If Bitcoin is Worse than Fool’s Gold, Then What is Fiat?

If Bitcoin is Worse than Fool’s Gold, Then What is Fiat?

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SeekingAlpha describes Bitcoin will never replace fiat and unusable post-apocalypse. But then, what about fiat?

It looks like the writer tried to bash bitcoin without looking at the other side of the coin. In the last three years since I started my PhD, the most thing I learn is that there will always be weaknesses in everything. It is just a matter of trained eyes that will help you to see them.

SeekingAlpha’s article, first and foremost, dismisses bitcoin bulls’ belief that bitcoin will soon replace fiat. Furthermore, it mentions that bitcoin will not last. While I agree that bitcoin’s current economic model depends heavily on subsidy, it looks like the article is full of flaws.

Fiat Currency is Here to Stay, and so are Cryptocurrencies

The article imagines in the event of global catastrophe, fiat currency will survive and bitcoin dies. With its physical form, fiat currencies do not rely on electricity and electronic devices to operate, in case of countries no longer able to provide basic needs to their citizens.

Interestingly, it mentioned the recent COVID-19 outbreak. Probably the writer lost its memory; cash is no longer permitted as payment, as it may spread viruses. What do people like to get paid then? Digital money! Cards, PayPal, and maybe cryptocurrencies play greater roles at the moment, compared to physical monies.

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Bitcoin Has No Stability, and so does fiat

The writer compares bitcoin’s market price and fiat’s operational price. However, fiat currency has markets, too. Fortunately, fiat trading is heavily regulated and closely monitored by government organisations. These organisations will definitely influence the currency markets if their monies’ values fluctuate too much.

Bitcoin is traded in free markets. Probably fiat currencies will share the same fate if the governments do not keep an eye on them.

Bitcoin is valued in fiat currency, as one fiat currency is valued in other fiat currencies

This point does not really make sense, and unintelligible. While the writer argued that valuing bitcoin in fiat currency shows its weakness, what about all fiat currencies that are valued in other fiat currencies?

Conclusion

We do not know the future. A wise man said, never say never. Who knows how governments evolve in the future, as technologies emerge in our life. The writer and I are observers in life. We read the past, we analyse the current, but we have no idea about the future.

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