Post
Topic
Board Bitcoin Discussion
Re: Why Bitcoin Core Developers won't compromise
by
dinofelis
on 14/05/2017, 06:59:51 UTC
If we are talking about the purpose of Bitcoin, we should remember the context of its inception and the message encrypted in the genesis block:

"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"

This was probably intended to comment on the instability caused by fractional-reserve banking and to provide people with another option:   peer-to-peer cash.  

This is in fact extremely ironic.  The banking crisis of 2007-2008 was NOT caused by any failure of the fiat currency system.  It was caused by reckless speculation of financial institutions on "virtual assets" which were the toxic complex derivatives, of which the backing in real economic terms was totally unfathomable by their complexity and hence became unbacked assets, and which essentially crashed, exposing these financial institutions with worthless paper.  This SPECULATION is what was at the cause of the crisis, not any quirks in the issuing of fiat money, as can be seen by the relative price stability of most fiat currency in that period.

Now, as a reaction to that, bitcoin's creator invented an asset, bitcoin, that has a severe deflationary spiral built into it, and hence is entirely designed to be a heavily speculative asset (as is observed in reality), exactly of the same kind as the kind of hollow derivatives speculation that caused the crisis.

So, bitcoin pretended to fix a problem that wasn't one (namely the pretended problem with the fiat payment system), while inventing an asset that was of the same speculative type as the stuff that DID cause the problem.

That said, bitcoin did pave the way for a "freedom currency", that would allow people to win back their economic freedom, from law, state and tax.  So the fact that a freedom currency could exist, is an interesting aspect of bitcoin.  However, in my opinion, it contains too many fatal design flaws to become such a large scale currency (if even there's a demand for it) ; but for a smaller community of people, it can have this usage on occasions even though its overall design makes it into a speculative asset.