Post
Topic
Board Bitcoin Discussion
Re: Bitcoin never replace Fiat Money
by
Subrojit Roy
on 18/03/2017, 09:50:43 UTC
The answer is no i guess because decentralized cryptocurrency like bitcoin will have trouble reaching price stability. Should wages and prices have been denominated in bitcoin rather than dollars, pounds, yen, etc., there would have been

90% deflation in a couple of months in 2013.
66% inflation over 2014.
Price stability in 2015.
50–60% deflation over 2016.
Even the crudest measures of inflation with major currencies would not have shown such volatility.

The reason for the volatility is bitcoin has essentially a fixed monetary base as discovering bitcoin became more computationally difficult. At the very least, the monetary base is set by math, hardware resources, etc.For this reason, I don’t see how a decentralized, anarchist cryptocurrency could take off. Some central authority has to make decisions to increase or decrease the monetary base to get price stability.

I do see the possibility of cryptocurrency’s features being used somehow in the future, but by more centralized and coordinated actors