Could Bitcoin one day become the global reserve currency?

[Spisalen]

Bitcoin is a technology that makes our life easier. It does not melt in the face of inflation like fiat currencies. It frees us from the bondage of banks, as it allows us to transfer money without the need for third parties. It has great features.

- However, despite being a new technology, it has very high energy consumption. However, everyone would like it to consume less energy.

- Also, it has been known and traded for years but still has very high volatility. With this appearance, it scares new investors. Because everyone expected it to have a more balanced price performance.

- World history is full of wars. Perhaps we are living through one of the best periods in history. But because of us homosapiens, our world is very prone to chaos. Coins that do not have an armed force behind them, such as Bitcoin, may be a little unlucky in this regard.

I think these three problems may not be solved and these three problems may prevent bitcoin from being a reserve currency.

What do you think about the subject? Can you share some enlightening information for me?

[Nwada001]

There are already companies that keep bitcoin as reserves; in time, banks will also have to adopt this since they can't beat the system and will have to join it.
Check out the list of companies using Bitcoin as reserves; it might be outdated somehow, as I believe companies like Tasla might have sold out some of their Bitcoin reserves.

[dimonstration]

There are already companies that keep bitcoin as reserves; in time, banks will also have to adopt this since they can't beat the system and will have to join it.
Check out the list of companies using Bitcoin as reserves; it might be outdated somehow, as I believe companies like Tasla might have sold out some of their Bitcoin reserves.

Surprisingly, some of the companies that on the list is already file bankruptcy like Voyager while Tesla recently announced that they are already sold their Bitcoin holdings.

I think the OP pertain the reserve currency of country that holds by the central bank and not as a reserved balance of a corporate which the list all about.

@OP, The volatility of Bitcoin will always be the problem on this idea. A reserve price shouldn’t volatile or else it will cause havoc in the economy.

[Spisalen]

I think the OP pertain the reserve currency of country that holds by the central bank and not as a reserved balance of a corporate which the list all about.

Yes. I edited the title to be more clear. Thank you for the help.

[coupable]

There are already companies that use Bitcoin as a stable reserve in the long term, despite all the technical issues that may make such a decision risky. But if viewed in general, it is difficult to believe that Bitcoin can compensate for the rest of the reserves used by the world. And if he is able to replace fiat money, especially the dollar, he will not be able to replace gold, since gold is a precious metal and a store of value. As for the dollar, it will expire if the world decides to end its use as a reserve.

[bangjoe]

I think it might happen but we need quite a long time because if the FIAT bankers are always provided with their place by the ruling government then the resistance and bad sentiment towards bitcoin will grow. In terms of value there must be something called recognition from one of the parties who has power and thinks that it is important. Just like the dollar and gold, they have always been the country's foreign exchange because the government recognizes the power behind the dollar and is almost like gold because of "assumption & trust".

In terms of energy consumption, price volatility, and sensitivity if chaos occurs it is a very difficult thing to control, in terms of energy it is very likely that we can still develop it and reduce the energy used, but in terms of volatility it will be very vulnerable to security. state finances because bitcoin is very sensitive to bad news.

[cabron]

The volatility makes it not suitable for a global reserve currency. You said it yourself. There is no currency today that is backed by gold which is probably a superpower like the US or China will have to race to that point in backing thier stablecoin with gold to be a global reserve currency. 

A global reserve currency has to be backed by a commodity. There were some influencers discussing this and their poll result was that the Yuan will highly likely be the reserve soon.

[kryptqnick]

High energy consumption is true, but there are lots of other things consuming energy and we, as a human society, are generally consuming more and more energy, so I wouldn't count is as a big disadvantage of Bitcoin per se. As for the high volatility, I disagree that it scares investors, since it's the volatility that gives a chance of making great profits with Bitcoin. Without volatility, Bitcoin wouldn't be of interest to investors, and that's even more true for investors. The third point about not having an army to support Bitcoin evades me a bit, but I suppose an argument could be made out of it based on the global reserve currency belonging to a country that has a strong economy and military force.
I believe that Bitcoin's volatility is an issue for it being a global reserve currency (but not as much as issue to Bitcoin traders and hodlers), and so is the lack of a strong authority that would be perceived as a reliable force that would ensure the stability of the currency. But maybe it's not a problem that Bitcoin isn't a big global reserve currency, as it can be many other things while also having some appeal as something that no government and no country in the world can control.

[Smartprofit]

Bitcoin is a technology that makes our life easier. It does not melt in the face of inflation like fiat currencies. It frees us from the bondage of banks, as it allows us to transfer money without the need for third parties. It has great features.

- However, despite being a new technology, it has very high energy consumption. However, everyone would like it to consume less energy.

- Also, it has been known and traded for years but still has very high volatility. With this appearance, it scares new investors. Because everyone expected it to have a more balanced price performance.

- World history is full of wars. Perhaps we are living through one of the best periods in history. But because of us homosapiens, our world is very prone to chaos. Coins that do not have an armed force behind them, such as Bitcoin, may be a little unlucky in this regard.

I think these three problems may not be solved and these three problems may prevent bitcoin from being a reserve currency.

What do you think about the subject? Can you share some enlightening information for me?

Bitcoin, in my opinion, is an ideal reserve asset to be placed in the gold and foreign exchange reserves of all countries. 

The fact that he is not associated with any one superpower (for example, the United States or China), in my opinion, is more of an advantage, not a disadvantage. 

Yes, bitcoin is an energy currency and the first cryptocurrency needs a lot of electricity to operate.  But this is also not a disadvantage.  This expenditure of energy makes Bitcoin a unique and valuable asset. 

The central banks of all countries form gold and foreign exchange reserves.  I believe that in the near future, there will be bitcoin (digital gold) in the reserves of central banks. 

Bitcoin is very convenient for external audit because its blockchain is transparent to an external observer.  In fact, it is an ideal reserve asset!  It perfectly solves the problem of lack of trust between different states.

[teosanru]

Bitcoin is a technology that makes our life easier. It does not melt in the face of inflation like fiat currencies. It frees us from the bondage of banks, as it allows us to transfer money without the need for third parties. It has great features.

- However, despite being a new technology, it has very high energy consumption. However, everyone would like it to consume less energy.

- Also, it has been known and traded for years but still has very high volatility. With this appearance, it scares new investors. Because everyone expected it to have a more balanced price performance.

- World history is full of wars. Perhaps we are living through one of the best periods in history. But because of us homosapiens, our world is very prone to chaos. Coins that do not have an armed force behind them, such as Bitcoin, may be a little unlucky in this regard.

I think these three problems may not be solved and these three problems may prevent bitcoin from being a reserve currency.

What do you think about the subject? Can you share some enlightening information for me?

Nope. Problem is that our world is now way past the time of reserve currency. These days no country wants to get into this mess of having a reserve currency because they want to print as much money as possible without any restraint. The reserve currency puts that restraint. So it's not the problem with bitcoin why it can't be a reserve currency but the problem with the currency system itself which will stop bitcoin from becoming so. It cannot even be a global trade currency due to the exchange costs involved to fiat and it's volatility.

[South Park]

The volatility makes it not suitable for a global reserve currency. You said it yourself. There is no currency today that is backed by gold which is probably a superpower like the US or China will have to race to that point in backing thier stablecoin with gold to be a global reserve currency. 

A global reserve currency has to be backed by a commodity. There were some influencers discussing this and their poll result was that the Yuan will highly likely be the reserve soon.

But will a currency backed by gold actually become the world reserve currency again? Before the fiat system was put in place central banks kept gold as their reserves, but after WWI and WWII economists realized the US had most of the reserves of gold around the world and the gold standard will be impossible to restore, so they stored the US dollar thinking it was as good as gold, but then during the Vietnam war the US printed a lot of money and this forced them to stop redeeming gold to other countries and finally the fiat system was created, so a very specific set of circumstances needed to happen for the economic system being the way it is, and I do not think they will repeat themselves so the Yuan can reach that status.

[Flexystar]

Some companies are using it as stable reserve? I must need to check in what sense everyone is talking here when they say “stable”. Most of those companies already got their bank accounts wiped up due to bankruptcy.

Bitcoin is not stable asset. Bitcoin by its very nature is highly unstable or volatile asset. It can’t have fixed price today, tomorrow or anywhere in the near future. It’s supply is getting released slowly however adoption is changing constantly. That can either pump the price but it could also go down if government influences regarding its ban/regulations etc came to effect. Now none of this is fixed and that makes it even dangerous for bitcoin to remain stable in long terms. That’s why it can’t have such Reserve status for sure.

[Zilon]

- However, despite being a new technology, it has very high energy consumption. However, everyone would like it to consume less energy.

Because it requires POW to remain decentralised, energy consumption will not be less. However LN which is done off the blockchain can be a good way to lessen energy consumption but yet it is not user friendly to all.

- Also, it has been known and traded for years but still has very high volatility. With this appearance, it scares new investors. Because everyone expected it to have a more balanced price performance.

It is the same activities of other new investors added to demand and supply including users sentiments and government regulation that keeps the price always in volatile state. A balanced price might never be possible because more people are waiting to take profit from every move Bitcoin makes.

- World history is full of wars. Perhaps we are living through one of the best periods in history. But because of us homosapiens, our world is very prone to chaos. Coins that do not have an armed force behind them, such as Bitcoin, may be a little unlucky in this regard.

I think these three problems may not be solved and these three problems may prevent bitcoin from being a reserve currency.

I think if there is an outbreak of war as long as the internet still exists it will even be more safer to own Bitcoin because it will be more accounted for  as each coin is only spent when the private key is known as compared to when the financial institutions get trusted to preserve the same fund.

[panganib999]

Bitcoin as it stands today is being used by a lot of companies back and forth as a reserve currency, so the possibility of it becoming the global reserve currency is high. add to this the fact that it is immutable and is ever-deflating in value which means it's not vulnerable against impermanent loss and inflation, making it a top-tier candidate for being a powerful currency and a reserve currency as well in the future. One thing that just gives it trouble is the fact that not a lot of people are aware of its existence, as well as the fact that there is still some semblance of speculation in its valuation, which could steer people away from it upon finding out. at the end of the day, the more people use and recognize it the more it will penetrate the mainstream. So if you want bitcoin to be used casually by everyone you gotta make the effort of spreading the word.

[crzy]

There are already companies that keep bitcoin as reserves; in time, banks will also have to adopt this since they can't beat the system and will have to join it.
Check out the list of companies using Bitcoin as reserves; it might be outdated somehow, as I believe companies like Tasla might have sold out some of their Bitcoin reserves.

This could be the situation in the future as many companies already started to work with this,
We know that fiat currency are being controlled by the government and being manipulated, if you hold too much of this the government will always have the control over you. There’s a huge chance for Bitcoin to be one of the global reserve, though my only concern here is that those companies will become whales and that could also affect the cryptomarket, especially when it comes to price manipulation.

[lionheart78]

There is a possibility but with the high volatility of Bitcoin, only brave CEO who can take the risks will be the ones making it a reserve currency.  Those who have seen how those companies got bankrupt in making Bitcoin a reserve currency during bear market will be dissuaded to use Bitcoin as a reserve currency.

I think Bitcoin is more of an alternative currency than a reserve currency because countries how they see Bitcoin atm will not take a highly volatile currency that can crash anytime as their reserve currency.  For them, stability is way more important that the possible surge in price.

[Hydrogen]

What do you think about the subject? Can you share some enlightening information for me?

The "can bitcoin become a global reserve currency" discussion has been had many times. It has simply taken other forms.

Some believe governments should regulate and control assets like global reserve currencies.

Others throughout history have said it is a bad idea for politicians to control the money printing machine. They say mints and other critical aspects of monetary policy and the economy should be independently owned and operated to prevent political conflict of interest.

Perhaps in the future global reserve currencies will follow a similar format. Where they do not fall under the direct control of politicians. I certainly would not mind it. I wonder how others would feel.

[Oceat]

What you said and asked is a very complicated things since Bitcoin and fiat should coexist and not the other way around. You can't just use crypto currency when there's a war because it might affect the internet connectivity during transaction and fiat on the other hand is a must to some but it's useless when there's a war because all establishment are closed. Therefore, there only way of making things to work is through banks and I don't think the government would like to use Bitcoin as a reserve currency for their emergency since there hasn't any single entities owning Bitcoin and therefore a use of third-party to get involved is a must if they wishes to use Bitcoin just like how banks work.

[Ozero]

There are already companies that keep bitcoin as reserves; in time, banks will also have to adopt this since they can't beat the system and will have to join it.
Check out the list of companies using Bitcoin as reserves; it might be outdated somehow, as I believe companies like Tasla might have sold out some of their Bitcoin reserves.

It is not at all necessary for banks to join and use cryptocurrency if they cannot beat it. The banking system is a part of state power, and states always use such leverage as regulation for undesirable processes. By regulating the circulation of cryptocurrencies, states can practically achieve any effect. Banks use everything from cryptocurrency that is beneficial to them to increase the efficiency of their fiat system, including they, like the state as a whole, use blockchain technology. But they will not use bitcoin or another decentralized cryptocurrency as a reserve currency, as this is not acceptable to strengthen their fiat. Commercial structures, individuals can and do do this, but this will not affect the state banking system in any way.

[Bestdss]

Bitcoin will hardly topple the dollar or other major central bank-issued currencies, but its technology will change how we conduct payments, banking and other financial transactions. These changes will bring many benefits although there are significant downsides as well.