Bubblesofearth wrote:So what is the end-game envisaged by Bitcoin enthusiasts? Do they imagine Bitcoin taking over from some/all fiat to become a (or the only) Global currency? If so then what are the implications for things like taxation and debt - will you still be able to get a mortgage if banks cannot create Bitcoin-based money? Do these enthusiasts imagine many more Governments adopting Bitcoin in the way El Salvador has tried to do?
Or is it seen as running in parallel with legal tender in most countries? Is pricing in Bitcoin seen as being more widely adopted? How widely? If it runs in parallel then will it actually be spent given Gresham's law?
Or just as a store of value like gold? In which case where does that value derive from - it can't just be scarcity surely?
The end-game will have implications for the ultimate price Bitcoin is likely to be able to reach.
Just wondering what the vision is.
BoE
Different bitcoiners have different visions.
There is an FT journalist who claims that you must worship at the feet of the great messiah Satoshi and live off beef, if you join the cult.
The truth is that there are Vegan bitcoiners and carnivore bitcoiners. It's a monetary system, not a cult. Indeed arguments abound within the bitcoin community and there are no ministers or priests to make pronouncements.
Some do actually see it replacing poorly performing fiat. These are the ones responsible for the claims of a price of $1mill or more per bitcoin, as that would be a direct translation of the assumption.
Others see at as competing as a means of money transmission and doing transactions.
Yet more see it as providing what is effectively banking services to the unbanked. Saving cash under the mattress is a bit old school.
Then there are those that see it as a store of value, which would give a different high price as we might then use the price of gold and market cap to predict the price. The bitcoin jargon for Gresham's law is Hodl (Hold On for Dear Life, you'll need to pry BTC from my cold dead hands).
Some see it as allowing people to flee repressive regimes taking savings with them.
Will debt and mortgages still be available/offered? Well there is a demand/requirement so I would expect so. You can use BTC as collateral against a fiat loan currently. Arguably in a pure BTC system, you couldn't have fractional reserve lending, but a pure BTC system doesn't scale to even a small country. Hence I can see fractional reserve banking happening.
I'm just one person and think that the "end game" is likely to be of a synthesis of the available options.
I buy BTC as a store of value, but feel that spending it IS important to it's price. Hence I do spend it.
This month I bought some clothes and some computer parts using some of my BTC.
Before the end of 2024 I intend to replace my phone using BTC. I will buy that BTC in the next 30 days for CGT reasons.
Now that I have software to track my BTC CGT and the CGT allowance is as low as it now is, I may buy BTC less often in larger amounts, but spend it more often too.