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Comment by newaccount2021 | Hacker News Reader

newaccount2021

It was never in any danger of becoming the future of money.

The entire power of a modern market democracy rests in the ability to control its currency. If you remove that power, the state itself has no legitimacy. Bitcoin was never ever going to be blessed as an alternative to the USD, no matter how much sense it made on paper.

Bitcoin is a pure sentiment asset. It rises when people think it should rise, and falls when people think it should fall. The value is neither reflective of productive work or a legitimate arbitrary power. It was and is a beanie-baby/baseball card economy and it will never be anything else.

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> The entire power of a modern market democracy rests in the ability to control its currency.

State monopoly over money is a good thing or a bad thing?

> If you remove that power, the state itself has no legitimacy.

We've had "legitimate" states since the dawn of time, before fiat currencies. Many kings and republics ruled and minted coins, but they were always limited by what they had, and could not arbitrarily create more.

Fiat's main advantage is monetary policy, arguably the most powerful economic tool a country has. I highly doubt countries like China and the US will willingly give that up. The reason Bitcoin has survived so long is because outside the black market it is only used for speculation (at least, in any practical amounts). If a highly deflationary coin like Bitcoin became a currency, we'd be screwed and very vulnerable to what happened during the great depression with gold-backed money.

Nation states will never give up the ability to print money, and fiat will always exist.

But a deflationary asset has utility, and ironically central banks will want to hold it as a reserve asset. They'll just be the last ones to do so.

Kings transacted gold, which can be debased, hidden, and cut up, but there is no practical, economic way to destroy it.

Bitcoin can be destroyed, cheaply. It isn't the government-proof asset you think it is.

How do you debase gold other than rapidly attempting to mine more of it?

How do you "destroy" Bitcoin?

Bitcoin is Not Backed by Nothing: https://unchained-capital.com/blog/bitcoin-is-not-backed-by-...

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