Conclusion
These are the issues at the heart of Bitcoin's monetary conundrum. For it to become usable as money its price must stabilize. For it to stabilize it must be able to expand and contract, under collateral agreements, according to ordinary monetary demand. But this drives a bus through its principles.
Moreover, those same collateral agreements demand that someone sits on the debt side of the score-keeping system, which no-one wants to do while the price is going up. And if finally someone extremely brave decides to step in and take the debt then the price will stall, and encourage thousands of twitchy Bitcoiners to sell, all at once, automatically bursting its bubble. It's in a catch 22 of its own design. In the long term, as it is, Bitcoin can't truly work as a stable form of money.
Moreover, those same collateral agreements demand that someone sits on the debt side of the score-keeping system, which no-one wants to do while the price is going up. And if finally someone extremely brave decides to step in and take the debt then the price will stall, and encourage thousands of twitchy Bitcoiners to sell, all at once, automatically bursting its bubble. It's in a catch 22 of its own design. In the long term, as it is, Bitcoin can't truly work as a stable form of money.
Nevertheless it has done us all a very useful and overdue service. It shows us that while we have liberty we can make the choice to stop using whichever money government is seeking to over-tax and over-regulate, and find our own way of keeping score. And for so long as the Bitcoin music plays, anyone can mimic the old fashioned buccaneers and smugglers who exchanged goods and services in their occasionally illicit deals, tax-free and un-pestered, on the fringes of society.
Source: Gold News - Is Bitcoin Money?
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Comments
I think Silver and Gold are good investment choices. Poused to go up and you have something tangable in case the SHF.