Can someone give me a really compelling reason to think crypto would ever overtake a fiat currency?
Nov 27, 2021
35 Comments
It just doesn’t make sense to me.
The USD has value because the US government demands taxes in and pays its debt obligations out in USD.
The US government is important because everyone that lives within the physical borders of US territory is under its jurisdiction and has to comply with its laws.
The currency is tied to the physical hard power that the US government exerts / political and legal structure it provides.
I guess crypto makes sense in an anarchy devoid of political structure but it sounds like facilitation of exchange is probably going to be one of many problems you’d have at that point.
comments
2. If folks start exhibiting a strong preference for crypto over fiat, rules may just have to change.
3. Even if governments can enforce some rules at a physical level, it’s possible there will simply be a parallel economy operating on crypto, similarly to what happens with unlaundered money today.
Real solutions blend into the background - they’re not super loud.
So if that's not what you mean by overtaking, then you gotta define better what you mean by overtake.
What I don’t understand is why people think there will be a better fx rate between an official crypto usd and bitcoin…
The reason they think that is that governments which have the power to print money, by game theory analysis, will tend to keep printing more and more. This is fundamentally different than the flagship cryptos which have rules built into the algorithm to prevent that value siphoning away from present holders.
This mechanism is important and is why many investors care so much and have legal terms about anti-dilution for shares. Unfortunately for us, the government can dilute our USD whenever they like and we just have to accept it.