Could Bitcoin one day become the global reserve currency?

[Lucius]

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

When you're already writing about it, then at least provide information that will show us how much energy Bitcoin consumes globally? Is it 10%, maybe 5% or less than 1% of the total amount of electricity produced in the world?

- 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.

If the price of BTC was somehow stable, do you think there would be more investors or traders? It is precisely this volatility that attracts people, because haven't you heard stories about people who became millionaires with a few hundred or thousand dollars invested?

- 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.

From 1914 to today there have been two world wars, the Vietnam War, the Korean War, Chechnya, Iraq, the Balkans, Afghanistan, Syria, Libya, and now Ukraine. There were many more conflicts that I didn't mention, but I don't understand why you think that the last 100+ years are the "best in history"?

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

You are living in a big illusion, because the world as it is today will never accept Bitcoin or anything like it as a world reserve currency - nor was Bitcoin intended to become one.

[tjtonmoy]

Volatility is the main reason people are still trading and making money from it. So it is unlikely for Bitcoin to just get stable at some point. The price we see now is just a paired amount with dollar in order to easily understand the value of it. But if we keep that on the side, 1 Bitcoin will always be 1 Bitcoin. So it is possible for Bitcoin to become the global reserve currency if we can forget what it's worth by pairing it to other currency and accept it as an individual currency. That way we can truly call it a currency and people will be willing to take is for a reserve asset.

[Asiska02]

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?

The most significant factor that will deter companies from using bitcoin as a reserve currency is its volatility. I believe that those companies that are already using it as a reserve currency are doing so gladly because they have faith in the currency and the possibility of profiting from it in the future; they are simply following the trend but have a backup plan. Bitcoin will not be their sole reserve currency, but their investment with bitcoin will enable them to sell their services to their customers who are interested in partnering with them.

[lionheart78]

- 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.

If the price of BTC was somehow stable, do you think there would be more investors or traders? It is precisely this volatility that attracts people, because haven't you heard stories about people who became millionaires with a few hundred or thousand dollars invested?

And at the same time make merchants and other people who do not like will stay away from Bitcoin.  If Bitcoin becomes stable, it is obvious speculators will go away but investors will stay.  Company will take advantage of the stability of Bitcoin price and there is also a possibility of a merchant boom that will accept Bitcoin as a mode of payment. I believe there is always an opportunist in every kind of situation.  Whether Bitcoin is highly volatile or stable, people will adopt it.

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

You are living in a big illusion, because the world as it is today will never accept Bitcoin or anything like it as a world reserve currency - nor was Bitcoin intended to become one.

I agree Bitcoin is not intended or created to be a reserved currency, to support the statement it is stated in this article[1] that:

What is the purpose of bitcoin? Bitcoin was created as a way for people to send money over the internet. The digital currency was intended to provide an alternative payment system that would operate free of central control but otherwise be used just like traditional currencies.

[1] https://www.newscientist.com/definition/bitcoin/#:~:text=What%20is%20the%20purpose%20of,used%20just%20like%20traditional%20currencies.

[kawetsriyanto]

Volatility is the main reason people are still trading and making money from it. So it is unlikely for Bitcoin to just get stable at some point. The price we see now is just a paired amount with dollar in order to easily understand the value of it. But if we keep that on the side, 1 Bitcoin will always be 1 Bitcoin. So it is possible for Bitcoin to become the global reserve currency if we can forget what it's worth by pairing it to other currency and accept it as an individual currency. That way we can truly call it a currency and people will be willing to take is for a reserve asset.

Yep. People choose Bitcoin for their investment because Bitcoin price is volatile. If Bitcoin price is stable, I doubt people will be interested in Bitcoin for their future assets. So, the volatility in Bitcoin has its own advantage, it attracts people to have and hold it.

By the way, even if Bitcoin price becomes stable, I am not sure it will be a global reserve currency. There are many countries that still don't trust very well on Bitcoin. Some countries even ban Bitcoin because they assume it harms people. As long as there is no trust among the countries, it will be difficult for Bitcoin to be a global reserve currency.

[serjent05]

Volatility is the main reason people are still trading and making money from it. So it is unlikely for Bitcoin to just get stable at some point. The price we see now is just a paired amount with dollar in order to easily understand the value of it. But if we keep that on the side, 1 Bitcoin will always be 1 Bitcoin. So it is possible for Bitcoin to become the global reserve currency if we can forget what it's worth by pairing it to other currency and accept it as an individual currency. That way we can truly call it a currency and people will be willing to take is for a reserve asset.

Yep. People choose Bitcoin for their investment because Bitcoin price is volatile. If Bitcoin's price is stable, I doubt people will be interested in Bitcoin for their future assets. So, the volatility in Bitcoin has its own advantage, it attracts people to have and hold it.

Have you ever thought of bitcoin being a store of value?  A stable cryptocurrency can be one of the best stores of value and being one of the best stores of value, it attracts merchants and other people that intend to save their fortune.  Bitcoin will also be one of the best currencies that merchants can accept as a mode of payment because its value is stable.

By the way, even if Bitcoin price becomes stable, I am not sure it will be a global reserve currency. There are many countries that still don't trust very well on Bitcoin. Some countries even ban Bitcoin because they assume it harms people. As long as there is no trust among the countries, it will be difficult for Bitcoin to be a global reserve currency.

If Bitcoin is stable, the government will see it as a good alternative to fiat currency.  It is impossible for Bitcoin to be used as a global reserve because the majority of its coins are not held by a nation but only by a few individuals. 

[Faisal2202]

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

No doubt bitcoin has long list of pros but where is pros there is cons, like in your first statement, last year btc failed to resist against inflation, no doubts it frees us from going to bank ( but does it really happening) like we are all have no or less options to deposit and withdraw btc/usd pair without banks. Ahh, if you work for someone in exchange of btc that is another discussion.
Countries are run by governments and in each country there are more than one governments each with there own agendas and secrets and they do not want it to be seen by public and hide it. But if bitcoin becomes the global reserve ( currency to store value of money for country) then this will not become private anymore. anyone in the world can check the total reserves and accounts limited details that is holding the reserves of country. countries has many expenditures like (agencies) and that is something on which no one wants to compromise. so overall, nothing is safe in digital world until you or someone within the system do something stupid.
Now coming to your queries.
1. Every sector in the world like industry, production, consumption transportation etc consume high amount of energy, And only literate people care about consuming less energy, Bitcoin no doubt is using high energy for mining but as you may be aware mining of btc is near to an end which will eliminate your first query. And further many platforms are introducing green carbon slogan to eliminate the impact of high energy consumption or at least reduce it.
2. well in case of volatility, some people admire it and some not. because this volatility is the fundamental pillar of crypto from which investors and hodler can make passive income and can become millionaire over time. No doubt it scares traditional fiat users but ones they get familiar with the value of this volatility then they will also admire it. secondly, using btc for Reserves, we can analysis el-salvador country how much it will improve and how it will rise along the rise of bitcoin by riding on the rocket fueled with volatility.
3.Wars, no doubt has great impact on devaluation of currencies. wars not only effect btc but also caused devaluation of many currencies like, in world war 1 Germany printed more notes than reserves thus this causes inflation and devaluation of currency, Syrian currency also devalued in the war as the Vietnam currency devalued in war well there are many other examples. are there too. So overall, war is permanent and its impact is too. But btc has the potential to bear it. but idk maybe it has the potential to bear total electricity blackout in the world when aliens will come. hahah.

overall, btc has outperformed in the previous fuds, wars, pandemic etc and i think above mentioned three reasons might not become a hurdle for it to become reserve entity but governments like the developed one are never going to use it for reserves. only the developing and near to bankrupt countries might touch this plan in near future.

[Ngewex Yuk]

I think bitcoin will be difficult to become a reserve currency as long as there are no strong countries legalizing bitcoin, if a strong country officially legalizes bitcoin then bitcoin will be more secure, there are too many weaknesses in bitcoin but if it is legalized by a strong country there will certainly be many rules, for example price controls on exchanges so that bitcoin is more stable and will not be too volatile as it is today.

[Lucius]

And at the same time make merchants and other people who do not like will stay away from Bitcoin.  If Bitcoin becomes stable, it is obvious speculators will go away but investors will stay.  Company will take advantage of the stability of Bitcoin price and there is also a possibility of a merchant boom that will accept Bitcoin as a mode of payment. I believe there is always an opportunist in every kind of situation.  Whether Bitcoin is highly volatile or stable, people will adopt it.

This theory makes sense, because most people are interested in Bitcoin solely for the sake of profit, and they are most interested when the price is rising. If the volatility disappeared, the game would change completely, but somehow it doesn't seem to me that it would be positive for Bitcoin in the sense that it would eventually become accepted as a means of payment by more merchants.

They can do this even today by using payment processors that allow them to completely avoid volatility because the customer pays in BTC and they receive FIAT in their bank account. Therefore, I think that from the side of merchants, volatility is not a problem, but the real problem is that globally less than 5% of people are somehow involved in cryptocurrencies, and a very limited percentage uses Bitcoin as a currency.

In other words, the user base is so small that it does not motivate merchants to even think about offering such a payment method.

[speedy963]

In other words, the user base is so small that it does not motivate merchants to even think about offering such a payment method.

Exactly. I hate to say this but right now even if we say that lots of users now rely in online payments, there have been a few merchants that are accepting crypto as modes of payment.

Adding the fact that big companies that offer similar services like those small merchants aren't fully convinced on using cryptocurrencies, some countries too didn't implement crypto as a legal tender. If I were a merchant too, I wouldn't risk my startups by doing that. I would instead use my own money to buy crypto as a personal investment.

Crypto right now IMO is still at the early stages like a child ranging from 6-12 years old. Based on what we I can see on my country's economy, it is still not yet ready to adopt crypto, and is still on the stages that our country is slowly adopting to the new norm which greatly revolves around computer.

[Solosanz]

Maybe, just like how gold can become global reserve asset.

Bitcoin can become global reserve currency but it's just for small portion due to it's high volatility, there's no way Bitcoin will become global reserve currency for 100% because there's will be a country which disagree with this implementation.

[TheUltraElite]

I think bitcoin will be difficult to become a reserve currency as long as there are no strong countries legalizing bitcoin, if a strong country officially legalizes bitcoin then bitcoin will be more secure, there are too many weaknesses in bitcoin but if it is legalized by a strong country there will certainly be many rules, for example price controls on exchanges so that bitcoin is more stable and will not be too volatile as it is today.

A "Strong country" is a debated phrase to make, I believe you you those who have more influence on world economics than others. Now legalizing bitcoin is also an absurd term to use because it was never illegal to use it in most countries, but instead it was in "grey zone" that the government did not want to touch.

Volatility can one aspect but I believe acceptance is also low which is a bigger aspect than volatility. The number of people in a country using bitcoin is abysmally small if surveyed on a global scale, but I would be happy if proven wrong.

With a small userbase I hardly think governments actually want to make a move on bitcoin users. Hence our focus should be on bigger acceptance from no-coiners gradually to increase the userbase and then see how governments respond. Becoming a global reserve currency is a long shot statement to make and will not happen overnight.

[Cuenta Alternativa]

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

It has been debated for a long time and I think that perhaps a few years ago it was seen as more feasible, but now I think that its widespread use as a currency most people believe is not viable. What it is is the best store of value, so it is used and will continue to be used. So I think the OP is partly right on the reserve part but not on the currency part.

Today gold is not a currency, although it was in the past, and the reserve currency is instead the dollar. Bitcoin has emerged as an enhanced digital gold, which I increasingly believe will replace gold as a hedge.

[Doan9269]

If today we can have USD as the most reserved and globally recognized money, then having another with time is not what we can doubt for because all it requires is time for bitcoin to become the supreme currency everyone will always wanted to use all over the world, as we cannbow see currently that bitcoin is gaining this massive recognition that is irresistible by fiat or government because the world economy is turning into a digital runnings with bitcoin in this present dispensation.

[savetheFORUM]

This theory makes sense, because most people are interested in Bitcoin solely for the sake of profit, and they are most interested when the price is rising. If the volatility disappeared, the game would change completely, but somehow it doesn't seem to me that it would be positive for Bitcoin in the sense that it would eventually become accepted as a means of payment by more merchants.

They can do this even today by using payment processors that allow them to completely avoid volatility because the customer pays in BTC and they receive FIAT in their bank account. Therefore, I think that from the side of merchants, volatility is not a problem, but the real problem is that globally less than 5% of people are somehow involved in cryptocurrencies, and a very limited percentage uses Bitcoin as a currency.

In other words, the user base is so small that it does not motivate merchants to even think about offering such a payment method.

Even people who are not here just for the profit, could end up not caring about it because they would be basically doing something that is lacking the thing that made it worth it. Like for example I am not here just for the profits, I like bitcoin because it is a great currency and I work in the crypto world, there would both be a situation where there are less work available so I would probably be unemployed, but it would also be something I would cash out directly instead of keeping it in bitcoin as well.

So, it is quite important to not mistake bitcoin with anything else, it would be a shame if it was ever a stable thing and lacked the volatility it has today.

[TheGreatPython]

If today we can have USD as the most reserved and globally recognized money, then having another with time is not what we can doubt for because all it requires is time for bitcoin to become the supreme currency everyone will always wanted to use all over the world, as we cannbow see currently that bitcoin is gaining this massive recognition that is irresistible by fiat or government because the world economy is turning into a digital runnings with bitcoin in this present dispensation.

No matter how widespread Bitcoin's usage and advantages become, even if the whole world adopts Bitcoin and loves it, it would still be difficult for it to become a global reserve currency due to its volatile nature. I don't think that a country or countries would reserve their money in a currency that can decrease in value at any given time. That would be devastating. I know that it can also grow, but that's a different thing, and we need to see all the possible outcomes.

Bitcoin is not supposed to be used that way anyway, so we should let it be the way it is and let the world leverage it for things that fit its nature and that don't make it lose its integrity at all.

[GreenStox]

the main goal of satoshi may be that, but to achieve it there are so many problems.
and I don't think the world government or the world bank will stay silent.
I mean if they do accept bitcoin they have to see if it can benefit them otherwise they will continue to put up a fight.

[thecodebear]

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?

The energy consumption isn't a problem at all, its actually a very good thing and will be of great importance for Bitcoin in the future once people actually start to understand it. Volaitility is just part of anything that trades on an open market and it is still very early in Bitcoin's adoption, volatility will continue to go down over time, and it will be much lower once Bitcoin is more of a mainstream thing in say like 15-20 years. Third point have nothing to say, wars have nothing to do with Bitcoin succeeding or failing, people will want Bitcoin because it is very useful and supply capped.

So none of those problems prevent bitcoin at all. The first two just have bad optics at the moment, but mining is very good for society so when bitcoin education spreads people will finally start to not only accept mining is important for bitcoin but they will actually support it for mining's big benefits to society, and volatility will continue going down over time so people will stop freaking out about volatility, especially once they've been holding through one market cycle so that they are always in profit because volatility matters much less when you're in profit no matter what the price does.


Yes, I think it is inevitable that Bitcoin becomes the world's reserve currency. It's a farrrrrr stronger currency than the USD or any national currency. And because it doesn't belong to a single country every other country in the world is going to prefer it over the currency of a single country (like USD) being the reserve currency. It's just a matter of time. Adoption needs to spread much more and people, including politicians and bankers need to become educated on Bitcoin and view it as a normal and good thing, instead of as a scary, new, risky, confusing thing. It'll take many years, it'll take decades, but eventually Bitcoin is almost certain to be the world's reserve currency. I would expect by 2050 most nations will be holding a supply of Bitcoin in reserve.

[Semar Mesem]

Of course you can, the number of bitcoin users continues to increase and the decentralized system brought by bitcoin has proven successful, only in about 10 years it already has hundreds of millions of users, if one day it becomes the global reserve currency then the world economy will be stronger and there will be no chaos because of the currency war.

[South Park]

If today we can have USD as the most reserved and globally recognized money, then having another with time is not what we can doubt for because all it requires is time for bitcoin to become the supreme currency everyone will always wanted to use all over the world, as we cannbow see currently that bitcoin is gaining this massive recognition that is irresistible by fiat or government because the world economy is turning into a digital runnings with bitcoin in this present dispensation.

No matter how widespread Bitcoin's usage and advantages become, even if the whole world adopts Bitcoin and loves it, it would still be difficult for it to become a global reserve currency due to its volatile nature. I don't think that a country or countries would reserve their money in a currency that can decrease in value at any given time. That would be devastating. I know that it can also grow, but that's a different thing, and we need to see all the possible outcomes.

Bitcoin is not supposed to be used that way anyway, so we should let it be the way it is and let the world leverage it for things that fit its nature and that don't make it lose its integrity at all.

But do not you think that if bitcoin was so widely used and adopted then its volatility will decrease significantly? Bitcoin can still grow in price because the amount of people that use bitcoin is small compared to the whole population of the world, so the potential for growth is huge, but once that goes away and the number of people yet to adopt bitcoin diminishes then I do not see why some countries may decide to have some bitcoin on their reserves.