With built in and inevitable deflation. Bitcoin could never replace a national currency.
With transaction times in the tens of minutes and with a maximal global transaction rate of 5-10 per second. The Blockchain couldn't replace the banking system of single mid-sized town.
It's not money. It's at best "digital gold", but more realistically it's just a ponzi scheme.
That is the most grandiose goal a new monetary technology could possibly have. It doesn't need to replace a national currency to be useful/valuable to users.
FYI, Buddhist extremism has resulted in two (ongoing) genocides.
The fixed emission schedule of BTC means that there is no issuer that can capture increased demand in the good, but the holders of BTC get that benefit. So the only thing you need to bet on is if there will be more aggregate demand for the 21 million btc in the future than there is today.
With fiat currencies, when there is a crisis like COVID and the demand for money skyrockets, the fiat issuer can print out the money and do whatever it wants with that surplus demand.
If BTC makes it so the aggregate demand in currencies is split partially from fiat into BTC itself, then it will be a great transfer of wealth from governments into BTC owners.
There's your value.
And will quickly be banned by said country.
I also doubt on the feasibility of a global crackdown on miners in the entire world.
There are plenty of scenarios for Bitcoin to succeed and be useful without necessarily replacing national currencies.
«transaction times in the tens of minutes»
Wires take hours/days. Credit card transactions take 1-2 days before the seller's bank account is actually credited. Obviously speed isn't an issue for adoption given that people tolerate systems much slower than Bitcoin.
«maximal global transaction rate of 5-10 per second»
Bitcoin Lightning Network supports thousands/millions of transactions per seconds.
«Blockchain couldn't replace»
IMHO it shouldn't replace, but complement.
Wires take hours, rarely, if ever days, and in my experience the money is in the receiving account before I hang up from sending it.
Also people tolerate this system because there is nothing else available, and much of it is not a result of lack of desire but anti money laundering. Countries are already moving to digital currency tokens.
> Bitcoin could never replace a national currency.
You can't predict the future.
> With transaction times in the tens of minutes and with a maximal global transaction rate of 5-10 per second. The Blockchain couldn't replace the banking system of single mid-sized town.
With millions of transactions per second, the Lightning network could.
> It's not money.
It's money. Here's an explanation of money https://powreach.com/crypto
To HN moderators: make it possible to understand why someone downvoted. This is an example of what makes HN off-putting.
[0] https://krugman.blogs.nytimes.com/2010/08/02/why-is-deflatio...
No one's taking out a bitcoin mortgage to buy their house with.
The supply of Bitcoin has been inflated, on average, every 10 minutes for the past ~11 years.
How much USD will exist in 10 years?
How many BTC will it take to buy a Toyota Corolla in Feb 2022?
I think a better question would be, how many BTC will it take to buy a house in 2050? I think the three things that have experienced the most drastic inflation are: housing, healthcare and education. It would be interesting to measure Bitcoin's long term value next to those highly inflating costs. Say a house now costs 10 BTC/$500,000 and in 2050 10 BTC/$2,000,000.
Financial planning -> window, cause my base currency keeps moving around and won’t hold still long enough for me to even finish the equation.
When there's no more coins to mine, there's no reason for anyone to be running their bitcoin operations. It'll fall to governments? At that point, can't they introduce more Bitcoin?
Looking at https://ycharts.com/indicators/bitcoin_average_transaction_f... the average Bitcoin fee seems to be somewhere around $22 right now. Just think of the dialog occurring once miners have to make all their money from fees only:
"Yes sir, I would like to buy this chewing gum for my son. Yes I know it costs $0.50. Yes I know it will cost me the equivalent fee of $50 to buy it using Bitcoin. Now sell it to me already!".
Without the presence of transaction fees though, things would fall apart once the block reward ran out, as asked in the original question.