The link between Bitcoin and the economy

[Tellek Garing]

When we discussed the topic of Bitcoin and its decentralized nature and how it relates to the economy of the world, I lot of people seem to be confused about the place of Bitcoin in the economy.
First, we need to understand the nature of Bitcoin and also its legal tendency.
Bitcoin is a digital currency that is not controlled by any one individual or government that is why it is referred to as decentralized currency, secondly, Bitcoin is an asset just like gold that the reason most people adopt it for its economic benefits.

[1715510799]

1715510799

[Poker Player]

When we discussed the topic of Bitcoin and its decentralized nature and how it relates to the economy of the world, I lot of people seem to be confused about the place of Bitcoin in the economy.
First, we need to understand the nature of Bitcoin and also its legal tendency.
Bitcoin is a digital currency that is not controlled by any one individual or government that is why it is referred to as decentralized currency,

That's all well and good but I think all of us who have been on the forum for a while know that. If you were posting on another forum other than Bitcoin you would be informing them, here you are just telling us again what we already know.

secondly, Bitcoin is an asset just like gold that the reason most people adopt it for its economic benefits.

Yes, it is an asset, but there are people in the forum who defend that it is mainly a currency and that it is an asset is secondary, pooya87 for example is a fervent defender of it.

I for my part would say that although today most people who buy it do it as an asset, if you look at the number of transactions it is clear that it is used as a currency.

[Upgrade00]

secondly, Bitcoin is an asset just like gold that the reason most people adopt it for its economic benefits.

Most people adopt it for its speculative value and not economic benefits.

Bitcoin is a decentralized asset which is still at a very early stage in adoption,
Economy of any nation is; "the state of a country or region in terms of the production and consumption of goods and services and the supply of money." - Oxford dictionary. And it is determined by so many factors including government efficiency, fiscal policies, corruption, availability of resources (human and natural), nation's waelth etc.

In the general concept of an economy, Bitcoin is not significant now, and cannot affect that of a Nation besides being used by some individuals as a hedge. Maybe in a couple of years with now adoption, it would play a more significant role, for now however, it is simply a currency of the people without any intermediary.

[Charles-Tim]

When we discussed the topic of Bitcoin and its decentralized nature and how it relates to the economy of the world, I lot of people seem to be confused about the place of Bitcoin in the economy.

Not only some people, even some governments are confused. Some organizations are still even making research about it. What I can say is that bitcoin has made wealth possible for some people and I believe it will have good impact on the economy if the government regulate it appropriately.

Bitcoin is a digital currency that is not controlled by any one individual or government that is why it is referred to as decentralized currency

Bitcoin was created in a way it can not be controlled by any centralized body but many people are using custodial wallets and custodial exchanges. In this regard, people that owns the centralized wallet or exchange will have the private key of the addresses given to users, they have the full control and they can control and overide the control of their users.

Bitcoin is an asset just like gold that the reason most people adopt it for its economic benefits.

Bitcoin and gold are both assets but bitcoin has limited supply which is only 21 million, the reason it is more deflationary.

In the general concept of an economy, Bitcoin is not significant now, and cannot affect that of a Nation besides being used by some individuals as a hedge. Maybe in a couple of years with now adoption, it would play a more significant role, for now however, it is simply a currency of the people without any intermediary.

I do not know how significant bitcoin can help in this, but this can be indirectly linked to GDP. For example, I have some bitcoin some years ago, now it made me wealthy, I channel some of the money for business, like having a centralized exchange that the government are even benefitting from taxing my organization. There are many other ways bitcoin would have impacted on GDP.

[Mauser]

When it comes to Fiat money we all know there is a direct link between the economy of a country and its strength of the currency. A strong economy will also result in a strong currency, the local people can use their money to buy goods and international investors have confidence in the currency. But when the economy is falling than so is the currency. The government is likely issuing debt and printing money in an effort to help the economy which will weaken the currency even more.
When it comes to bitcoins we could argue that bitcoins are kind of a global currency, but not all countries in the world have the same effect on the world economy. Industrial nations have a much stronger influence, if the 3 largest economies would go into recession than so would the world economy. This doesn't necessary mean that bitcoins would crash too like the local fiat money. I believe that bitcoins have some independence atleast from the economy.

[palle11]

Bitcoin is not directly linked with the economy but it effect shows in the economy. Bitcoin is highly volatile and it convertion brings multiple fiat in the hands of hodlers and I think this increase investment and production. This creates good standard of living and increase liquidity in the system and a rise in GDP.

[mindrust]

There is a correlation obviously. It is mostly about the loose FED policy. The FED is too afraid to increase the interest rates to an appropriate level so there is too much cheap money. Cheap money is the bullets of a monkey with a machine gun. The monkey shoots everywhere. The money goes to stonkz, the money goes to commodities, it goes to real estate, to casinos and some of them inevitably goes to crypto.

[kaya11]

But the problem is the benefits you are talking for the common people that you are talking is only applicable to the rich people. Poor ones can't even afford a quarter of Bitcoin. Rich people buy it believing it would give back more to them. It's fundamentals is slowly losing and one day bitcoin might be just another story to be told.

[kryptqnick]

Whether Bitcoin is an asset depends on who you ask. And while it's largely used as an asset, it also has potential as a currency (unlike gold nowadays). There's also quite a big difference, IMO, between gold and Bitcoin in terms of what's expected from them. Gold is more of a store of value. It means that you already have wealth which you don't want to lose, and so you put it in gold and expect it to remain the same or perhaps increase a little. Bitcoin is very volatile, so putting wealth into it and expecting it to remain the same is probably not what most people do. Instead, they invest money, expecting some high profits, to become wealthier rather than remain wealthy.

[mardaed]

But the problem is the benefits you are talking for the common people that you are talking is only applicable to the rich people. Poor ones can't even afford a quarter of Bitcoin. Rich people buy it believing it would give back more to them. It's fundamentals is slowly losing and one day bitcoin might be just another story to be told.

Somehow, I agree and disagree with you. It is true that usually the rich are the ones who are enjoying the benefits being mentioned, but there are also common people who happen to get themselves the opportunity to have and hold alt coins then bitcoin. I think that my point here is that, when people start to acknowledge bitcoin as beneficial, and thereby for there survival and of the economy, they work they way to get it. And so, bitcoin will most probably be kept alive as long as there are dreamers.

[hyudien]

When we discussed the topic of Bitcoin and its decentralized nature and how it relates to the economy of the world, I lot of people seem to be confused about the place of Bitcoin in the economy.
First, we need to understand the nature of Bitcoin and also its legal tendency.
Bitcoin is a digital currency that is not controlled by any one individual or government that is why it is referred to as decentralized currency, secondly, Bitcoin is an asset just like gold that the reason most people adopt it for its economic benefits.

When it comes to Bitcoin relationship to the economy, there is only one answer, which is to be richer than anyone else and Bitcoin has it all to offer. I don't really care much about the concept, but the reality is now this is what's happening. Regardless of the main concept and purpose of Bitcoin. You can only see it in terms of increasing wealth. I'm not going to be too hypocritical about this.

Is not it? no matter how idealistic the concept is, in the end, it only wants to foster portfolio value.

[Silberman]

But the problem is the benefits you are talking for the common people that you are talking is only applicable to the rich people. Poor ones can't even afford a quarter of Bitcoin. Rich people buy it believing it would give back more to them. It's fundamentals is slowly losing and one day bitcoin might be just another story to be told.

You are only looking at bitcoin as an investment which is why you think there is such a risk but bitcoin is also going to help poor people as well, in many instances bitcoin is cheaper than remittance services and bank transfers, this means that family members which moved to other countries with better job prospects can send their family money for way cheaper fees, while at the same time it will give poor people the ability to receive payments for their products and services from all over the world as well, so as you can see everyone can benefit from bitcoin, which will make it relevant for the foreseeable future.

[ajanwalker]

When we discussed the topic of Bitcoin and its decentralized nature and how it relates to the economy of the world, I lot of people seem to be confused about the place of Bitcoin in the economy.
First, we need to understand the nature of Bitcoin and also its legal tendency.
Bitcoin is a digital currency that is not controlled by any one individual or government that is why it is referred to as decentralized currency, secondly, Bitcoin is an asset just like gold that the reason most people adopt it for its economic benefits.

I think Bitcoin is decentralized, but the people who stored bitcoin in the early days and are now called whales became the center of bitcoin. When leveraged transactions are involved, they sometimes take bitcoin up and down and play like a toy.

[Kakmakr]

Bitcoin is a currency, but it is not "legal tender" in a lot of countries, because some countries want to protect their own Fiat currencies from any competition. So these countries defined Bitcoin as a Commodity to prevent it from being used as legal tender.

We have some countries like El Salvador that are open-minded and they see the potential benefits from using Bitcoin as a currency and legal tender. (Example : Remittance from other countries to their country at a fraction of the cost that companies like MoneyGram and Western Union are charging their citizens)

[fiulpro]

I do think that it is very important to put bitcoins and cryptocurrencies in the perspective order and draw a demarcation line between the centralized and the decentali systems since at the end it's integrated: for sure but it's not essentially a part of it making it very resistance to the future ups and downs that might happen in the economy, if the US government collapses the bitcoins would be affected for sure but it would not just be able to bounce back up soon but it would not be affected that drastically as well, profits made using cryptocurrencies can definately benefit the government, taxes from the crypto gambling sites online are for sure generating good revenues, but I think the link is not that strong.

[teosanru]

When we discussed the topic of Bitcoin and its decentralized nature and how it relates to the economy of the world, I lot of people seem to be confused about the place of Bitcoin in the economy.
First, we need to understand the nature of Bitcoin and also its legal tendency.
Bitcoin is a digital currency that is not controlled by any one individual or government that is why it is referred to as decentralized currency, secondly, Bitcoin is an asset just like gold that the reason most people adopt it for its economic benefits.

Bitcoin is an asset like gold? Who said this? Bitcoin is a currency and in that way, you can refer to it as an asset but you can't really say that its an asset like gold, in fact, I feel the asset mentality behind bitcoin is one of the prime reasons why bitcoin is not able to go mainstream as a currency is because of the price behavior it has, one simply doesn't want to spend it as a currency because they know it's value would definitely increase tomorrow. Talking about the economic benefits it has, I see only one prime economic benefit which is that it won't cause any inflation unlike the other fiat currencies and it's decentralized which means, the folks who use it control it.

[Tellek Garing]

Bitcoin is an asset like gold? Who said this? Bitcoin is a currency and in that way, you can refer to it as an asset but you can't really say that its an asset like gold, in fact, I feel the asset mentality behind bitcoin is one of the prime reasons why bitcoin is not able to go mainstream as a currency is because of the price behavior it has, one simply doesn't want to spend it as a currency because they know it's value would definitely increase tomorrow. Talking about the economic benefits it has, I see only one prime economic benefit which is that it won't cause any inflation unlike the other fiat currencies and it's decentralized which means, the folks who use it control it.

Well I believe the major reason why Bitcoin has not gone mainstream is because of its decentralized nature and not to asset image, if the asset doesn't go mainstream how about gold which is an asset and not a currency but has gone mainstream because gold is a government-backed asset.

[naira]

Bitcoin can be an asset, it can be a currency, and it can also be like gold. It depends on us to see it in terms of the benefits taken. If it is an asset, it is a place to store value, which will increase in price from year to year, it will be very effective as an asset. If it is a currency, of course, other countries have used Bitcoin as a legal means of payment and can be used for any payment, such as in El Salvador. As for gold, that also doesn't matter as the scarcity nature of Bitcoin increases. The rarer the more expensive, that's how it is. There won't be too much fuss about Bitcoin's function in the eyes of all speculators, as long as it can improve financially.

Bitcoin is an asset like gold? Who said this? Bitcoin is a currency and in that way, you can refer to it as an asset but you can't really say that its an asset like gold

Because of the different points of view on Bitcoin we are used to finding. Is this your point of view? and that's the OP's point of view. All have the same functions and benefits as well as the same goal, namely as a financial solution.

[WillyAp]

Money goes into wealth storage.
The longer BTC climbs and has wealth stored over the years the more trust will Bitcoin get, same with other coins who have perdured. Notably LTC, Litecoin has better features in regards to transaction speed, count and is about 10 Years younger.

Due to btc's volatility its not suitable as a payment. Not even Satoshies are good for that. Also there LTC is better.

[Doell]

real trust in bitcoin ,making bitcoin very influential in the economy of individuals and governments ,the story of people who invest in bitcoin getting rich means their economy is getting better and Connect with the local government that used to be hard to pay taxes ,to become tax compliant for the government because of bitcoin ,I heard news about the taxation of a crypto exchange that really plays a role in helping the government in the economy too ,regardless of the perception between currency or digital assets ,bitcoin a very important role in the economy !