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Board Press
Re: [2019-01-10]Nick Szabo: Central Banks May Turn To Crypto Reserves Over Gold
by
squatter
on 10/01/2019, 21:47:44 UTC
let's suppose that yesterday some bank had bought bitcoin for the price of  $4000, The bank would take 4 billion dollars and Bum buys bicoin for the price of  $4000 and today they look at the bitcoin price:

1 btc =  $3500

the bank stay with many losses in less than 48 hours... bitcoin is very volatile

If gold were only a decade old, it would be very volatile too. I don't think that's a strong counterargument to what Szabo is saying.

It's all hypothetical, but in the case of global mainstream adoption the volatility should greatly decrease eventually. Decades from now, most of the speculative potential would be gone and so would the fear and skepticism that Bitcoin = tulip mania. In that context, cryptocurrency could provide central banks with better risk-minimizing features than what gold already offers.