Bitcoin as a "Global Unit of Account"?

[famososMuertos]

Knowing the advantages of using bitcoin does not have to lead us to the permanent idea of eliminating the existence of Fiat.

The different currencies have coexisted for years with an "exaggerated dominance of the Dollar" but far from eliminating or trying to make other currencies disappear, the dollar has benefited from that comparison, so bitcoin is doing the same.

[Artemis3]

I get what you’re trying, but I can’t really imagine the world with just one asset being used. Bitcoin has a fixed supply and it might get to a point where that might become another problem for people around the world, unless maybe when it gets to that time they will look for a way to fix it, maybe by increasing the amount of supply? This topic has been discussed several times in this forum.

I am of the opinion that all can stay, and people should be completely free to choose for themselves at every moment what they want to make use of. And same way, stores can decide whether to display their product prices in BTC or in USD, or whatever currency.

A dev once told me once they could just increase the decimals from 8 to 16, so a new naming unit would probably be needed, unless you want to deal with "old satoshis" and "new satoshis".

Lightning already added 4 more but that is "off chain".

So if the single satoshi becomes way too expensive, an easy fix can be implemented.

As for your opinion, unfortunately the State can get in the way. Some people would want to, but the State is forbidding them from freely accepting payments and pay with bitcoin. But with time, as the old politicians retire, the younger generation who is far more open to bitcoin, will ensure the necessary changes are in place so this can be done.

The final goal is to be able to pay and be paid with bitcoin. no exchanges, no banks, no middlemen.

1. For something like this to happen, I expect that we may need Bitcoin price fluctuate much less.
2. Don't forget that as long as the main currency of a country is fiat, the shop will have the prices primarily in the country's fiat and then converted to all other currencies.

So no, unfortunately I don't expect the prices be shown primarily in bitcoin. Not everywhere.
For all the countries give up their tools for inflation (i.e. stealing money) we need a powerful change. Maybe even a radical change in the way some people end up taking decisions for the countries.

1. Fluctuation will naturally reduce overtime, just like gold.
2. Many people use the USD as a reference, but what if the USD collapses? It will likely pull other fiats into inflation as well, so the reference might as well change to something else like gold.

The bitcoin purchase power can only increase overtime, but should be lower and lower increases, it would eventually get nearly stable but who knows how many years that would take, maybe a century or two...

[naira]

Do you think it's possible Bitcoin will become a "global unit of account" in the future? If not, why? What would a world without Fiat really look like? Your input will be greatly appreciated. Thank you.

It doesn't even need to be the main unit, I'll still be happy, if it's only as a recognized payment alternative, for example. Don't be considered as an enemy to an institution or a party that doesn't like Bitcoin. Globally this would be hard to imagine.

I can only say this is difficult, because so far the adoption is still less than 25% how the world will not allow Bitcoin to be too powerful. There will always be the opposition to thwart it. The absence of a control center is clearly a strong consideration and will be a big obstacle. If we talk about the future, maybe every country will use their own digital currency with a version that is much more crypto-friendly.

[kryptqnick]

Have your ever imagined a world where Bitcoin is the predominant currency for mainstream payments? A world where Fiat no longer exists as people rely on Bitcoin as a global unit of account. That means, people will no longer value things based on Fiat, but rather Bitcoin itself. You would pay for things directly on Bitcoin (for instance 0.000025 BTC for a cup of coffee) without the need to worry about its current exchange rate (or price) relative to Fiat. If that happens, then Bitcoin will "stabilize" effectively proving its use as digital cash. With a country like El Salvador adopting Bitcoin as legal tender, we may be one step closer to "hyperbitcoinization".

Do you think it's possible Bitcoin will become a "global unit of account" in the future? If not, why? What would a world without Fiat really look like? Your input will be greatly appreciated. Thank you.

I think it's possible only with second-layer solutions. The blockchain cannot handle the amount of transactions that would occur. Also, given the volatility of Bitcoin, I think it would still be useful to set prices in something different (at least, for internal pricing purposes), and then update the actual price in BTC in real time (or every few hours). Using Bitcoin as money won't automatically make the coin more stable. Volatility might just be seen differently. Say, one day you spend 0,0001 BTC on a cup of coffee, and in a few days you can afford to buy three cups for 0,0002. That's how you'd know that the value has changed, and what USD currently does is simply gives a useful reference point, but it doesn't even have to be in fiat.

[fiulpro]

Short answer: No
The following are my reasons to support my argument:
1. Not every country will allow bitcoins, ex: North Korea
2. Volatility will cause massive trouble for certain occasions
3. Not everyone does have access to internet or even a simple mobile phone
4. Local markets would not work in countries with economic probelms
5. Not everyone would be able to use it, it does need a minimum technical knowledge
6. Banks can't become obsolete, no matter what they are important to maintain healthy economic balance
7. There would be a fight for power and dominance admist countries and they would try and own bitcoins themselves
8. There would be too many regulations

[bbc.reporter]

That means, people will no longer value things based on Fiat, but rather Bitcoin itself. You would pay for things directly on Bitcoin (for instance 0.000025 BTC for a cup of coffee) without the need to worry about its current exchange rate (or price) relative to Fiat. If that happens, then Bitcoin will "stabilize" effectively proving its use as digital cash.

Hihi, no you won't have problems with the price in USD or your local currency but that would still mean the prices in BTC will not be stable themselves, and they will never be. If everyone, every single person would ditch fiat and stick to a limited supply of coins depending on the number of goods transacted or the size of the economies on global level prices will still be floating around, so there won't be true stabilization.
If for example we would only had bitcoin during this covid mess prices would still have gone up, it's a matter of supply and demand so although 1 bitcoin would have bought you more goods than the equivalent in USD over a longer period it would still have been less than a year an ago. Same for the other situation where you have an economic boom and it will be more valuable in terms of what you can buy with it.

The 0.000 thingy is a false problem anyhow, switch to satoshis, if poeple can deal with paying 20000 VND for one liter of gas they for sure will have no problem paying 5000 sat for the same.

In this type of world, everyone would begin demanding a stable form of currency where the government would again organize a system of currency issuance backed by bitcoin. Many years after this, the central bank will remove itself from the bitcoin standard similar to what many countries did with the gold standard hehehe. The present financial system is not perfect, however, bitcoin will also not make it perfect.

[im posible]

If this is really the case then bitcoin has indirectly unified the world, where bitcoin is one of the universal standards for currency. Unlike today, where the currency of one country is different in value from the currency of another country. I further imagine that the world will become one country that is only separated by region, climate and geographical location.

[NeuroticFish]

2. Many people use the USD as a reference, but what if the USD collapses? It will likely pull other fiats into inflation as well, so the reference might as well change to something else like gold.

The bitcoin purchase power can only increase overtime, but should be lower and lower increases, it would eventually get nearly stable but who knows how many years that would take, maybe a century or two...

USD can easily be replaced by EUR or even JPY if it's the case.
The point is different: as long as governments stick to their own currency, they won't accept the outsider.

While you, and me, and some businesses can use Bitcoin as standard (after the price stops fluctuating wildly), but governments won't.
And again, if you'll want to buy goods and services the starting price will be in the currency of the country the shop resides in. Then it can be derived to Bitcoin and others.

[Abiky]

Bitcoin as a global unit of account is an idea so bad that I don’t think it’s reasonable to even imagine such a thing. Think about coupons or sales. How would you even advertise price of anything knowing it could change so drastically from the time someone leaves their house until they get to the store. Nobody would be spending anything. There’s a reason fiat Ponzi schemes work so well. Trash money makes for good spending and high velocity.

That would only be a problem if you measure Bitcoin's value relative to Fiat. Bitcoin by itself is stable (1 Bitcoin = 1 Bitcoin, remember?) so in a post-Fiat world, people will rely on Bitcoin to determine the value of goods and services. You'd simply pay 2,500 satoshis for a cup of coffee at Starbucks without the need to worry about how much it is worth in terms of Fiat. We're still living in a Fiat world, so it's hard to imagine how life would be after Bitcoin takes over the world. I'm pretty sure governments won't allow Bitcoin to take over the mainstream economy, as that would prevent them from controlling people's lives. Fiat will eventually become digitized, greatly solidifying its position in the mainstream world. Inflation will grow for sure, but that won't make Fiat disappear from the face of the Earth. I'm fine with Bitcoin being an alternative monetary system, as long as it remains decentralized and censorship-resistant. Just my opinion

[bbc.reporter]

@Abiky. In a post-fiat world the currency being used will not be bitcoin. Also if it was, in that type of world there would be more poor people than today because there would be much more people not holding bitcoin than people holding bitcoin. Is that a world you want only because you want your coins to pump? I also hate those bitcoiners who tell everyone to have fun staying poor whenever there is skepticism.

[sirminesalot]

@Abiky. In a post-fiat world the currency being used will not be bitcoin. Also if it was, in that type of world there would be more poor people than today because there would be much more people not holding bitcoin than people holding bitcoin. Is that a world you want only because you want your coins to pump? I also hate those bitcoiners who tell everyone to have fun staying poor whenever there is skepticism.

Isn't it the same just right now in fiat world currency right now ? right now 1% rich people in this world controlled 90% the whole world assets, so there won't be much different that's how the world works right now, but the post-fiat era will not come in near future because i'm sure the world rich people right now won't be replace by the new rich people, they must be need time for transition.

[Molinology]

I don’t think Bitcoin will be a ‘Global Unit of Account’ and there are few reasons for this. Firstly, The value of bitcoin is very high and it will be difficult for some countries to coordinate with such an amount. Secondly, people even though are investing in bitcoin have a tilt towards local currency.
It may become the global cryptocurrency but it is very difficult for bitcoin to become a ‘Global Unit of Account.’

[AakZaki]

It doesn't even need to be the main unit, I'll still be happy, if it's only as a recognized payment alternative, for example. Don't be considered as an enemy to an institution or a party that doesn't like Bitcoin. Globally this would be hard to imagine.

I can only say this is difficult, because so far the adoption is still less than 25% how the world will not allow Bitcoin to be too powerful. There will always be the opposition to thwart it. The absence of a control center is clearly a strong consideration and will be a big obstacle. If we talk about the future, maybe every country will use their own digital currency with a version that is much more crypto-friendly.

It's still difficult, so far adoption has only been carried out in a few countries that have approved Bitcoin from the start.
some other countries or developing countries only provide regulation as a commodity and nothing more. Indeed, not all will accept the existence of bitcoin, such as the government's opposition to bitcoin which does not approve of bitcoin being used in their country.

[bbc.reporter]

@Abiky. In a post-fiat world the currency being used will not be bitcoin. Also if it was, in that type of world there would be more poor people than today because there would be much more people not holding bitcoin than people holding bitcoin. Is that a world you want only because you want your coins to pump? I also hate those bitcoiners who tell everyone to have fun staying poor whenever there is skepticism.

Isn't it the same just right now in fiat world currency right now ? right now 1% rich people in this world controlled 90% the whole world assets, so there won't be much different that's how the world works right now, but the post-fiat era will not come in near future because i'm sure the world rich people right now won't be replace by the new rich people, they must be need time for transition.

It is, however, that is not the argument. The argument is about bitcoin being used as a global unit of account. Do you reckon that volatility is good for the economy? Who would use a currency where the amount they can buy or sell changed everyday?

In any case, find a chart that uses bitcoin as the unit of account, a USD/BTC chart. It makes it appear that the dollar is volatile, does it not? Replace the USD in USD/BTC with the things you buy like your coffee, cheeseburgers or your internet bill.

[The Cryptovator]

No, it wouldn't happen ever. There will fiat always either in paper money or digital cryptocurrency. Just imagine how we evaluate the Bitcoin price? It's always with fiat. So if there is no fiat how will you evaluate the value, means Bitcoin will be valueless. Then it will just like be a fiat. On the other hand, even all countries decide to ban paper money still fiat will exist through stable coins created by the government. Without centralized money, the centralized authority wouldn't exist. So the powerful centralized organization like governments would let it happen.

[TheUltraElite]

The statement that came from a certain bitcoin accepting country's president, comes due to years of hatred against the Dollar added with it the financial incentives that bitcoin-related companies might provide to that country if they come in and settle there. The second point has been the major reason why this country accepted bitcoin as a legal tender despite the public being skeptical about it.

I feel this type of forced acceptance does not generate a healthy ecosystem for something that is new, however I am not the president so it does not matter.

Coming back to the OP's topic, if you look at the global currencies we tend to compare every asset with USD because it is the dominant one but we can also compare with our local currency. Really there is no single "global unit of account", we use what we feel is suitable. Even if in future bitcoin is made the basis of comparing, it would only change the fact that it is deflationary compared to fiat.

[coinism]

If that happens, then Bitcoin will "stabilize" effectively proving its use as digital cash. With a country like El Salvador adopting Bitcoin as legal tender, we may be one step closer to "hyperbitcoinization".

To made all this reality Bitcoin need to stabilises itself first by fixing its shortcomings like price volatility, scalability and fee. Its not possible to made it to main payment system with such shortcomings.

Do you think it's possible Bitcoin will become a "global unit of account" in the future? If not, why? What would a world without Fiat really look like?

After seeing how big powers are reacting towards Bitcoin, I have zero doubt that governments will replace fiat with Bitcoin. We need to understand that Bitcoin is a complete financial system that can exist with current fiat based financial system.

[Kakmakr]

I do not know if the world is ready to sacrifice their "precious" Fiat currencies and to replace it with something that are not under their control. Every country value their local Fiat currencies and they do anything in their power to manipulate it's value to attract other countries to use it.

The US Dollar has lost most of it's value, but it is manipulated to reflect a image that it is very stable and also very strong. This is why a lot of countries are using it as a Global Reserve currency. 

[Wind_FURY]

I believe with Bitcoin still in its path to true price discovery, it’s impractical to currently use Bitcoin as a unit of account. Although that doesn’t stop it to be used as a Store of Value, and as a Medium of Exchange. Let the protocol run for another decade, then maybe Bitcoin will be stable enough to use as a Unit of Account.

[witcher_sense]

No, it wouldn't happen ever. There will fiat always either in paper money or digital cryptocurrency. Just imagine how we evaluate the Bitcoin price? It's always with fiat. So if there is no fiat how will you evaluate the value, means Bitcoin will be valueless. Then it will just like be a fiat.

The disappearance of fiat money wouldn't lead to the disappearance of value, but the price calculations would indeed become more complicated in this case. If we got rid of money as a medium of exchange, we would be heading back to the system of barter, a system where the price of one commodity is measured in terms of the others. It is an inconvenient and obsolete system with a lot of drawbacks, particularly, in this system, there is always a problem of double coincidence of wants.  Gold has emerged naturally from the system of barter as the most saleable commodity which was exchanged just for the sake of exchange and not consumption purposes. Consequently, the prices of other goods were represented in terms of gold but the value of these things was established before money appeared. If Bitcoin is to become new money, the prices of all commodities will be measured in bitcoin terms but bitcoin itself will be measured in terms of commodities. For example, the price of one bitcoin will be equal to ten kilograms of gold or several tons of eggs.