Quote from: Patrick2t2 on December 27, 2021, 10:26:32 AM

'The dollar is no longer relevant; Bitcoin is the currency of the future,' argues President Nayib Bukele of El Salvador.

In a recent interview with the BBC, El Salvador's President Nayib Bukele declared that Bitcoin represents the "real revolution" taking place in our world right now, and that the days of "fiat currency" are drawing to a close. Then he went on to say that El Salvador was the spark that ignited the actual revolution. With the adoption of Bitcoin as legal tender in September, El Salvador became the world's first country to do so.

I'm interested in hearing your thoughts on the matter. What types of changes do you expect to take place?

In the short term, there will be volatility in the price of bitcoin - there is no doubt about that. It is not a currency substitute in established economies as an US, EU, China, India, Japan and some other stable economies. For states on the verge of failure (or have already failed) Bitcoin is a hedge to hyperinflation, because their local currency is worthless anyhow (Venezuela, I'm looking at you).

In the article I wrote a couple of months back here https://www.finlightened.com/is-the-world-adopting-bitcoin/ I have talked about why El Salvador has chosen to adopt Bitcoin - it is primarily to save money on remittance fees. A significant chunk of their population depends on remittance from the US, and savings on FOREX transfer fees can be huge for them. El Salvador doesn't have a recent history of hyperinflation, so it isn't necessarily facing a currency crisis.

As an asset class, Bitcoin is already a viable option, as holding cash while the Fed prints money is not wise. Gold is a trusted asset where people put their money, and Bitcoin has been taking away some of that asset allocation away from gold. Millennials love bitcoin, and in the next few years if millennials and gen Z choose Bitcoin over gold, Bitcoin will replace gold. Bitcoin is easy to invest in, easy to 'carry' internationally, doesn't cost anything to maintain.. it looks like a winner if the network effects kick in, and an entire community puts their trust in and accepts bitcoin.

Bitcoin and other cryptocurrencies have made international transfers so easy, that it can well challenge the dollar as the 'world's currency', at least when it comes to cross border transactions.
Whether it can replace the US Dollar in the US, I believe we are far away from that being a reality anytime soon.