Was the coupling of Bitcoin to fiat a mistake?

[goldkingcoiner]

Bitcoin price is first and foremost measured in fiat, mainly the dollar. 

Bitcoin is bought and sold with fiat since the beginning. Was that a tragic misstep in the evolution of Bitcoin? Would we have it better if all governments outright banned the purchase/sale of BTC with fiat?

If we had a fiat-decoupled version of Bitcoin which could be traded for services and goods without a third party currency, how would that look? Obviously the government would have no power over people accepting BTC for their goods and services (other than intimidating people with punishments, if caught).

From my observations, the more the regulators go against Bitcoin, the more it evolves into what seems to be a liberated global currency. By my thinking, the rebellious nature of the Bitcoin community against the old, corrupt generation of money and its corrupt services (like banks) is what drives the evolution of Bitcoin. So why not let that nature loose?

In such a reality, I think the purchasing power of Bitcoin would see the same rise in value from its inevitable adoption but without the dumps caused by the broken fiat economy and stock market crashes.

1 BTC = 1 BTC

[franky1]

1BTC = 2000 min wage labour hours (no matter the countries fiat value)
imagine the effect that would have on arbitraging forex wallstreet taking the bitcoin path of opportunity to disrupt the forex rates to arbitrage cycle for profits

[sbrys]

But how would we able to get it otherwise ?

Humanity always prices everything, even things that shouldn't be sold/bought...

[DaveF]

It is probably helping BTC. Change is difficult. Large changes are even more difficult.
If you had to remove all ideas of fiat to BTC people would be giving much more resistance to using it.
Now they have a reference point that they have had since they understood what money is.

-Dave

[Accardo]

If we had a fiat-decoupled version of Bitcoin which could be traded for services and goods without a third party currency, how would that look? Obviously the government would have no power over people accepting BTC for their goods and services (other than intimidating people with punishments, if caught).

The idea here is good, but fiat plays a vital role in the business chain. The vendor accepts bitcoin, maybe a wholesaler, but the producer may not be a bitcoin trader. It brings forth a barrier to the business chain of such a vendor. The government will have no such power. However, they are always a means to cut side into other people's businesses, and the government is a part of such practice. Consider other valuable assets like gold, silver, and other country currencies being changed to fiat in different countries to ease the circulation of money. The peer2peer bitcoin traders that change bitcoin to fiat for-profits can't be erased from the market. I don't think such an idea will happen soon, as many people are involved in the market, including the same government you dodge.

[Jawhead999]

Most people more convenient to coupling Bitcoin price to fiat since fiat price is stable, even though it always inflate. At least fiat price doesn't change 10% in a day, the price is slowly decreased without anyone noticing it after a year or few years. If fiat price isn't stable, many people will panic and think the price is controlled by the government, they can do anything to control the price.

Coupling Bitcoin to fiat isn't a mistake, but we're not ready to see any price in Bitcoin due to high volatility.

[tadamichi]

Bitcoin price is first and foremost measured in fiat, mainly the dollar. 

This is to be expected since fiat is still the common unit of account for every good on earth. This can change, but before this Bitcoin needs to be an estabilished store of value and medium of exchange. Its just the natural evolution of money. Its only a practical unit of account when the world adopted it. We gotta be patient here.

Bitcoin is bought and sold with fiat since the beginning. Was that a tragic misstep in the evolution of Bitcoin?

Nope, its the process every good that wanna become money has to go trough. Most people wouldnt even have the chance to acquire Bitcoin otherwise, leading to no significant adoption. Theres also no practical benefit to account in Bitcoin right from the beginning, when only a tiny minority does it, so patience, this will change with adoption.

Would we have it better if all governments outright banned the purchase/sale of BTC with fiat?

They cant really ban it, they can prevent services to build around Bitcoin, but thats it. It would have probably slowed things down. All the bad these exchanges are doing is also a reason for more people to improve their security practices and a real world example of what centralization leads to. Its like an immune system that adapts, it becomes stronger if you challenge it regularly, so nah i dont think it wouldve been better.

If we had a fiat-decoupled version of Bitcoin which could be traded for services and goods without a third party currency, how would that look? Obviously the government would have no power over people accepting BTC for their goods and services (other than intimidating people with punishments, if caught).

We have this fiat-decoupled version already, because it never existed in the first place. The common money is still fiat so it doesnt have any advantage to not be able to get Bitcoin with it. Its about what people are accepting in exchange for Bitcoin voluntarily, this is always a individual choice, not a set rule. There would always be people accepting fiat in exchange for Bitcoin,so there will always be a market to exchange fiat and Bitcoin, this happened naturally and couldnt have been differently. In the future people can just use satoshis instead of fiat to price things, there wouldnt be much difference to how it works now.

In such a reality, I think the purchasing power of Bitcoin would see the same rise in value from its inevitable adoption but without the dumps caused by the broken fiat economy and stock market crashes.

We still live in that broken system, Bitcoin is designed in a way to use the weaknesses this system has, to its own advantages. Let the dumps happen, we will beat them at their own game, thats the only way. If we wanna beat them, theres really no way around the pain we have to go trough now.

[avikz]

1 BTC = 1 BTC  looks good theoretically but not practical at this moment. I don't know what will happen in the next 20 years, but for now, it is not really practical. At the backdrop of the current economic situation, what else can you do without coupling bitcoin with fiat? There's no alternatives available to determine the value of bitcoin.

If today I say, 1 gm gold = 1 gm gold, it would not make any sense! Same with bitcoin! It's no mistake, it's the correct thing to do to determine valuation.

[franky1]

alot of people thing that the btc:usd. is the only way bitcoin can work..
but thats just americans narrow mindset not understanding anything outside of USD

there are 7.5billion people that DO NOT use the USD. and so when they see btc:usd, they are personally then having to convert it into something they understand because USD is meaningless metric to them.

too many countries seeing their conversion then makes them see its out of their reach

over 1 billion people in africa converting a tx fee into usd and then to african native currency end up seeing the fee as being many hours of their minimum wage labour
when converting the BTC value of buying an asic to usd and then converting to native currency, again. out of reach its like 37 YEARS min wage salary to buy 1 asic in africa

however if we take away the americanised presence of btc and stole playing to the whims of america then people can see better utility

people (devs) foolishly think the bitcoin tx fee's are fine because its only 6 minutes of american min wage labour, they dont see that its 3 hours of min wage labour for africans or 20 minutes min labour for china or 3 hours for some people in india

they want americans to think bitcoin is fine and have the half of the planet on poverty line to use other networks saying it wont "cope" for them and pass them off with another network

we see it everyday now how some dont want small amounts spent on bitcoin. EG an american coffee amount bit no no for bitcoin. but that american coffee is a weeks groceries amount for billion of people..
yet some think bitcoin is fine for americans to use for their weekly grocery shop amount..

seem fair? nah.. but oh well
(i personally am wealthy and in a developed country(UK) where prices are similar to US.. but i can atleast understand how the unbanked/poor, unprivileged get treated/feel due to the disparages of the forex market and the elitism of american mindsets)

[BlackHatCoiner]

Bitcoin is bought and sold with fiat since the beginning. Was that a tragic misstep in the evolution of Bitcoin?

Do humans have another way to make the transition? The dominating currencies are fiat. A merchant who's supporting bitcoin by pricing their goods to it, has to somehow come to an agreement with the client. If both the client and the merchant get paid, buy goods, pay taxes, other dues etc, using fiat, they're reasonably going to use it as a measure.

Note that some online stores do price goods in bitcoin, regardless of the exchange rate. (e.g., lightning.store)

[Silberman]

Bitcoin price is first and foremost measured in fiat, mainly the dollar. 

Bitcoin is bought and sold with fiat since the beginning. Was that a tragic misstep in the evolution of Bitcoin? Would we have it better if all governments outright banned the purchase/sale of BTC with fiat?

If we had a fiat-decoupled version of Bitcoin which could be traded for services and goods without a third party currency, how would that look? Obviously the government would have no power over people accepting BTC for their goods and services (other than intimidating people with punishments, if caught).

From my observations, the more the regulators go against Bitcoin, the more it evolves into what seems to be a liberated global currency. By my thinking, the rebellious nature of the Bitcoin community against the old, corrupt generation of money and its corrupt services (like banks) is what drives the evolution of Bitcoin. So why not let that nature loose?

In such a reality, I think the purchasing power of Bitcoin would see the same rise in value from its inevitable adoption but without the dumps caused by the broken fiat economy and stock market crashes.

1 BTC = 1 BTC

This is not possible, everything has a price and that means everything, the concept of money is in fact similar to the units of reference we use to measure stuff, so in the same way we have inches or gallons in one system and centimeters and liters on another we use dollars, euros and bitcoin to measure not only the value of stuff but the value of those units of reference among themselves, as such it is impossible for bitcoin to not have a price itself unless all the other currencies were eliminated, which we know is not possible.

[sbrys]

The coupling is also creating the major headlines during a bull market so it also helped in the adoption of Bitcoin.

Without this a lot less people would care...

[franky1]

This is not possible, everything has a price and that means everything, the concept of money is in fact similar to the units of reference we use to measure stuff, so in the same way we have inches or gallons in one system and centimeters and liters on another we use dollars, euros and bitcoin to measure not only the value of stuff but the value of those units of reference among themselves, as such it is impossible for bitcoin to not have a price itself unless all the other currencies were eliminated, which we know is not possible.

its not a question about getting rid of "a price".. its a question of why does the price need to be dollar presented


just imagine if instead of forcing chinese, indian, african to measure btc against dollar.. the whole world seen btc at a moving 'price' based on seconds, minutes, hours of minimum wage.

where they all can compare it to their native costs. where by everyone can buy bitcoin for the same fair amount of time they work at min wage labour value.

it then becomes easier for each countries to then easily compare the value to their local costs.
and all have a fair access to bitcoin..

the negatives are then removed from peoples access to bitcoin due to foolishly high costs to africans but cheap costs to americans. because they would both be on par, the negatives then move to the disruption of forex where people arbitrage and disrupt the FOREX rate to make their profits by cycling between bitcoin->USD->native->bitcoin repeatedly unto a 1USD becomes the same number of minutes as a african native fiat minutes

EG

2000 hours is US $20k (states with $10 min wage)
2000 hours is indian 40,000rupees (20 rupees min wage/hour in Bihar (160 rupees a DAY(8 hours))

meaning an indian and american pay 2000 hours for bitcoin.. which would be fair.
..
however if you use the old outdated FOREX to express bitcoin in just USD
it converts that BTC is 1,584,173 rupees which is a 39X difference(39.6x more labour for an indian)

..
so just imagine if it was all expressed in hours..
where an indian can but it for 40,000rupee's sell it to an american for $20k use the $20k on forex to buy 1584173rupee, and then buy 39.6btc.. rinse and repeat

so just imagine if it was all expressed in hours..
where an american uses their $20k on forex to buy 1584173rupee, and then buy 39.6btc.. sell the btc to an american friend/exchange to get $792,086.5 and rinse and repeat

net result is that the USD forex price crashes and the indian rupee price rises until they find equilibrium where on the forex rate 1 indian min wage hour is the same forex rate as 1 american min wage hour.

meanwhile everyone around the world is benefiting. and only the wallstreet forex is getting disrupted and losing out

[amishmanish]

Anything has value, if we can buy something with it. Bitcoin can have value if we can buy something directly from it. Sadly initially there was no such means to do this and bitcoin was coupled with fiat currency. But now slowly many organizations have started to accept bitcoin and we will see that now bitcoin no longer will need coupling with fiat in future. As bitcoin is the future.

[aoluain]

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Yea I worked out my wage and it pretty much computes to what franky1 is saying.

My own take is that i'm not zure Bitcoins price is coupled to the US$ its just what the
majority quote the price as. I am in Europe and I never quote the Bitcoin price on here
in €'s but if I want to buy Bitcoin or need to sell some I refer to it in €'s.

Coinmarketcap has to option to change what currency you want to compare Bitcoin to.

on another note, a lot of people have yet to realise that if they have Bitcoin in a wallet, it doesnt
fluctuate up or down, its the FIAT value which so many focus on which does.

1 BTC = 1 BTC always

[ChrisPop]

Well, it needs to be purchased with something. Think how hard would have been for Bitcoin to get adopted if people were not able to purchase it using fiat. In that case Bitcoin could have only propagated through the old barter. If Bitcoin would have been banned from the beginning I'm sure its growth would have been much slower.

I mean just think about the amount of free publicity Bitcoin got because of the valuations it reached. If Bitcoin would have been banned right from its nascent phase it would have been mainly used in underground activities. I mean I don't know many average joes that would get involved in forbidden transactions. Maybe 1 in 10. It's simple math.

[coolcoinz]

Had you banned fiat exchanges, you'd have people doing it for various goods, deeds, IOUs. You'd have a debt trading market, marketplaces and so on, so people would still be trading, even if only on paper, but you'd be lacking a good measure of price. All physical things in this world, even space trips, human organs, sex, have value in fiat. You can't decouple it. If the US bans fiat trades you'll be bale to trade it for pesos or some other currency.

[jackg]

It's not abnormal for currencies to be coupled to each other though - there's a lot of examples I can think of that seem to follow proportionally (like the Swiss Franc, the pound sterling and the euro all follow similar trajectories based on each other). It's the whole reason most Western fiat countries have some level of coupling and are considered less volatile because of it.


Bitcoin decouples from the dollar, stocks and other currencies a lot and I think if you compared it on a longer timeframe it becomes obvious which one is growing in value against the other.

Fiat is the major onramp for crypto because its one of the easiest ways to trade and has the highest market liquidity.

[franky1]

Had you banned fiat exchanges, you'd have people doing it for various goods, deeds, IOUs. You'd have a debt trading market, marketplaces and so on, so people would still be trading, even if only on paper, but you'd be lacking a good measure of price. All physical things in this world, even space trips, human organs, sex, have value in fiat. You can't decouple it. If the US bans fiat trades you'll be bale to trade it for pesos or some other currency.

its not about the fiat changing to peso or some other currency if US banned it..


its that all exchanges follow one fiat currency.. and just deciding to change it to peso.. changes nothing..

by having bitcoin follow one currency and then after the fact have other currency just sheep convert to native currency changes nothing compared to how things are now..

you can spot this because if exchanges in mexico were actually measured in true peso. you would see their market rate DIFFER from dollar markets because the 'community' playing on the different markets have different sentiments and times they trade, meaning each countries orderbook on exchange would have DIFFERENT squiggly lines

EG  a UK market volume and amount of trade would quieten down at like 8pm uk time when everyone is going to bed or relaxing for the evening. where as new york its 3pm or 2pm in mexico at that exact same moment. so their volume and trade decisions are still active due to day time trading. so the exchanges should have different levels and different trade patterns if truly separate markets. yet they are not

instead the markets actually sheep follow each other too well. too coincidentally. which shows they all follow the US markets and react to the US market.

its the things like the sentiment that bitcoin fee's are fine and less then a coffee, due to the ignorance that the mind set of "less than a coffee" is an american scripted speech and not actually thinking about the cost in africa/india

by putting a fiat price on the market. creates bad judgement. bias judgement
however if the price was represented by something else that can easily convert to a native countries other measures, then that can be different.

which brings up the idea of measuring it in the form of min wage labour hours.

..
by measuring in dollars then makes other countries beholden/slaves to the FOREX rate..
however if bitcoin was measured in min wage hours. then bitcoin can disrupt the FOREX wall street.

using min wage labour hours grows a measure that is fair to all humans around the planet treating everyones labour and time equally. whereby they can use that equal opportunity to truly screw with forex for arbitrage opportunities of profit

but i guess thats just a too complicated idea for people to get their minds around

[GeorgeJohn]

Bitcoin price is first and foremost measured in fiat, mainly the dollar. 

Bitcoin is bought and sold with fiat since the beginning. Was that a tragic misstep in the evolution of Bitcoin? Would we have it better if all governments outright banned the purchase/sale of BTC with fiat?

without the Fiat currency Bitcoin won't have been relevant, so therefore you can different cryptocurrency especially bitcoin with fiat currency with little thing. That is while when some people give reference of bitcoin that it will dominate the existence of Fiat currency it always astonished me seriously. Even it's very clear that Bitcoin government on their own Way hate the existence of bitcoin so therefore their are restricting purchasing of bitcoin to eliminate it's adoption in nationwide.