I remember back in Jan 2018 when Bitcoin took off - everyone believed that it would replace fiat.<p>Now it’s several years later and you still can’t buy groceries with it at most major supermarkets and you can’t pay rent with it 99.999% of the time.<p>If fact, there are very few things that you can do with BTC besides trade it for other cryptos.<p>So when does this grand financial revolution happen? Or can we conclude that if it hasn’t happened yet, then it likely won’t happen at all?
I think about this a lot. No one can predict what will happen, but I don't see how it could possibly replace fiat currency. Governments are financed by debt, which they want to issue in a currency they control. The US gov does not want to issue bonds in a currency that they can't debase. That would be risky.<p>So, since they must issue bonds in dollars, they must also pay interest in dollars. They get this money from tax revenue. But that means they can never allow people to pay their taxes in anything but dollars, because they would risk losing money to volatility.<p>That in turn means that Americans will always need dollars no matter what, which means that they in turn have to careful about accepting something that's volatile with respect to the dollar.<p>So maybe it'll be a secondary currency that people use for certain discretionary things, where transaction costs are otherwise high, or when bitcoin is high against the dollar. But people will always have to think about what bitcoin is worth in terms of their countries fiat currency, and someone must take the volatility hit.<p>That doesn't mean it couldn't be useful as a store like gold. But there bitcoin faces strong competition because I don't think it will get much of a network effect if that's it's main purpose.
Because the narrative has morphed from Satoshi's vision as a <i>'A Peer-to-Peer Electronic Cash System'</i> into digital gold by the Bitcoin fans and that is why they hold it and never sell it or use it to pay for anything given how terribly slow, expensive and unsuitable it is as a replacement when it can lose half of its value very quickly.<p>> So when does this grand financial revolution happen? Or can we conclude that if it hasn’t happened yet, then it likely won’t happen at all?<p>What grand financial revolution? You mean CBDCs?
One thing is certain: history jumps or crawls, never walks. So don't expect smooth up or down trend lines.<p>The other phenomenon we've seen be fairly persistent on the internet is that successful decentralized systems may go in/out of the spotlight, but they rarely die.