No one can control the economy
This is exactly what bitcoin enthusiasts believe is the beauty of cryptocurrency.
It fell several times, but it is still there.
It is foolish to think that bitcoin will replace money issued by central banks. Worse still, to replace the US dollar.
It’s one thing for governments to allow small transactions with cryptocurrencies, and that would certainly be desirable, but it’s an entirely different matter when governments allow large payments, which would make it extremely difficult to collect taxes or the fight against criminal activities.
We don’t need cryptocurrencies
Bitcoin is not necessary for the end consumer like you and me.
All e-commerce and physical commerce works seamlessly with US dollars and Euros.
We have a good banking system where it is easy to transfer money from person to person through online and digital banking.
Bitcoin is slower and more expensive than paying with bank cards.
With not only high transaction costs, but also exorbitant spreads if you plan to trade it for any currency that you can actually use day to day.
You cannot pay your Internet subscription and electricity bill with Bitcoin. The best you can do is buy drugs, illegal adult movies, and guns.
It is not safe to use Bitcoin, thefts are increasing, and hacks and accidents have cost people millions of dollars so far.
It consumes a lot of energy, is harmful to the environment, does not work without the Internet and is useless in the event of a power failure.
And it is not a safe investment in a financial and economic crisis. The best you can do is lose your assets when things go wrong.
If cryptocurrencies really catch on and become big, many hackers will start developing more and more advanced viruses to steal people’s wallets.
It is already happening.
But as long as we have a system as good and functional as the one we have now with bank cards and mobile and online payments, cryptocurrencies will only be relevant for online casinos, gambling and systems. pyramids.
Government cryptocurrencies are on the way
If bitcoin starts dominating the market, which I don’t think will happen, then states and banks will probably start developing their own cryptocurrencies.
And it has already happened.
Ripple is a cryptocurrency with which several different banks from different parts of the world cooperate. But like almost every other cryptocurrency, Ripple has someone you need to trust.
Bitcoin will never replace the US dollar
A dominant currency should function as the most important international currency for transactions, investments and reserves.
It must be freely convertible into other currencies and be available globally in sufficient quantities to meet global demand for liquidity.
The reserve currency country must have open, stable and well-developed financial markets.
The euro is unlikely to replace the US dollar. Because of its stability and the size of the euro zone.
The euro has a good chance of gaining importance as a reserve currency against the dollar in the long term. But current economics and politics, as well as structural and demographic problems in the Eurozone, speak against the Euro as a substitute for the dollar.
Bitcoin does not help in financial crises
It does not allow injections of liquidity into the financial markets.
Liquidity is the conversion of an asset into money.
During a financial crisis, liquidity in financial markets skyrockets. Investors withdraw their cash. The markets make liquidity more expensive or refuse it.
Financial institutions would collapse and go bankrupt if they had to sell their assets to increase liquidity in falling markets.
In such situations, a central bank can prevent the collapse of the financial system by making large amounts of liquidity available to the financial system in a short time.
In the cryptocurrency system, neither is predictable when a crisis might occur, so rules for creating crisis liquidity can be established.
A cryptocurrency financial system would be prone to crises and would never recover.
Additionally, asset markets, capital markets, and labor markets are not sufficiently integrated to justify the creation of a cryptocurrency.
Since the world is not an ideal currency area, the economic system would not work under a global cryptocurrency.
Bitcoin is already dead.
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