Bitcoin wouldn't have helped prevent a financial crisis from happening then, and it can't prevent another one from happening now. It's just currency at the end of the day -- not some magical panacea. I get that it's meant to address a lot of problems with traditional finance, but it's not meant to solve everything.

[pushups44]

Bitcoin would function like gold as a reserve currency due to its built-in scarcity, so it would limit central bank monetary options during a recession or depression. For this reason I think bitcoin could serve as a reserve asset within a portfolio, but is unlikely to ever be the sole or main global reserve currency.

[Beerwizzard]

The miners might be even more powerful than central banks in this scenario because they essentially control the release of new money to the economy. Heck, there might not even be a central bank because what would they even do?

They do not control the emission of new coins. No matter how they try they won't get more coins than blockchain allows them. From this point of view, miners only sustain the movement of the currency.
Even if some country will make BTC its main currency then its economy will be crushed by deflation. Miners will never become the main economic power over central banks.

[muslol67]

The discussion on the 2008 financial crisis happening again given we have a digitalised currency was great and I thank you for all who gave their views.

But what do you think the central bank ability is to reduce the effect of the 2008 financial crisis given bitcoin was the main currency?

There is no connection between the digitalization of the economy and Bitcoin. Bitcoin is not digital money! Cryptocurrency! There is so much difference between them!

In an environment where central banks exist, Bitcoin's economic presence cannot be possible. More precisely, central banks have nothing to do with BTC. No need for a central bank!

[Herbert2020]

but bitcoin is not a "main currency" and it will never be because it is not planned to replace anything. so starting a hypothetical question like this is of very little value in my opinion. not to mention that the financial crisis happens because of the debt that the banks created in the society and they will continue doing that while nobody is stopping them. with or without bitcoin they will create a very similar situation and turn everything into shit again!

[Harlot]

Just like what the member who first replied to this thread we will literally see no any changes in the recession we have seen in 2008. 10 years ago Bitcoin literally is valueless and is known by just hundreds of people, there wasn't even no Bitcointalk forum back then so modes of communications and transactions will go through back channels and a few selected modes of communication. If the Central Bank decided to flood their money into Bitcoin which almost majority of the population does not know about it might signal them the wrong idea and might cause more panic in the market.

[MakeMoneyBtc]

I don think bitcoin or other cryptocurrencies can help if a new crisis appear because bitcoin is used only in a small percentage by people. Still, the economy works mostly with fiat so when a crisis appear it will affect everyone.

[seoincorporation]

The discussion on the 2008 financial crisis happening again given we have a digitalised currency was great and I thank you for all who gave their views.

But what do you think the central bank ability is to reduce the effect of the 2008 financial crisis given bitcoin was the main currency?

We know the 2008 crisis was caused because banks give credit to anyone, was easy to banks to invite to each American to their debt so the bubble crash and the crisis come, because all of them spend money they didn't have. And that is impossible with bitcoin. Because as you know bitcoin isn't a debt tool, it's more like cash, so the crisis could be avoided if the main currency were bitcoin in that moment.

[LTCendmanagement]

it is true that indeed the coin price has not jumped so it would be nice if we were desperate for desperate need of money we could sell it even though when the price of coins was decreasing we could still use it when we needed it.

[gantez]

Alright... The scenario is that bitcoin was used back then. In the same way, the crisis would not have been averted because, the issue was that banks where bankrupt and couldn't safe the economy, monies were borrowed and never returned. Same crisis would have still happened.

[YOSHIE]

In this case the power of the central bank plays an active role in handling Bitcoin transactions, it can be said that it has an impact on providing individual services and serving or dealing with digital currency, most digital currencies, such as Bitcoin, are supported by the government, and some do not, which means that each country has different standards and regulations for Bitcoin and cryptocurrency and for a while many countries accept bitcoin as a digital currency.

[traderethereum]

I don't know what the central bank will do to reduce the effect of the financial crisis, but I am sure that they will try many things to prevent the chaos that might happen. But I don't think that the banks will know about bitcoin in deep. Besides that, bitcoin is not already as the main currency and not all countries accepting bitcoin as the payment transaction. Maybe someday bitcoin will be the main currency for all countries.

[kryptqnick]

Well, based on the context of what you're saying, even if bitcoin was the main currency back in 2008, if the same methods of controlling the economy was done, then there's no way a different scenario would be produced, given that they're essentially just using a different medium but the approach was still rather rash and irrational just to get profits in the end. Also, crashes on the economy are bound to happen no matter the currency, so I guess the 2008 financial crisis was inevitable really, only fueled up by different scenarios in the economy, particularly the subprime mortgage market in the US that eerily brought down the whole international banking industry with them.

I agree with you. The cause of 2008-th crisis has nothing to do with the currency. It has to do with a complex system that started from mortgages. People bought real estate with the help of the banks and were expected to pay the mortgage by a certain date. The real estate market experienced essentially something like tulip mania. People invested in mortgages, traders were putting money into CDOs and insurance companies insured these. Then, when people weren't able to pay the mortgages, the prices started going down and thus all of the investments started collapsing as well. Bitcoin could change things temporarily if people who got the houses with the help of mortgages invested in bitcoin, it grew in price and then thus were able to pay for their houses. But such a complex system of trading things that insure trading other things that in return partially representing trading other things was bound to collapse at some point regardless to the currency.

[sheenshane]

I don't know what the central bank will do to reduce the effect of the financial crisis, but I am sure that they will try many things to prevent the chaos that might happen. But I don't think that the banks will know about bitcoin in deep. Besides that, bitcoin is not already as the main currency and not all countries accepting bitcoin as the payment transaction. Maybe someday bitcoin will be the main currency for all countries.

Central banks can manipulate the currency and will have the power to fight the financial crisis by having a big stake in bitcoin.
Oligarchies are always there to manipulate things in the market. They control everything from economics to politics. If you are at the 1% people with the powers and alpha lifestyle, you will definitely know how the world goes.

But bitcoin's system is different compared to fiat amounts of money. Bitcoin is too volatile that we cannot trust when it comes to sustainability. It would make us hurt as well when the things get wrong. Anyways, we can tell that Bitcoin is a digital asset but not digital money, it's actually considered as cryptocurrency and there's a small difference between them.

[n0ne]

For some reason to have control over bitcoin now these people have come up with a varied news which is completely unacceptable. Because what the value of bitcoin by 2008 and the usage it has got might be mere a 0.1% in comparison to the total economy through the fiat. This was completely done by the corporate giants and now it's been put over bitcoin.

[mrdeposit]

I do not think so. First of all, they can not accept Bitcoin overnight, so years are necessary. Secondly, new decisions must be adopted to counter the economic crisis, so changes should be made to counteract the causes of this crisis. Also, noone can guarantee that there will be no crisis after Bitcoin is accepted.

[taratorly]

The discussion on the 2008 financial crisis happening again given we have a digitalised currency was great and I thank you for all who gave their views.

But what do you think the central bank ability is to reduce the effect of the 2008 financial crisis given bitcoin was the main currency?

The economic structure between 2008-2019 is completely different. The structure of the banks at that time is very different today. In 2008, the USD was not so valuable in the face of world currencies. At that time, problems were caused by economic structures.

In 2019, there is almost no structural problem in the world.

In my view, when the current economic congestions occur, the only way to open it is the economic crises. And these crises arise when the economy cannot achieve equilibrium. In my economy, I think the problem of production and consumption imbalance.

I know I extended it. But what I want to say is that Bitcoin cannot be the cause of today's economic hardship. In fact, the solution at the moment can not be. Bitcoin is economically just money. And it's a global circulation. And yet it is not strong enough to touch the economic structure.