Cryptocurrency: BitcoinMag Exposes Itself and Bitcoin

grarpamp grarpamp at gmail.com
Tue Dec 28 18:57:45 PST 2021


How Bitcoin Will Conquer The World

https://bitcoinmagazine.com/business/how-bitcoin-will-conquer-the-world

The decentralized currency has, in just a bit longer than a decade,
risen to the potential of becoming the world’s system of value...

On Halloween 2008, a month and a half after the Lehman Brothers’
spectacular collapse, Bitcoin started the monetary revolution we’re
now seeing. Bitcoin showed that, with technology, different monetary
arrangements are possible: Money doesn’t need to be controlled by a
government or limited to a sovereign territory.

Thirteen years later, and after repeatedly renewing all-time highs
despite bans and curses, Bitcoin is here to stay. Perhaps not exactly
as the “peer-to-peer electronic cash system” envisioned by Satoshi
Nakamoto but neither as a wasteful speculative asset with no social
value. Bitcoin can instead be the settlement currency of the world.

The potential for Bitcoin to be used as an international payments
system has always been there. It brings, in its core, an ironclad
decentralized infrastructure that can process and record transactions
happening all over the world, aka the Bitcoin blockchain.

In about a decade, and without a central authority coordinating
efforts, channeling investments or establishing partnerships, Bitcoin
created a global network that is always available for anyone with
access to a smartphone or a computer. For perspective, it took Visa
several decades, countless business agreements, and a massive
investment of money and talent to develop the amazing network used
today by billions of cardholders.

The downside is that bitcoin, the network native money, is still
volatile. Bitcoin may be attractive to investors looking for increased
returns but can give pause for those who want to use their money to
pay rent and buy groceries. Bitcoin’s volatility thus limits its
general appeal and, in turn, its use as a largely accepted medium of
exchange that can facilitate everyday transactions.

On the other hand, the very features that bring volatility to bitcoin
— the absence of backing and of a managing issuer — also allow it to
offer what no other currency, public or private, can offer today: the
seamless transferability across borders and jurisdictions. A bitcoin
can travel the world through different digital wallets while a bank
customer figures out how to initiate a foreign exchange transaction.

How then to reconcile these conflicting characteristics so that
bitcoin can function as a bona fide global currency? First, by
welcoming speculators, not vilifying them. People and institutions
willing to make a quick gain by buying and selling bitcoin not only
bring liquidity to the bitcoin market but help to form bitcoin prices
and (counterintuitive as it may seem) to reduce extreme price swings.
The more people trade bitcoin, the more predictable bitcoin becomes.

More than that, the Bitcoin network is transactional in nature, a
“peer-to-peer electronic cash system,” not just a safe place to store
valuables. Under this light, bitcoin can be seen more as a monetary
vehicle for global change, enabling anyone, anywhere to send or
receive money, rather than as digital gold bars carefully kept away
from view.

The second step toward improving the use of bitcoin as a global
currency is to have as many trustworthy exchanges as possible standing
ready to buy and sell bitcoin in different jurisdictions. Unhosted
wallets are certainly invaluable for those looking for monetary
privacy who are also sophisticated enough to create and take good care
of their digital wallets and private keys.

For the non-tech-savvy persons, whose main goal is to make safe, quick
and cheap international transfers and remittances, what matters most
is to find a reliable custodian that can help them easily meet their
needs. And that’s what credible exchanges can do, notably those with
an international presence that are able to receive local currency in
one country, move bitcoin across borders, and deliver local currency
in another country.

Under these circumstances, Bitcoin could become a powerful option not
only for international senders and receivers but also for regulators.
As bitcoin can quickly move from one digital wallet to another, no
matter where they are, senders and receivers don’t need to face
volatility. In a liquid market and with exchanges open 24/7, they can
buy in and out of bitcoin as soon as the international transaction is
completed — which means “in minutes,” not days, as happens in the
current correspondent banking system.

The volatility would be left for those investors and speculators in
the origin and destination countries willing to face more risks in
search of higher returns. Speculation could, therefore, subsidize
international payments. And the exchanges in both of these countries
would take care of moving the bitcoin around and providing each
counterparty with their preferred exposure, be it sovereign money
(senders and receivers) or bitcoin (investors and speculators).

Regulators, in turn, would be able to follow in real time the domestic
and international flows of money regardless of their jurisdiction, as
all transactions are recorded in the Bitcoin blockchain. With the
intermediation of exchanges, which would be responsible for
identifying buyers and sellers, cross-border payments with bitcoin can
offer a neutral, resilient and compliant alternative with lower
transaction costs. No other solution, public or private, can beat
that.


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