Bitcoin is a technology that makes our life easier. It does not melt in the face of inflation like fiat currencies. It frees us from the bondage of banks, as it allows us to transfer money without the need for third parties. It has great features.
- However, despite being a new technology, it has very high energy consumption. However, everyone would like it to consume less energy.
- Also, it has been known and traded for years but still has very high volatility. With this appearance, it scares new investors. Because everyone expected it to have a more balanced price performance.
- World history is full of wars. Perhaps we are living through one of the best periods in history. But because of us homosapiens, our world is very prone to chaos. Coins that do not have an armed force behind them, such as Bitcoin, may be a little unlucky in this regard.
I think these three problems may not be solved and these three problems may prevent bitcoin from being a reserve currency.
What do you think about the subject? Can you share some enlightening information for me?
It's highly unlikely Bitcoin or any cryptocurrency could ever achieve this status, not least because the USA gets a lot of perks from hosting this status and would put up an incredible fight before they relinquish it. They're more likely to ban cryptocurrency outright if the idea of this threat were to ever become real, that would naturally prevent it from happening as they are one of the largest and most dynamic economies in the world. There is another issue that is more likely to prevent it from happening - Bitcoin is too inflexible, sure you can go to infinite decimal places, but that kind of defeats the supposed "zero inflation" ability and the transaction ability is simply not fast enough, plus there will be the ever present danger of a 51% attack or other vulnerability.
Instability alone is in contrast with the concept of a currency reserve. Anything which market price is changing from time to time, is a no-no for savings or reserve as termed in this topic. If it is reserve, you are not seeking for profit potential but rather, security of funds and stability if not upward market price movement. But as long as there is risk of a downfall with its price, then that is already something to consider not to. Zero inflation? it won't be aided that way. With regards to transactions, there are many rooms for improvement because right now, transactions ruch through numerous chains in order to be sent which makes it slow. But as this industry is expanding over years, such feat would be solved afterwards. It is just volatility of this asset which is the bottomline.