Post
Topic
Board Bitcoin Discussion
Re: Could bitcoins ever replace conventional money?
by
Brangdon
on 09/02/2014, 16:25:42 UTC
Can bitcoins replace conventional money? No, for the simple reason that governments will never accept bitcoins for paying taxes.
Why not?

If bitcoin is seen as the better currency, vendors will want to be paid in it, so they'll offer lower prices to people who pay in bitcoin. (Their freedom to do that is why Gresham's Law doesn't apply.) Then employees will want (some of) their salary to be paid in bitcoin, because it will have more spending power and be less subject to inflation. This applies to government employees also. The government with then have a need for large amounts of bitcoin to pay its employees and suppliers, and it will make sense for them to accept bitcoin in taxes as a way of getting it. The same logic applies to them as to anyone else.

Do you imagine a future in which the only role for dollars is paying taxes, and only government employees get paid in dollars? It so, I guess it will suck to be a government employee.