Post
Topic
Board Economics
Re: Bitcoin is Becoming a Global Currency
by
Rude Boy
on 19/03/2017, 13:38:50 UTC
If Bitcoin became global currency, it would necessarily limit what bankers and govt could do. It would be much, much more difficult for govt to finance wars, continually expand welfare roles (as opposed to focusing on those who are in most need), subsidize various industries, etc. Bankers would also have more incentive to limit it's lending.

However, overall there isn't any reason to believe that there wouldn't be similar investment vehicles, savings edifices, deposit insurance, etc.
In addition, as someone else mentioned, a fixed currency creates a situation where productivity and population growth (slowly) increases the value of each bitcoin. This encourages savings over debt.

Many disagree about the impact on business, productivity, growth, innovation, etc between an (moderate) inflationary/deflationary environment. But that's a slightly different and deeper conversation. Briefly, many believe that a deflationary environment would not just slow, but actually reverse spending, growth, and investment ("Deflationary death spiral"). They tend to believe that inflation is necessary to encourage spending and growth. Others (myself included) believe that an inflationary environment tends to encourage over-consumption, spending and borrowing over savings - thus leading to more/bad debt and contribute to in-stable boom/bust economic crashes. Similarly, these believe a deflationary environment would not stifle growth, but would slow it to a stable, more sustainable rate.