What are the main benefits of fiat that Bitcoin doesn’t have?
Doesn’t fiat allow governments to raise money more easily, by increasing the money supply and possibly easier taxation, to pay for important programs, including health care, education, research (and other public goods) and for emergencies (like COVID)?
All of those things would still be possible under a hypothetical “Bitcoin standard”. The difference is that they wouldn’t be funded by limitless money-printing and runaway debt.
The goal of Bitcoin is essentially to create a digital version of the classical gold standard (the monetary system used by Europe, the US, and other countries, before 1914). Under that system,
lending still happened;
governments still had the power to raises taxes for public projects; and
while governments would issue standardised notes that represented fixed amounts of gold, they weren’t able to inflate the gold supply itself.
Incidentally, that era is regarded as one of the most peaceful and innovative in human history—it’s referred to as the “Belle Epoque” in Europe, and as the “Gilded Age” in the US.
All that having been said: theorising is fun, but the success or failure of a currency ultimately depends on whether the individuals using it find that it serves their needs. Right now, there are many people around the world whose local currencies are clearly not serving their needs—but because money is currently a government monopoly, these people don’t have an alternative. The point of Bitcoin, then, is simply to give people a choice.
What are the main benefits of fiat that Bitcoin doesn’t have?
Doesn’t fiat allow governments to raise money more easily, by increasing the money supply and possibly easier taxation, to pay for important programs, including health care, education, research (and other public goods) and for emergencies (like COVID)?
All of those things would still be possible under a hypothetical “Bitcoin standard”. The difference is that they wouldn’t be funded by limitless money-printing and runaway debt.
The goal of Bitcoin is essentially to create a digital version of the classical gold standard (the monetary system used by Europe, the US, and other countries, before 1914). Under that system,
lending still happened;
governments still had the power to raises taxes for public projects; and
while governments would issue standardised notes that represented fixed amounts of gold, they weren’t able to inflate the gold supply itself.
Incidentally, that era is regarded as one of the most peaceful and innovative in human history—it’s referred to as the “Belle Epoque” in Europe, and as the “Gilded Age” in the US.
All that having been said: theorising is fun, but the success or failure of a currency ultimately depends on whether the individuals using it find that it serves their needs. Right now, there are many people around the world whose local currencies are clearly not serving their needs—but because money is currently a government monopoly, these people don’t have an alternative. The point of Bitcoin, then, is simply to give people a choice.