Was the coupling of Bitcoin to fiat a mistake?

[hatshepsut93]

Ok, let's measure Bitcoin's value in Big Macs. You would still find that yesterday it was 1,000 Big Macs and today it's 700 Big Macs, and tomorrow it's 1100 Big Macs. Bitcoin doesn't crash because people choose to look at its price in USD or any other fiat currency, it crashes because it is a risky, unstable asset with a purely speculative value.

If all governments banned Bitcoin, it would only be a currency for darknet markets, so in some sense it would be closer to the cryptoanarchist utopia, but it would also mean zero chance of mass adoption.

[2stout]

Seeing that Bitcoin is future of money and it is here now, I don't really believe it could be any other way and it goes both ways- ex, how much fiat is my bitcoin worth or how much bitcoin can I buy with my fiat.  From here 'value' is established and the rest follows, i.e., barter, trade, commodities, etc.

[laurenB7742]

We need to find another stable asset to measure bitcoin's value if we do not couple bitcoin with fiat. With bitcoin's high volatility, the use of fiat to determine value at a time for exchange, I don't see anything serious here. Bitcoin and Fiat is just a combination to measure the value of an asset, it doesn't take away the real value of bitcoin so there is no problem.
Fiat is the measure of the value of everything in the world, and I don't think it will be broken or superseded any time soon.

[so98nn]

I am also follower of 1 BTC equals 1 BTC but the thing is you have to have measuring unit so that you can value something correctly. The dollar was standard in similar fashion english is universal language which "everyone understands". I think that's the simplest explanation on why we need bitcoin coupling with fiat. Same thing with gold, silver, oil, or basically any asset that is precious out there has value and is to be measured in the dollar to understand it on public common forum.

If we want to keep 1 BTC to 1 BTC then we will have to upgrade the prices of everything from dollar to bitcoins which seems to be impossible even after hundreds of years. So for the sake of simplicity we value it in dollars and its going well so far.

[crwth]

The critical thing about things like these is understanding the part where you need to stay away from fiat and conserve the value of your money. It's like Robert Kiyosaki is saying that "saving money" would make your money less valuable instead of investing it with the right assets, and Bitcoin can be that help. However, you still should accept the volatility of it its price movements.

It's better to understand that first before anything else.

[franky1]

The dollar was standard in similar fashion english is universal language which "everyone understands".

english is only spoken by a few hundred million
there are other languages spoken by BILLIONS

dollar is only used by a few hundred million
there are other currencies used by BILLIONS

english/dollar is only treated as universal  by those within the few hundred millions that think THEY are the elite speaking on behalf of the world..
.. meanwhile the rest of the world are still wondering "what makes them think they are so special"

once you manage to get on a plane and see different cultures outside of the elitist box and have conversations with people outside the elite minority and speak to the common majority. you get a different prospective.

try it

P.S.. im british english and even i sometimes mistakenly get pulled into conversations of speaking in dollar format(instead of pounds) but i do wake up a few times and also see the prospective of those outside of the dollar mindset. .. yes i admit i have coupled myself many times into the dollarisation of bitcoin when talking about it instead of sticking to my native tongue of pounds.. but wouldnt it be great if bitcoin just never was dollarized. and instead measured against something else like labour hours which is more fair measure for ALL countries

[Poker Player]

I am also follower of 1 BTC equals 1 BTC but the thing is you have to have measuring unit so that you can value something correctly.

1 Bitcoin is 1 Bitcoin but having 1 Bitcoin in 2010 has nothing to do with having 1 Bitcoin today. Let's see if we put things in perspective. That tautology strikes me more as a wishful thinking mantra rather than a description of reality.

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).

As much as the community would not want to make an equalization between Bitcoin and fiat currencies, nothing would stop the government from doing so. Imagine you sell something worth 0.1 Bitcoin. To tax you the government would do the fiat equivalence, currently about $2k.

[franky1]

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).

As much as the community would not want to make an equalization between Bitcoin and fiat currencies, nothing would stop the government from doing so. Imagine you sell something worth 0.1 Bitcoin. To tax you the government would do the fiat equivalence, currently about $2k.

nothing stops them
tax is normally a % based thing. so its easy to convert at any measure

if we measured fairly for the world btc as 1btc=2000minwage hours.. where 0.1=200hours*
then a government with a 10% income tax would be 20 hours.. so you simply look at the min wage fiat rate of min wage and work out the 20 hours and pay that in fiat

*not suggesting fix bitcoin market to 2000 hours forever im saying instead of $ and cent which change per order. im saying seconds, minutes and hours that change per order

[Argoo]

The price of bitcoin is measured in fiat and there are simply no other more convenient options. Cryptocurrency can be measured in any way - in gold, in any commodity, for example, horses. Imagine, we would say that one bitcoin is valued, for example, at 56 horses, or 1200 chickens. Would that be convenient? Of course not. We would still evaluate in that dimension what would be convenient for us and what the whole world uses. So don't reinvent the wheel.

[kryptqnick]

I don't see it as a problem because to me it's just a reference point. The value of dollar is commonly known because it's basically acting like the world's reserve currency. So, for instance, the value of local fiat in various countries, including mine, is often measured against USD because it's presumed to be stable enough for this purpose. Now, lately, the USD is not as stable as it used to be, which creates an issue. $100 in July of 2022 is not the same as $100 a year ago, not in terms of purchasing power. So when measuring Bitcoin in dollar, we forget to account for that. But given BTC's very high volatility and usage all over the world, we need some sort of estimate that would help understand what you can buy for 1 BTC today, what you could buy 2 years ago, and what you could buy a month ago. It would be very inconvenient, at this level of volatility, to rely solely on BTC and get used to extreme price changes over short periods of time.

[goldkingcoiner]

Ok, let's measure Bitcoin's value in Big Macs. You would still find that yesterday it was 1,000 Big Macs and today it's 700 Big Macs, and tomorrow it's 1100 Big Macs. Bitcoin doesn't crash because people choose to look at its price in USD or any other fiat currency, it crashes because it is a risky, unstable asset with a purely speculative value.

If all governments banned Bitcoin, it would only be a currency for darknet markets, so in some sense it would be closer to the cryptoanarchist utopia, but it would also mean zero chance of mass adoption.

The price manipulation from the governments side is a huge force in the inflation of fiat. A big mac may be worth some amount of money but that price will rise the more the government prints money, making the money already in circulation more worthless. And history shows us that deflation is not in the books when it comes to fiat and the government that controls it. Why? Because it is not profitable. Slowly extorting money out of the people, thats profitable. And if you do it slowly enough nobody asks questions. Of course supply and demand play a huge role even if fiat did not exist, but if we replaced fiat with Bitcoin, that artificial price increase of the Bigmac would not happen.

Im just hoping fiat gets replaced by Bitcoin sooner than later.

[franky1]

I don't see it as a problem because to me it's just a reference point. The value of dollar is commonly known because it's basically acting like the world's reserve currency.

but the big picture question is.. why do we.. outside the fiat system choose to re-enforce the fantasy that the US dollar should remain the reserve currency

dollar is american. used by 320m population.. yet other countries with higher population use other currencies..
meaning other currencies are MORE POPULAR.. yet we are deceived and told the US dollar is the popular one

EG the chinese Yuan is use by over 1.3billion people meaning 3-4x more popular currency

also by measuring against the dollar where everything is then priced in images of americanised costs.. we then start pandering to the elitism that bitcoin transaction fee's are justifiable because we are then measuring them against a price of a bigmac/coffee (affordable in "AMERICA") but totally ignoring the BILLIONS of people elsewhere that see the fee as being HOURS of min wage labour
even things like the ASIC costs get measured in btc that then compare to US living costs. where an ASIC is sold at a reasonable 6 month min wage salary(in america).. where as for BILLIONS of people its their whole working life career cost to buy just 1 asic

seems too many want to pander and not cause disruption and just re-enforce the mindset that the US fiat is the world reserve. rather than trying to disrupt it by messing with wall street fiat rates to kill off the US from its top place compared to other countries native rates on forex/world bank rankings

[Flexystar]

I don’t think it was mistake at all. Otherwise how would I known how much I am buying or whats the value for the same. 
Being common user of bitcoin i don’t think much about these short problems. In fact this monetary system is just perfect because it tells you how much bitcoin costs in every currency available out there. Everyone love to see its price in their own currency obviously for ease of user.

[Minecache]

Im just hoping fiat gets replaced by Bitcoin sooner than later.

What is your opinion of this happening, I don't think it will happen even if it takes hundreds of years. Our daily lives still require fiat even though it has its downsides and cannot be compared with bitcoin. I wouldn't be able to use bitcoin for a quick breakfast or takeaway coffee because of bitcoin's transaction costs and confirmation time. It would make me miss the express train to the office, but with fiat it would be more convenient in this situation.

[goldkingcoiner]

Im just hoping fiat gets replaced by Bitcoin sooner than later.

What is your opinion of this happening, I don't think it will happen even if it takes hundreds of years. Our daily lives still require fiat even though it has its downsides and cannot be compared with bitcoin. I wouldn't be able to use bitcoin for a quick breakfast or takeaway coffee because of bitcoin's transaction costs and confirmation time. It would make me miss the express train to the office, but with fiat it would be more convenient in this situation.

I think fiat will decouple itself sooner or later from Bitcoin. Just like Blockbuster went out of business from one day to the other as it became clearer and clearer that streaming movies was the future. Redundancy makes itself known early on. But people do tend to hang on to old technology out of habit and nostalgia, if nothing else. Same goes for fiat. Its a redundant old version of money and is currently being replaced. But seeing as the entire world needs to participate in this change, it might take longer for people to see the bigger picture of blockchain technology and especially Bitcoin.

[Bambozled]

Bitcoin is relevant due to fiat currency and is always referred to in the terms of fiat currency. Though I am not sure whether bitcoin will replace fiat, I hope that oneday bitcoin is used parallel to the fiat currency.

[savetheFORUM]

I don’t think it was mistake at all. Otherwise how would I known how much I am buying or whats the value for the same. 
Being common user of bitcoin i don’t think much about these short problems. In fact this monetary system is just perfect because it tells you how much bitcoin costs in every currency available out there. Everyone love to see its price in their own currency obviously for ease of user.

Irrespective of the differences people try to put up between fiat and Bitcoin, it is very necessary that we acknowledge the fact that fiat is in one or the other the back bone of Bitcoin in terms of the value associated with it. Just as a you said here, how would you know how much you’re buying 1 BTC for? If the coupling was not in place. So, in conclusion, there’s no mistake whatsoever about that cordial relationship between the two.

[yhiaali3]

This is not going to happen at the moment, unless we get rid of the fiat mentality or all governments in the world accept bitcoin as a global form of payment, people are giving fiat value, we need to change this.
The problem is not the dollar in particular. The problem is the problem of the banking system that gave the dollar a value when it is actually a worthless piece of paper. In the old days, people exchanged food or work for gold. There was no such thing as “fiat” or paper money.
I think in the future we will return to a system like this where people pay bitcoins for goods or for work. But replacing any old system with a new one takes patience and a lot of time.

[tbterryboy]

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?

It wasn't because how can they be able measure the value of bitcoin? And the reason why btc value rose is because someone buys it using their fiat. The reason why bitcoin is created is for us to have an alternative to the existing currencies and not because it was a replacement to all of them so it's fine if btc can work together with other payment methods.

It is still possible to obtain a bitcoin without using a fiat. You can mine it, get in faucets, or work for someone else and prefer btc as payment. You can also spend your bitcoin directly on almost anything so there is no need for you to sell your btc for fiat if you are allergic to it.

[Vaskiy]

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?

It wasn't because how can they be able measure the value of bitcoin? And the reason why btc value rose is because someone buys it using their fiat. The reason why bitcoin is created is for us to have an alternative to the existing currencies and not because it was a replacement to all of them so it's fine if btc can work together with other payment methods.

It is still possible to obtain a bitcoin without using a fiat. You can mine it, get in faucets, or work for someone else and prefer btc as payment. You can also spend your bitcoin directly on almost anything so there is no need for you to sell your btc for fiat if you are allergic to it.

What you say is correct, but think of bitcoin being valued. Each Satoshi equals certain amount of USD in value or valued against some other fiat currency. Everyone can't mine, and when buying we're in need of using the fiat value. Right now is it possible to value bitcoin without USD. If so, bitcoin could've got even more usage and growth.