If bitcoin ever goes mainstream

[Trading]

If bitcoin ever goes mainstream it will surely ruin the lifes of all the ones invested in fiat (see https://bitcointalk.org/index.php?topic=180798.0). Gresham's Law will destroy their fiat savings, since everyone will want the stronger bitcoin and will dump fiat, devaluating it. We'll see it happen first in the troubled economies, with high inflation and generalized suspicion on governmental money because of past problems.

And I have little doubt that bitcoin won't bring any equality, on the contrary. It will make us bitcoiners rich, but it will be at the expenses of fiat holders.

Because I doubt bitcoin will bring much prosperity, since it will establish a deflationary monetary system.
At best, Bitcoin will have a fixed amount. In reality, there will be a progressive lower amount of bitcoins, since many people will lose access to their bitcoins, because of lost passwords or hardware problems. But the economy will be growing, so that will push the value of each bitcoin higher. Thus, it will create deflation in bitcoin terms. Deflation is very damaging to the economy.

But maybe it will be possible to minimize those deflationary effects:

a) Commercial banks will adopt a bitcoin fractional reserve system, lending bitcoins with only partial support on their holdings. That will allow an artificial (banking) expansion of the amount of bitcoins, thanks to the so-called banking money multiplier.
But since it will be hard to keep a trustworthy insurance of deposits (the government won't have enough bitcoins for that and can't create them), the system will be much more susceptible to runs.
And the interest will have to be high, because most people will prefer to have the bitcoins in their own wallets. So, forget about low interest rates. Well, high real interest rates (aggravated by potential deflation) can ruin any economy, since they thwart many productive investment based on credit.

b) It also might be created a bitcoin pattern, with governments printing money freely convertible in bitcoins. But I can see already the runs on the government on times of crises.

How will the central bank in depressions stimulate the economy?
It won't be possible to do any quantitative easing. Borrowing bitcoins to lend them at cheaper interest rates to the commercial banks won't be cheap.

How will the Government control massive tax evasion, especially if the anonymity of bitcoin improves?  
They will find a way, nothing has destroyed the State in more than 13 thousand years of hierarchical societies. Bitcoin won't be able to do it. It seems we will be subject to intense control of our use of the Internet in order to track our earnings and spending of bitcoins. Some we'll be able to evade it. But the majority won't.

Will the volatility of bitcoin ever end?
The increase of its users will keep bitcoin's price going up. However, because supply and demand is controlled by human perceptions and emotions, after a huge boom in price it will always come a bust. Every overshooting of the price will be followed by a general perception that the price increased too fast and, consequently, by a drop.
For volatility to end, it would be necessary a general adoption of bitcoin that would limit in percentual terms further increases of new users taking in account the already large numbers of users. Currently, since the number of users is relatively low, it's easy to see its numbers increase for more than 30% in a short period. But since the numbers of bitcoin are limited (and the current rate of increase is relatively small and it will be again limited in 2016), the ending of volatility would also require or a stagnant GDP or a fractional reserve system based on bitcoin that would allow its banking numbers to artificially increase side by side with GDP. That won't happen for years. Volatility is here to stay for long.

Will this scenario be the future?
It's impossible to say. But bitcoin seems to have already a too strong standing to fade away on it own.
Another better alt coin might be a stronger obstacle than fiat. But bitcoin can always adopt any improvements.

Can governments still destroy it?
An international coordinated effort against the main exchanges and sites could indeed hurt heavily bitcoin. Even our own wallets are susceptible to attacks by virus/worms (remember Stuxnet?) and the network can also be affected. Access to it can be blocked by ISPs at governmental command. Many could evade these blocks, but the major part of the bitcoiners would give up, taking in account also the risk of sanctions. That indeed would spook major investors.
This can still happen and it will happen on troubled economies. The outcome is anyone's guess, it would depend on governmental coordination and level of effort. Governments lost similar wars (drugs, alcohol, prostitution), but bitcoin is an easier target than these activities. It's not a surprise that, besides scams, governmental repression has been the main negative driver of price.

What would be the consequences of this massive adoption over the price?
I can't even imagine what would be the price of bitcoin. Forget about all the low previsions you read before.


But the genie is out of the bottle. There is nothing we can do, except tell about it.


added 14 March 2015:

What is bitcoin going mainstream?

One can use different criteria.

1) A percentage of the amount of the total expenses on one year. But even 1% would be huge and would imply a very high price for bitcoin. However, according to the mentioned Gresham's Law, bitcoin will be hoarded and only rarely spent. It's like gold. Gold is part of mainstream, but people don't exchange it much, they prefer to keep it. On the main functions of money, mean of exchange, unit of account and reserve of value, I think the last will be bitcoin's main function. It won't be used much as unite of value, because of its volatility (many places that accept bitcoin prefer to announce the prices in USDs). It won't be used a lot as mean of payment, because people will mostly hoard it.

2) Accessibility: the fact that anyone can easily buy, sell and pay with bitcoin. Clearly, this is decisive. If we could exchange and spend bitcoins on the majority of banks' ATMs and retailers, we could say bitcoin is mainstream. But imagine that even in these conditions bitcoin kept being scarcely used, with small demand.  It wouldn't be mainstream. Many physical businesses complain they never had customers paying with bitcoin. So, this is a necessary condition, but it isn't enough.

3) A percentage of people owning it. This seems to be a good criterion. But it isn't easy to establish a number: 10% seems enough, but not 1% or even 5%. 70 or even 350 million users on the all world would be great, but not enough for talking about mainstream. I guess only at 10% we would start to see unfold the problems above mentioned. But this kind of projections is hard to make.

Think about Paypal (I hate it, but let's use it as example). Is Paypal mainstream? I don't think so. It had a volume of transactions of only 180 billion on 2013, about 150 million active registered accounts and in many countries you can use it as mean of payment only on a few places. So, it reached about 2% of world population.

Bitcoin had about 23 billion USDs in trade volume alone during the last 12 months (see http://www.bitcoinity.org/markets/list?currency=ALL&span=6m, at current price) and maybe 1 or 2 million active users. It still has a long way to go.

[Cranky4u]

The BTC aspects of decentralisation is what will create the 'big headaches' for the established order of Government. The truly multi-nationals, those without any flag, will realish the escape from the bonds of a government controlled currency as they will no longer be forced to lobby / buy their monetary policy.

[Ron~Popeil]

This new world is going to require some new ways of thinking. The old ways will no longer work. The people that come up with the new ideas will be very wealthy.

[Chef Ramsay]

That's my general outlook on things in this crypto movement as well and it's what is in the back of my mind whenever I describe BTC to people, friends and family. Some just laugh it off or have heard of the negative news and want nothing to do with it. On one hand, I can understand their concern in that they've saved all their life or have been burned before. On the other, if they don't do their due diligence and study things like I have, then I have no regrets if they miss out. You can lead a horse to water but you can't make them drink or in this case, think. I don't mean for this to happen but there's a bit of a superiority complex building for those that do "get it" and have a vision to get outside of the govt created box of institutional slavery.

[Beliathon]

There's a bit of a superiority complex building for those that do "get it" and have a vision to get outside of the govt created box of institutional slavery.

How can we help but feel superior? Looking around at a world of blinded slaves who believe they're free, and one can only feel pity, sadness, and compassion.

It will make us bitcoiners rich, but it will be at the expenses of fiat holders.

[p2pbucks]

It's very hard to say the future .
but i guess bitcoin will be not worse than centralized fiat system 

[twistyfy]

If bitcoin ever goes mainstream it will surely ruin the lifes of all the ones invested in fiat (see https://bitcointalk.org/index.php?topic=180798.0). Gresham's Law will destroy their fiat savings, since everyone will want the stronger bitcoin, devaluating fiat. We'll see it happen first in the trouble economies, with high inflation and generalized suspicion on governmental money because of past problems.

And I have little doubt that bitcoin won't bring any equality, on the contrary. It will make us bitcoiners rich, but it will be at the expenses of fiat holders.

Because I doubt bitcoin will bring much prosperity, since it will establish a deflationary monetary system. But maybe it will be possible to minimize those deflationary effects:

a) Commercial banks will adopt a bitcoin fractional reserve system, lending bitcoins with only partial support on their holdings. That will allow an artificial (banking) expansion of the amount of bitcoins, thanks to the so-called banking money multiplier.
But since it will be hard to keep a trustworthy insurance of deposits (the government won't have enough bitcoins for that and can't create them), the system will be much more susceptible to runs.
And the interest will have to be high, because most people will prefer to have the bitcoins in their own wallets. So, forget about low interest rates. Well, high real interest rates (aggravated by potential deflation) can ruin any economy.

b) It also might be created a bitcoin pattern, with governments printing money freely convertible in bitcoins. But I can see already the runs on the government on times of crises.

How will the central bank in depressions stimulate the economy?
It won't be possible to do any quantitative easing. Borrowing bitcoins to lend them at cheaper interest rates to the commercial banks won't be cheap.

How will the Government control massive tax evasion, especially if the anonymity of bitcoin improves?  
They will find a way, nothing has destroyed the State in more than 13 thousand years of hierarchical societies. Bitcoin won't be able to do it. It seems we will be subject to intense control of our use of the Internet in order to track our earnings and spending of bitcoins. Some we'll be able to evade it. But the majority won't.

Will the volatility of bitcoin ever end?
The increase of its users will keep bitcoin's price going up. However, because supply and demand is controlled by human perceptions and emotions, after a huge boom in price it will always come a bust. Every overshooting of the price will be followed by a general perception that the price increased too fast and, consequently, by a drop.
For volatility to end, it would be necessary a general adoption of bitcoin that would limit further increases for lack of enough new persons to make a substantial difference in demand. But since the numbers of bitcoin are limited, that would also require or a stagnant GDP or a fractional reserve system based on bitcoin that would allow its banking numbers to artificially increase side by side with GDP. That won't happen for years. Volatility is here to stay for long.

Will this scenario be the future?
It's impossible to say. But bitcoin seems to have already a too strong standing to fade away on it on.
Another better alt coin might be a stronger obstacle than fiat. But bitcoin can always adopt any improvements.

Can governments still destroy it?
An international coordinated effort against the main exchanges and sites could indeed hurt heavily bitcoin. Even our own wallets are susceptible to attacks by virus/worms (remember Stuxnet?) and the network can also be affected. Access to it can be blocked by ISPs at governmental command. Many could evade these blocks, but the major part of the bitcoiners would give up, taking in account also the risk of sanctions. That indeed would spook major investors.
This can still happen. The outcome is anyone's guess, it would depend on governmental coordination and level of effort. Governments lost similar wars (drugs, alcohol, prostitution), but bitcoin is an easier target than these activities. It's not a surprise that besides scams, governmental repression has been the main negative driver of price.

What would be the consequences of this mass adoption over the price?
I can't even imagine what would be the price of bitcoin. Forget about all the low previsions you read before.


But the genie is out of the bottle. There is nothing we can do, except tell about it.

We want so badly for bitcoin to be accepted in stores and such, but has anyone thought of this before? What's going to happen once everyone is using bitcoin?

[Ron~Popeil]

If bitcoin ever goes mainstream it will surely ruin the lifes of all the ones invested in fiat (see https://bitcointalk.org/index.php?topic=180798.0). Gresham's Law will destroy their fiat savings, since everyone will want the stronger bitcoin, devaluating fiat. We'll see it happen first in the trouble economies, with high inflation and generalized suspicion on governmental money because of past problems.

And I have little doubt that bitcoin won't bring any equality, on the contrary. It will make us bitcoiners rich, but it will be at the expenses of fiat holders.

Because I doubt bitcoin will bring much prosperity, since it will establish a deflationary monetary system. But maybe it will be possible to minimize those deflationary effects:

a) Commercial banks will adopt a bitcoin fractional reserve system, lending bitcoins with only partial support on their holdings. That will allow an artificial (banking) expansion of the amount of bitcoins, thanks to the so-called banking money multiplier.
But since it will be hard to keep a trustworthy insurance of deposits (the government won't have enough bitcoins for that and can't create them), the system will be much more susceptible to runs.
And the interest will have to be high, because most people will prefer to have the bitcoins in their own wallets. So, forget about low interest rates. Well, high real interest rates (aggravated by potential deflation) can ruin any economy.

b) It also might be created a bitcoin pattern, with governments printing money freely convertible in bitcoins. But I can see already the runs on the government on times of crises.

How will the central bank in depressions stimulate the economy?
It won't be possible to do any quantitative easing. Borrowing bitcoins to lend them at cheaper interest rates to the commercial banks won't be cheap.

How will the Government control massive tax evasion, especially if the anonymity of bitcoin improves?  
They will find a way, nothing has destroyed the State in more than 13 thousand years of hierarchical societies. Bitcoin won't be able to do it. It seems we will be subject to intense control of our use of the Internet in order to track our earnings and spending of bitcoins. Some we'll be able to evade it. But the majority won't.

Will the volatility of bitcoin ever end?
The increase of its users will keep bitcoin's price going up. However, because supply and demand is controlled by human perceptions and emotions, after a huge boom in price it will always come a bust. Every overshooting of the price will be followed by a general perception that the price increased too fast and, consequently, by a drop.
For volatility to end, it would be necessary a general adoption of bitcoin that would limit further increases for lack of enough new persons to make a substantial difference in demand. But since the numbers of bitcoin are limited, that would also require or a stagnant GDP or a fractional reserve system based on bitcoin that would allow its banking numbers to artificially increase side by side with GDP. That won't happen for years. Volatility is here to stay for long.

Will this scenario be the future?
It's impossible to say. But bitcoin seems to have already a too strong standing to fade away on it on.
Another better alt coin might be a stronger obstacle than fiat. But bitcoin can always adopt any improvements.

Can governments still destroy it?
An international coordinated effort against the main exchanges and sites could indeed hurt heavily bitcoin. Even our own wallets are susceptible to attacks by virus/worms (remember Stuxnet?) and the network can also be affected. Access to it can be blocked by ISPs at governmental command. Many could evade these blocks, but the major part of the bitcoiners would give up, taking in account also the risk of sanctions. That indeed would spook major investors.
This can still happen. The outcome is anyone's guess, it would depend on governmental coordination and level of effort. Governments lost similar wars (drugs, alcohol, prostitution), but bitcoin is an easier target than these activities. It's not a surprise that besides scams, governmental repression has been the main negative driver of price.

What would be the consequences of this mass adoption over the price?
I can't even imagine what would be the price of bitcoin. Forget about all the low previsions you read before.


But the genie is out of the bottle. There is nothing we can do, except tell about it.

We want so badly for bitcoin to be accepted in stores and such, but has anyone thought of this before? What's going to happen once everyone is using bitcoin?

Freedom.

[Light]

Gresham's Law will destroy their fiat savings, since everyone will want the stronger bitcoin, devaluating fiat. We'll see it happen first in the trouble economies, with high inflation and generalized suspicion on governmental money because of past problems.

Would you mind explaining how your using Gresham's law to suggest that people will want a stronger Bitcoin?

Gresham's law states that any circulating currency consisting of both "good" and "bad" money (both forms required to be accepted at equal value under legal tender law) quickly becomes dominated by the "bad" money. This is because people spending money will hand over the "bad" coins rather than the "good" ones, keeping the "good" ones for themselves. Legal tender laws act as a form of price control. In such a case, the artificially overvalued money is preferred in exchange, because people prefer to save rather than exchange the artificially demoted one (which they actually value higher).

If I have it the right way round, fiat will be the overvalued currency ('bad') and Bitcoin will be the undervalued currency ('good'). In effect it'll mean that everyone will hoard BTC rather than spend it making it useless as a currency because nobody will bother with it as there will be no supporting infrastructure. In effect, it'll become just another commodity...

[hdbuck]

If bitcoin ever goes mainstream it will surely ruin the lifes of all the ones invested in fiat (see https://bitcointalk.org/index.php?topic=180798.0). Gresham's Law will destroy their fiat savings, since everyone will want the stronger bitcoin, devaluating fiat. We'll see it happen first in the trouble economies, with high inflation and generalized suspicion on governmental money because of past problems.

And I have little doubt that bitcoin won't bring any equality, on the contrary. It will make us bitcoiners rich, but it will be at the expenses of fiat holders.

Because I doubt bitcoin will bring much prosperity, since it will establish a deflationary monetary system. But maybe it will be possible to minimize those deflationary effects:

a) Commercial banks will adopt a bitcoin fractional reserve system, lending bitcoins with only partial support on their holdings. That will allow an artificial (banking) expansion of the amount of bitcoins, thanks to the so-called banking money multiplier.
But since it will be hard to keep a trustworthy insurance of deposits (the government won't have enough bitcoins for that and can't create them), the system will be much more susceptible to runs.
And the interest will have to be high, because most people will prefer to have the bitcoins in their own wallets. So, forget about low interest rates. Well, high real interest rates (aggravated by potential deflation) can ruin any economy.

b) It also might be created a bitcoin pattern, with governments printing money freely convertible in bitcoins. But I can see already the runs on the government on times of crises.

How will the central bank in depressions stimulate the economy?
It won't be possible to do any quantitative easing. Borrowing bitcoins to lend them at cheaper interest rates to the commercial banks won't be cheap.

How will the Government control massive tax evasion, especially if the anonymity of bitcoin improves?  
They will find a way, nothing has destroyed the State in more than 13 thousand years of hierarchical societies. Bitcoin won't be able to do it. It seems we will be subject to intense control of our use of the Internet in order to track our earnings and spending of bitcoins. Some we'll be able to evade it. But the majority won't.

Will the volatility of bitcoin ever end?
The increase of its users will keep bitcoin's price going up. However, because supply and demand is controlled by human perceptions and emotions, after a huge boom in price it will always come a bust. Every overshooting of the price will be followed by a general perception that the price increased too fast and, consequently, by a drop.
For volatility to end, it would be necessary a general adoption of bitcoin that would limit further increases for lack of enough new persons to make a substantial difference in demand. But since the numbers of bitcoin are limited, that would also require or a stagnant GDP or a fractional reserve system based on bitcoin that would allow its banking numbers to artificially increase side by side with GDP. That won't happen for years. Volatility is here to stay for long.

Will this scenario be the future?
It's impossible to say. But bitcoin seems to have already a too strong standing to fade away on it on.
Another better alt coin might be a stronger obstacle than fiat. But bitcoin can always adopt any improvements.

Can governments still destroy it?
An international coordinated effort against the main exchanges and sites could indeed hurt heavily bitcoin. Even our own wallets are susceptible to attacks by virus/worms (remember Stuxnet?) and the network can also be affected. Access to it can be blocked by ISPs at governmental command. Many could evade these blocks, but the major part of the bitcoiners would give up, taking in account also the risk of sanctions. That indeed would spook major investors.
This can still happen. The outcome is anyone's guess, it would depend on governmental coordination and level of effort. Governments lost similar wars (drugs, alcohol, prostitution), but bitcoin is an easier target than these activities. It's not a surprise that besides scams, governmental repression has been the main negative driver of price.

What would be the consequences of this mass adoption over the price?
I can't even imagine what would be the price of bitcoin. Forget about all the low previsions you read before.


But the genie is out of the bottle. There is nothing we can do, except tell about it.

We want so badly for bitcoin to be accepted in stores and such, but has anyone thought of this before? What's going to happen once everyone is using bitcoin?

Freedom.

hum could also be quite teh contrary

however me no think bitcoin's purpose is to go mainstream. gold isnt

[Ron~Popeil]

If bitcoin ever goes mainstream it will surely ruin the lifes of all the ones invested in fiat (see https://bitcointalk.org/index.php?topic=180798.0). Gresham's Law will destroy their fiat savings, since everyone will want the stronger bitcoin, devaluating fiat. We'll see it happen first in the trouble economies, with high inflation and generalized suspicion on governmental money because of past problems.

And I have little doubt that bitcoin won't bring any equality, on the contrary. It will make us bitcoiners rich, but it will be at the expenses of fiat holders.

Because I doubt bitcoin will bring much prosperity, since it will establish a deflationary monetary system. But maybe it will be possible to minimize those deflationary effects:

a) Commercial banks will adopt a bitcoin fractional reserve system, lending bitcoins with only partial support on their holdings. That will allow an artificial (banking) expansion of the amount of bitcoins, thanks to the so-called banking money multiplier.
But since it will be hard to keep a trustworthy insurance of deposits (the government won't have enough bitcoins for that and can't create them), the system will be much more susceptible to runs.
And the interest will have to be high, because most people will prefer to have the bitcoins in their own wallets. So, forget about low interest rates. Well, high real interest rates (aggravated by potential deflation) can ruin any economy.

b) It also might be created a bitcoin pattern, with governments printing money freely convertible in bitcoins. But I can see already the runs on the government on times of crises.

How will the central bank in depressions stimulate the economy?
It won't be possible to do any quantitative easing. Borrowing bitcoins to lend them at cheaper interest rates to the commercial banks won't be cheap.

How will the Government control massive tax evasion, especially if the anonymity of bitcoin improves?  
They will find a way, nothing has destroyed the State in more than 13 thousand years of hierarchical societies. Bitcoin won't be able to do it. It seems we will be subject to intense control of our use of the Internet in order to track our earnings and spending of bitcoins. Some we'll be able to evade it. But the majority won't.

Will the volatility of bitcoin ever end?
The increase of its users will keep bitcoin's price going up. However, because supply and demand is controlled by human perceptions and emotions, after a huge boom in price it will always come a bust. Every overshooting of the price will be followed by a general perception that the price increased too fast and, consequently, by a drop.
For volatility to end, it would be necessary a general adoption of bitcoin that would limit further increases for lack of enough new persons to make a substantial difference in demand. But since the numbers of bitcoin are limited, that would also require or a stagnant GDP or a fractional reserve system based on bitcoin that would allow its banking numbers to artificially increase side by side with GDP. That won't happen for years. Volatility is here to stay for long.

Will this scenario be the future?
It's impossible to say. But bitcoin seems to have already a too strong standing to fade away on it on.
Another better alt coin might be a stronger obstacle than fiat. But bitcoin can always adopt any improvements.

Can governments still destroy it?
An international coordinated effort against the main exchanges and sites could indeed hurt heavily bitcoin. Even our own wallets are susceptible to attacks by virus/worms (remember Stuxnet?) and the network can also be affected. Access to it can be blocked by ISPs at governmental command. Many could evade these blocks, but the major part of the bitcoiners would give up, taking in account also the risk of sanctions. That indeed would spook major investors.
This can still happen. The outcome is anyone's guess, it would depend on governmental coordination and level of effort. Governments lost similar wars (drugs, alcohol, prostitution), but bitcoin is an easier target than these activities. It's not a surprise that besides scams, governmental repression has been the main negative driver of price.

What would be the consequences of this mass adoption over the price?
I can't even imagine what would be the price of bitcoin. Forget about all the low previsions you read before.


But the genie is out of the bottle. There is nothing we can do, except tell about it.

We want so badly for bitcoin to be accepted in stores and such, but has anyone thought of this before? What's going to happen once everyone is using bitcoin?

Freedom.

hum could also be quite teh contrary

however me no think bitcoin's purpose is to go mainstream. gold isnt

Care to elaborate? I am curious how bit coin could make us less free. Anything that takes power from governments and gives it to the people makes us all more free.

[Light]

Care to elaborate? I am curious how bit coin could make us less free. Anything that takes power from governments and gives it to the people makes us all more free.

Freedom is a completely abstract notion. You are technically taking power away from the government by promoting Bitcoin, however you are in turn giving power to a select handful of people who have large holdings of coins. It doesn't give the power to collective society (if anything democratically elected governments do so on the behalf of the people) but instead some individuals.

[Ron~Popeil]

Care to elaborate? I am curious how bit coin could make us less free. Anything that takes power from governments and gives it to the people makes us all more free.

Freedom is a completely abstract notion. You are technically taking power away from the government by promoting Bitcoin, however you are in turn giving power to a select handful of people who have large holdings of coins. It doesn't give the power to collective society (if anything democratically elected governments do so on the behalf of the people) but instead some individuals.

I see your point there. Those selective people don't have the power to wage war and imprison dissenters though. I would take an economic aristocracy over a political one any day. Also I plan to be part of that aristocracy so my motives are a little selfish as well. 

[Trading]

Gresham's Law will destroy their fiat savings, since everyone will want the stronger bitcoin, devaluating fiat. We'll see it happen first in the trouble economies, with high inflation and generalized suspicion on governmental money because of past problems.

Would you mind explaining how your using Gresham's law to suggest that people will want a stronger Bitcoin?

Gresham's law states that any circulating currency consisting of both "good" and "bad" money (both forms required to be accepted at equal value under legal tender law) quickly becomes dominated by the "bad" money. This is because people spending money will hand over the "bad" coins rather than the "good" ones, keeping the "good" ones for themselves. Legal tender laws act as a form of price control. In such a case, the artificially overvalued money is preferred in exchange, because people prefer to save rather than exchange the artificially demoted one (which they actually value higher).

If I have it the right way round, fiat will be the overvalued currency ('bad') and Bitcoin will be the undervalued currency ('good'). In effect it'll mean that everyone will hoard BTC rather than spend it making it useless as a currency because nobody will bother with it as there will be no supporting infrastructure. In effect, it'll become just another commodity...

In that notion, "dominated by" means that the bad money will be the one everyone will be given away, so it will be the most transacted one. Because the good money will be hoarded. So, if you received payments in fiat and bitcoin, you will keep bitcoin and use fiat to buy things. Of course, that will make the exchange rate of fiat go down (devaluate) and the one of bitcoin to go up. We already are seeing this phenomena. It's this that is justifying the rise in price of bitcoin.

[Trading]

I know many bitcoiners have an anarchist/libertarian perspective of the world, therefore, they look at the government as a bad thing.

But the creation of a government controlled by the people is one of the most important political inventions of humankind. We managed to tamed the most powerful institution on Earth: the Leviathan of Hobbes. If the government would disappear tomorrow, I think we know what would happen: most streets would be controlled by violent groups. We would living on a brutal feudalistic system in no time.

The state has important functions on stimulating the economy on depressions and social functions supporting the poor that seem to be unviable or hard to execute on a monetary system where money is finite and it's in the hands of a group of pioneers (our hands).

Take the creation of the money from the hands of a democratic government (I know in many countries that power isn't in the hands of democrats), make it finite, and in the hands of a group of pioneers, and rest assure that justice won't be served.

But my text isn't about justice. There is little that we can do. I certainly won't try to convince governments to destroy bitcoin. They will have to do their home work. It's only about taking conscience of what might happen.

Be careful with what you want, because it might come true.

[Ron~Popeil]

Gresham's Law will destroy their fiat savings, since everyone will want the stronger bitcoin, devaluating fiat. We'll see it happen first in the trouble economies, with high inflation and generalized suspicion on governmental money because of past problems.

Would you mind explaining how your using Gresham's law to suggest that people will want a stronger Bitcoin?

Gresham's law states that any circulating currency consisting of both "good" and "bad" money (both forms required to be accepted at equal value under legal tender law) quickly becomes dominated by the "bad" money. This is because people spending money will hand over the "bad" coins rather than the "good" ones, keeping the "good" ones for themselves. Legal tender laws act as a form of price control. In such a case, the artificially overvalued money is preferred in exchange, because people prefer to save rather than exchange the artificially demoted one (which they actually value higher).

If I have it the right way round, fiat will be the overvalued currency ('bad') and Bitcoin will be the undervalued currency ('good'). In effect it'll mean that everyone will hoard BTC rather than spend it making it useless as a currency because nobody will bother with it as there will be no supporting infrastructure. In effect, it'll become just another commodity...

In that notion, "dominated by" means that the bad money will be the one everyone will be given away, so it will be the most transacted one. Because the good money will be hoarded. So, if you received payments in fiat and bitcoin, you will keep bitcoin and use fiat to buy things. Of course, that will make the exchange rate of fiat go down (devaluate) and the one of bitcoin to go up. We already are seeing this phenomena. It's this that is justifying the rise in price of bitcoin.

I all ready prefer bit coin to fiat. I believe bit coin is a safer bet.

[jonald_fyookball]

It's going to be fine, quit worrying.

Early adopters will get a boost and most others won't. So what.
Also I don't think people will accept fractional reserve bitcoin.
The opposite will happen.  They will demand provable full solvency.

[BTCisthefuture]

I would say it's already gone mainstream.   

Of course there's huge room for more adoption, and it's not as mainstream as say people having a debit card or phone in their pocket.

I'm excited about the future of bitcoin and or cryptocurrencies.

[Ron~Popeil]

I would say it's already gone mainstream.   

Of course there's huge room for more adoption, and it's not as mainstream as say people having a debit card or phone in their pocket.

I'm excited about the future of bitcoin and or cryptocurrencies.

When you can buy gas with it bit coin has arrived.

[runam0k]

It's inevitable (that Bitcoin will go mainstream), but fiat isn't going anywhere any time soon.  Plenty of time for people to divest.  I know I'd keep some USD in a USD side chain.