Quote from: d5000 on August 20, 2021, 11:27:50 PM

Quote from: RainbowKun on July 26, 2021, 12:57:47 AM

2040~2140. Bitcoin standard exchange system. All fiats in the world would employ Bitcoin as the anchor, to set up a new global currency and finance structure on the foundation of Bitcoin.

I can imagine such a system, but only "with a twist".

The gold standard was based on the assumption that any central bank would hold enough gold to be able to exchange the currency to gold, on the established exchange rate. caryoskar already cited one of the shortcomings of this system: it is inflexible. This means that if you have a growing economy but the central bank can't expand its gold holdings for some reason, you will run into deflation, likely affecting the growth. And if the gold price has swings, this will affect your currency too.

A Bitcoin standard however could work if:

1) the liquidity of the Bitcoin markets is high enough that the Bitcoin price itself is relatively stable. This is easier than with gold, because in the case of gold there could be events (discovery of new gold ore) where the supply/demand curve gets out of balance. This cannot happen with Bitcoin; the only possible event is that an early miner like Satoshi could sell his coins all at once, but this danger is limited (once these coins are sold, they're better distributed, and it's likely that the price can re-stabilize fast).

2) there are enough ways to activate the economy without having to recur to the "money printing press" (QE and similar expansive mechanisms). This can be done with alternative currencies (altcoins and traditional alternative currencies, like the Swiss WIR franc), Bitcoin certificates and Bitcoin-based stablecoins as temporary "expansion" means outside of BItcoin itself, or through "direct economic collaboration" which can be facilitated through the internet; i.e. that in low liquidity phases people could directly exchange things and services according to the needs (demand) and the supply. The shortcomings of traditional bartering, which made it inefficient compared with "money-based exchange" can probably be solved with sophisticated platforms.

The second part is the "twist", it is maybe unorthodox because it would in some way expand the "monetary supply", but it would be a condition for the system to work well. It gives the economy always room to grow.

Yes, this summary of yours is very good. This is a new world currency system that is entirely possible for us in the future to be Bitcoin-centric. In this Bitcoin system, the role of Bitcoin is not only the role of currency payment, but more importantly, the role of value storage. Humans store wealth and value in the form of Bitcoin. Only Bitcoin is the value carrier recognized by the people all over the world. Then use Bitcoin as the value anchor to build various derivative ecosystems.