It may not be that appealing for a dollar/euro economies, but for emerging markets where their currency is not that stable and average inflation is around 3-5% it could have great potential.
If I were to work in Argentina I would rather get paid in BTC than ARS, due to liquidity constrains. I would probably convert most of the money to USD, EUR o CHF, but I would keep some bitcoin if I had where to spend them.
BTC is not an investment for stability [1]. And the OP is still asking a valid question, why pay BTC when that's several extra steps rather than pay debt or credit?
Mass adoption of bitcoin would certainly lower volatility, however bitcoin won't be massively accepted until volatility gets lower. It's a catch 22 game. So you are right, bitcoin doesn't seem such a good option for now, I was thinking a little bit down the road.
Do you mean like a currency that was worth $650 against the US dollar a year ago, and today is worth $250 against the US dollar? That kind of stability?
Right, the Argentina straw man. Worst inflation example you can find is the Argentina peso, and it's lost 10% in a year where the bitcoin dropped 63%, and bitcoin's volatility over the same time period has been much, much higher.
Even the most mismanaged government manages its currency. No one is managing bitcoin, it's price reflects the volatile market whims of a cryptocurrency backed by nothing but computation and beset by fraud. The volatility is not going away.
I don't ser bitcoin right now as a tool for savings, maybe for transactions.
Lets say you work from Argentina for a company abroad. You have three options to get paid:
1. Wire transfer, the compay send you dollars or euro and you get pesos at the oficial rate.
2. There is always people trying to pay things outside, you can give him your dollars outside in exchange of dollars inside arg por pesos at the blue rate.
3. Buy bitcoins outside sell inside.
1. You lost 30% exchange rate, you will not be able, to buy dollars back at the oficial rate.
2. Is 3%
3. Is 10%
Since 2 and 3, are not 100% legal, you will have problems buying things since you cant justify your income.
Argentina, Venzuela, Russia, Ukraine, Sudan, Belarus... I haven't done the math, but we are probably talking about a couple of hundred million. If they all adopted bitcoin, it would probably become the 5th or 6th currency by people using it in the world.
>Even the most mismanaged government manages its currency.
Governments don't manage currencies.
>No one is managing bitcoin,
No one managed gold when all currencies were gold backed and it did not see bitcoin's price volatility.
>it's price reflects the volatile market whims of a cryptocurrency backed by nothing but computation and beset by fraud.
I know what a Central Bank is and how they are supposed to work. Check this out: Who owns the Federal Reserve? [1]
>As the nation's central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.
If you include the very next paragraph, it is clear that the US federal government manages the Federal Reserve.
> However, the Federal Reserve is subject to oversight by the Congress, which often reviews the Federal Reserve's activities and can alter its responsibilities by statute. Therefore, the Federal Reserve can be more accurately described as "independent within the government" rather than "independent of government."
The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation's central banking system, are organized similarly to private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
Well, then we both know what we are talking about. Do governments manage currency? Yes and no. On paper they don't, in reality they have a lot to say about a country's monetary policy. However, if you look at the world's second strongest currency, the Euro, it's apparent that the European government doesn't have that much control.
I wouldn't be saving in US Dollars, they conder all US dollars their proterty so if they ever had the chance to intercept your money and did take it, they would feel justified keeping it because it was theirs to begin with.
There was a case where a money transfer was seized between two european countries over Cuban cigars because at the time, the US had a trade embargo against Cuba.
Why shouldn't you invest in Bitcoin for savings? Look at a one month chart. Or look at a three month chart. Or look at a one year chart. Or look at a chart from the beginning of bitcoin and ask yourself: "is this what I want the value of every dollar in my savings to be worth?
