Post
Topic
Board Economics
Re: Thoughts on CBDC's and long-term effect on the cryptomarket
by
tadamichi
on 11/07/2022, 16:44:49 UTC
This makes we wonder how these two polar opposites will co-exist, and what long-term effects it will have on the market.
It depends on how extreme the cbdc is going to be. I also think cbdcs are coming, because otherwise fiat could likely collapse. This system is more fragile than ever, so they don’t really have an alternative to complete control, if they wanna keep it alive. This is just a worse form of money that won’t survive forever, as it can’t enable free trade and has the worst monetary properties you could think of, from an economic perspective.

Flirting with tyranny has its own cost tho and central planning will never work in the long term(or it would’ve already, it’s just destructive and doesn’t benefit people), cbdcs won’t change anything about that. If they can’t provide an alternative system where people can prosper freely, this would just buy them time before they get replaced.

Bitcoin will easily co-exist with any system that could be in place, you can’t really stop or forbid it, because it’s too decentralized. So people will always have an alternative where they can transact freely, in times of cbdcs this could draw more people to Bitcoin, no matter if it’s allowed or not. More and more people could realise the advantages of having a free, independent form of money, driving adoption up. When the time of cbdcs ends, Bitcoin could have so many people on it’s side, that it could be chosen as the new monetary system by people. This can be seen as a chance to prove itself and a really good solution to the underlying problem cbdcs tried to solve in the first place.

In the end it’s a question of, can a broken system be kept alive forever with more control, or will an actual solution take over? To me the first option seems unrealistic, so it’s a matter of what comes after it.