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Comment by tiemand | Hacker News Reader

I think thats an interesting perspective. Just as gold is a finite quantity so will Bitcoin be a finite quantity when it reaches 21Mil coins.

I can imagine that in future Bitcoins can be used as a "reserve" currency that backs another currency

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A major problem with BTC as a reserve currency is the way it is generated (mining) and reclaimed (fees). An entity with significant computational power would be able to maintain significant control over the reserve currency. It's feasible that early adopters, then, would be holding significant percentages of the reserve currency. What would motivate later adopters to convert when they have perfectly viable reserves already (gold, USD, etc) that's more equitably (well, from their perspective at least) distributed?

Second problem, it requires a major shift in the motivation of many adopters (anti-fiat, anti-fractional reserve banking).

Bitcoin is a protocol. There is nothing stopping the UN from creating their own currency using the Bitcoin protocol with all the characteristics they require of a reserve currency.

It's also a thing that is attempting to be a currency/commodity. I suppose in any discussion we should make clear which aspect we're talking about. I was talking about the currency/commodity aspect as that's what this entire thread was started on. For the protocol, I agree with you.

Gold is constantly mined, the amount increasing. It was acceptable as a currency-backer only because the amount mined tended to grow at the pace of the rest of the economy, although there were years when more or less was mined and this caused issues.

Bitcoin has these issued baked into the protocol.

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