I appreciated that the humans depicted in the hypothetical responded with kindness and humanity in light of the disillusionment of money.
Quoting the caption of a photo in the article: “U.S. markets closed as traders left their jobs and resolved for once to do or make something, anything of real value.”
On the plus side, better than Bitcoin.
I’m genuinely curious as to why you feel that fiat currency is better than bitcoin (or cryptocurrencies is general)? Unless that was sarcasm or a joke pertaining to the spirit of the article.
Fiat currency is backed by the economy of the issuing government. All of the industry, wealth, knowledge, etc. of the government’s country all factors into its value. A decent government backed by a strong economy with a well run central bank will see slow but steady inflation. You don’t want deflation because then people hold onto the currency as a means of investment instead of circulating it in the economy. Just a nice, controlled inflation to keep things circulating.
Bitcoin, on the other hand, has no underlying asset. It is literally just an entry on the blockchain, no more. The value is entirely the product of the whims of investors. If people put a bunch of value into Bitcoin, the price goes up (deflation). If they decide Bitcoin is a bad deal, the price goes down (inflation). Nothing is present to stabilize the currency. That makes it hard to, say, write a contract for a supplier or labor where a 25% dip or rise in value in the currency is unacceptable. I know I wouldn’t want to work under a contract where overnight my effective pay drops by 25%. Likewise, a 25% change the other direction could put my employer out of business.
Contrast that with the US dollar, which usually has very predictable inflation. Contracts are routinely written out many years without worry. Even in the present time of relatively high inflation, it hasn’t been nearly as volatile as Bitcoin. The contract I’m under as part of my union has a yearly raise that factors in inflation plus some extra. Currently, my union is also in talks to provide a cost of living increase to compensate for the heightened inflation.
There are other issues with Bitcoin, but that’s the main one I have from the economics side. Because currencies are one of the bedrocks of an modern economy, they need to be steady and predictable with a solid base in real world assets. Bitcoin is none of these, so it is not suitable for anything serious.
Edit: One of the arguments that commonly used for Bitcoin is that it has a supply cap built into the system, so it is not subject to the whims of governments that might be tempted to produce hyperinflation to get out of debt. While that is true to some extent, it still doesn’t mean that Bitcoin isn’t subject to hyperinflation if there is ever a collapse in demand. In contrast, all but the most incompetent governments have a history of at least avoiding the worst of inflation.
