Why Do People Believe Bitcoin Will Replace Fiat?

[Lauda]

Well one of the reasons might be that the system that we have here is damaged from inflation.
The financial system is breaking down. What happens when the $ loses most of it value and you have 1,000,000 Bills?
I'm not saying that Bitcoin shall replace it, but I'd like to see it as an option.

[Swordsoffreedom]

I have a hard time following the logic when people make a statement that Bitcoin will replace all fiat currency.  In my world view, they coexist and will continue to coexist.  I can see where some fiat currencies die and Bitcoin fills in the gap, but not on a global level.  Your thoughts?

Digital currencies will replace monetary paper it's already happening in countries like Sweden even as we speak
Banks are not taking money because it takes a lot of time to process and is less commonly used in the information age as more data is digitized we will likely see more uses for digital currencies and that is why I think it will replace fiat.

http://news.yahoo.com/sweden-cash-king-no-more-082544562.html
http://www.bloomberg.com/news/2013-04-10/era-of-paper-money-dies-out-in-sweden-as-virtual-cash-takes-over.html

[qwerty555]

I have a hard time following the logic when people make a statement that Bitcoin will replace all fiat currency.  In my world view, they coexist and will continue to coexist.  I can see where some fiat currencies die and Bitcoin fills in the gap, but not on a global level.  Your thoughts?

Digital currencies will replace monetary paper it's already happening in countries like Sweden even as we speak
Banks are not taking money because it takes a lot of time to process and is less commonly used in the information age as more data is digitized we will likely see more uses for digital currencies and that is why I think it will replace fiat.

http://news.yahoo.com/sweden-cash-king-no-more-082544562.html
http://www.bloomberg.com/news/2013-04-10/era-of-paper-money-dies-out-in-sweden-as-virtual-cash-takes-over.html

+1   We don't yet know if they will all eventually be crypto. and there may well be an interim digital only phase .but I expect crypto to be the final outcome somewhere down the road.

[murraypaul]

It's really just a simple waiting game. There is a strong need for a world reserve currency (currently filled by USD, and somewhat my EUR). Fiat currencies have a 100% failure rate

No they don't.
There are many many fiat currencies currently in existence, and those haven't failed.
Your statement boils down to "Fiat currencies that have failed have a 100% failure rate", which is content-free.
On the same basis:
"Democracies have a 100% failure rate"
"Countries beginning with M have a 100% failure rate"

Regretfully yes they do eventually fail.

That same applies to "Democracies have a 100% failure rate"

And to take your source:

Twenty percent failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, 24% were monetarily reformed, and 23% are still in circulation approaching one of the other outcomes.

War and independence are not failures of a currency, but of a state. (Even if you consider Independence to be a failure?)
So 12+24+23 = 59% of fiat currencies did not fail due to their 'fiat-ness', according to your own source.
And does the 24% include, for example, the currencies that were abolished to form the Euro? Did the Deutschmark really 'fail'?

In fact, as I don't think their are any non-fiat currencies left (?), a more accurate statement would be that "100% of non-fiat currencies fail", surely?

[Rassah]

It's really just a simple waiting game. There is a strong need for a world reserve currency (currently filled by USD, and somewhat my EUR). Fiat currencies have a 100% failure rate

No they don't.
There are many many fiat currencies currently in existence, and those haven't failed.
Your statement boils down to "Fiat currencies that have failed have a 100% failure rate", which is content-free.
On the same basis:
"Democracies have a 100% failure rate"

Still being in existence is not proof that they will always be in existence, especially in light of dozzens that failed throughout history, versus the handful that still exist. Many of those that currently exist are extremely new too (Euro is about 20 years old, USD as a fiat is only about 45 years old). Commodity based currencies, on the other hand, don't fail, and just get supplanted by something better.

I don't know about democracies, since some failed and others have just been conquered and wiped out, but empires historically do have a 100% failure rate.

As for wars, that's not just "country was conquered," but likely includes "currency was used by country to pay for war, leading to high inflation and collapse. For USSR, the crappy economy was one of the reasons their currency failed, them printing and spending it like crazy to build up their war machine is another.

[inBitweTrust]

I think the people who go around saying Bitcoin will replace all money...

Most anarchists claim that Fiat will continue to coexist along side crypto-currencies at least as long as nation states exist(thousands of years - forever).

that it will end wars, collapse banks and governments,

The argument is Bitcoin can possibly end wars, not end all wars.(Reduce certain types of wars dependent upon funding through debt). Any student of history recognizes nation states collapse on their own quite easily with or without Bitcoin. Bitcoin could accelerate certain nation states imploding as it allows ease of capital flight vs other commodities like gold.

The worst are the people who have some political cause, claim Bitcoin is part of that cause, and try to imply that anyone who uses Bitcoin agrees with them and supports their cause.

Bitcoin is neutral , but at a protocol level has many characteristics which are anarchistic and facilitate anarchism. Bitcoin can be used by individuals and governments of any political ideology. Unfortunately, Bitcoin has properties which also undermine the ways in which certain governments fund themselves and "regulate" their citizens. There are many different ways Bitcoin could have been designed to have all the advantages of a digital and programmable currency without these properties that undermine nation states.

A separate argument is whether it is wise from a tactical approach to discuss Bitcoin's political implications. Personally, I think the argument is moot because Bitcoin has enough value where people will eventually be drawn to adopt it despite it being created by crypto-anarchists with political motivations.
 

[murraypaul]

It's really just a simple waiting game. There is a strong need for a world reserve currency (currently filled by USD, and somewhat my EUR). Fiat currencies have a 100% failure rate

No they don't.
There are many many fiat currencies currently in existence, and those haven't failed.
Your statement boils down to "Fiat currencies that have failed have a 100% failure rate", which is content-free.
On the same basis:
"Democracies have a 100% failure rate"

Still being in existence is not proof that they will always be in existence, especially in light of hundreds that failed, versus the handful that still exist.  Many of those that currently exist are extremely new too...

That applies equally well to currencies or democracies

Commodity based currencies, on the other hand, don't fail, and just get supplanted by something better.

Many nations used to have commodity based currencies. Few (None?) do now.
So either they failed, or you think the fiat currencies that replaced them were better?

I don't know about democracies, since some failed and others have just been conquered and wiped out, but empires historically do have a 100% failure rate.

If you wait long enough, everything has a 100% failure rate, that is the point.
Eventually every star in the universe will run out of fuel.
Does that mean that stars have a 100% failure rate?

[Hamnot56]

In my opinion Bitcoin will not replace all FIAT currencies, If crypto currency will replace FIAT one day It will not be Bitcoin. For the next 20 + years I don't see anything happening for FIAT.

[Rassah]

Still being in existence is not proof that they will always be in existence, especially in light of hundreds that failed, versus the handful that still exist.  Many of those that currently exist are extremely new too...

Is that about currencies or democracies?

Both? Note many of us don't support fiat nor democracies.

Commodity based currencies, on the other hand, don't fail, and just get supplanted by something better.

Many nations used to have commodity based currencies. Few (None?) do now.
So either they failed, or you think the fiat currencies that replaced them were better?

They were better. It is safer and easier to carry a paper note than gold coins or gold dust. The problem wasn't with gold backed notes themselves, but the lack of trust in people who were issuing them. Plus democracies that realized it's worthwhile for them to inflate money to give it away as social programs, in order for the voters to keep voting for them.

If you wait long enough, everything has a 100% failure rate, that is the point.

Has the horse and buggy failed? What about the fax machine? Or the musket? Good technologies and ideas survive, and get replaced, but still work. Gold still works. Fail implies "breaks and stops working." If you wait long enough, everything will get replaced by something better, but not everything "fails."

For example, should we assume that communism based economies don't fail, because North Korea, Cuba, and China still exist? Or should we take lessons from history that show every communist country has failed spectacularly, and those that still exist are completely broken, or, as China, have had to change themselves into more of a capitalist system? Also, we actually know the exact mechanisms that cause fiat to fail.

[QuestionAuthority]

I don't believe Bitcoin will be what replaces paper money and electronic government debt. I'm not even convinced that Bitcoin will be the survivor in the crypto coin wars. Most initial iterations of software are not the final useful form that becomes popular.

Something will eventually replace fiat maybe even in our lifetimes. I always figured it would be some form of ID at birth that can follow you around all your life. Maybe DNA account assignment or fingerprint/retina scanning. People can be assigned government credits by employers and deduct against them for things they want to buy. This would have the side benefit of eliminating many types of crime that revolve around untraceable currency.

[inBitweTrust]

Something will eventually replace fiat maybe even in our lifetimes. I always figured it would be some form of ID at birth that can follow you around all your life. Maybe DNA account assignment or fingerprint/retina scanning. People can be assigned government credits by employers and deduct against them for things they want to buy. This would have the side benefit of eliminating many types of crime that revolve around untraceable currency.

The Irony is strong when I compare the above with your username.

[shawshankinmate37927]

It's really just a simple waiting game. There is a strong need for a world reserve currency (currently filled by USD, and somewhat my EUR). Fiat currencies have a 100% failure rate

No they don't.
There are many many fiat currencies currently in existence, and those haven't failed.

Interesting logic, but I'm going to have to disagree with it.

Do you also believe that some people may live forever because some people are still alive now?

I think it's safe to say that, like humans, all fiat currencies eventually die.

[LitcoinCollector]

We are already paying digitally for 95%, well I am. The only thing is the banks that get paid for this 'service'.
Bitcoin makes this service absolete.

[murraypaul]

Still being in existence is not proof that they will always be in existence, especially in light of hundreds that failed, versus the handful that still exist.  Many of those that currently exist are extremely new too...

Is that about currencies or democracies?

Both? Note many of us don't support fiat nor democracies.

Commodity based currencies, on the other hand, don't fail, and just get supplanted by something better.

Many nations used to have commodity based currencies. Few (None?) do now.
So either they failed, or you think the fiat currencies that replaced them were better?

They were better. It is safer and easier to carry a paper note than gold coins or gold dust. The problem wasn't with gold backed notes themselves, but the lack of trust in people who were issuing them. Plus democracies that realized it's worthwhile for them to inflate money to give it away as social programs, in order for the voters to keep voting for them.

So when non-fiat currencies are replaced, you don't think it has to be because the original currency has failed...

If you wait long enough, everything has a 100% failure rate, that is the point.

Has the nurse and buggy failed? What about the fax machine? Or the musket? Good technologies and ideas survive, and get replaced, but still work. Gold still works. Fail implies "breaks and stops working." If you wait long enough, everything will get replaced by something better, but not everything "fails."

...but you don't seem to apply this logic to fiat currencies. It seems that by definition, any time they are replaced, it is because they have failed.
If a country gains independence and changes its currency, that is counted as a failure of the previous currency. If it is conquered by another country and changes it currency, that is counted as a failure of the previous currency.
If currencies are subsumed into a single currency union, that seems to be counted as a failure of those currencies.
If the above isn't what you think, then you must agree that there are many fiat currencies which are no longer in use, but which didn't fail, by the definition you used for commodity based currencies.

[Rassah]

I'm not even convinced that Bitcoin will be the survivor in the crypto coin wars. Most initial iterations of software are not the final useful form that becomes popular.

But bitcoin isn't software, it's a protocol. Open and upgradeable at that.

[QuestionAuthority]

Something will eventually replace fiat maybe even in our lifetimes. I always figured it would be some form of ID at birth that can follow you around all your life. Maybe DNA account assignment or fingerprint/retina scanning. People can be assigned government credits by employers and deduct against them for things they want to buy. This would have the side benefit of eliminating many types of crime that revolve around untraceable currency.

The Irony is strong when I compare the above with your username.

This thread isn't labeled what does QA want to happen. Change will happen whether I want it too or not. I'm not sure most people would want what I want. If I were king all drugs would be legal, prostitution would be legal, cigarettes would be illegal, we wouldn't embargo countries just because we don't like them or their leaders, we would stop imprisoning people for being poor, the Dept of Homeland security would all be taken to the Whitehouse lawn and shot as traitors to a free nation, no more holding people in jail as terrorists without trial. No, a lot of people wouldn't like my country.

[QuestionAuthority]

I'm not even convinced that Bitcoin will be the survivor in the crypto coin wars. Most initial iterations of software are not the final useful form that becomes popular.

But bitcoin isn't software, it's a protocol. Open and upgradeable at that.

Call it whatever. If it's so upgradable then why aren't they doing it? There are a lot of flaws that are being ignored and you know it. (A dev, jgarzik, has to put out a torrent for the blockchain instead of pruning it. We haven't solved the 51% attack yet. And on and on) If I see more upgrading going on then maybe my view will change and I will be convinced.

[qwerty555]

It's really just a simple waiting game. There is a strong need for a world reserve currency (currently filled by USD, and somewhat my EUR). Fiat currencies have a 100% failure rate

No they don't.
There are many many fiat currencies currently in existence, and those haven't failed.
Your statement boils down to "Fiat currencies that have failed have a 100% failure rate", which is content-free.
On the same basis:
"Democracies have a 100% failure rate"
"Countries beginning with M have a 100% failure rate"

Regretfully yes they do eventually fail.

That same applies to "Democracies have a 100% failure rate"

And to take your source:

Twenty percent failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, 24% were monetarily reformed, and 23% are still in circulation approaching one of the other outcomes.

War and independence are not failures of a currency, but of a state. (Even if you consider Independence to be a failure?)
So 12+24+23 = 59% of fiat currencies did not fail due to their 'fiat-ness', according to your own source.
And does the 24% include, for example, the currencies that were abolished to form the Euro? Did the Deutschmark really 'fail'?

In fact, as I don't think their are any non-fiat currencies left (?), a more accurate statement would be that "100% of non-fiat currencies fail", surely?

That point was...... that the currency was DESTROYED .....because of war and /or independence. .  You are also correct that 100% of non fiat currencies also fail/get destroyed or are monetarily reformed ( and disappear) ..so that leaves us with ALL currencies Die..which they do!

re Deutschmark euro...all fiats DIE not fail......(although the act of dying could be considered a failure)  

failure was referring to Every 30-40 years the Reigning Monetary System Fails and has to be retooled

[inBitweTrust]

This thread isn't labeled what does QA want to happen. Change will happen whether I want it too or not.

Ok, I was thinking your account was either sold or you were cynical to the future. I suppose your dystopian vision is one possibility.

Call it whatever. If it's so upgradable then why aren't they doing it? There are a lot of flaws that are being ignored and you know it. (A dev, jgarzik, has to put out a torrent for the blockchain instead of pruning it. We haven't solved the 51% attack yet. And on and on) If I see more upgrading going on then maybe my view will change and I will be convinced.

Technology is being scaffolded all around the Bitcoin blockchain all the time. Some people criticize bitcoin for not solving all of the problems immediately or adding every new feature set within the core protocol but there are some great advantages of keeping bitcoin simple, reliable and modular and other features scaffolded upon bitcoin instead.

[Beliathon]

There will still be some people who use fiat currencies.

Would you like me to mail you a letter with more thoughts on this?

Or you could read my editorial in the newspaper the next time you sit down and flip through the pages.

Sorry, I only use carrier pigeon.