Not sure if FOMO, but central government abuses seem to have found yet another competitor.
Hundreds of thousands of transactions in US dollars occur all around the world every second of every day. Bitcoin can't even handle the currency transaction needs of a large shopping mall. The bitcoin blockchain is limited to about 7 transactions a second.
A cryptocurrency of some sort may eventually become a threat to the US dollar but bitcoin is clearly not it.
That's the main chain only; Lightning Network and side chains have no such limitations. There are over 36,000 lightning channels that can clear bitcoin transactions without using the main blockchain.
In a shopping mall scenario, most people would already have open channels with their favorite stores, similar to how store credit cards work today.
A cryptocurrency of some sort may eventually become a threat to the US dollar but bitcoin is clearly not it.
If it's going to happen, bitcoin will most certainly be it. The dollar is starting to lose its place as the world's reserve currency; Russia, China, Iran and other countries are cutting side deals to use currencies other than the dollar when they can [1].
Sure, smart people will continue to buy their morning coffee with dollars but they won't be saving for a rainy day in dollars.
The Fed has already printed trillions and trillions of dollars, with no end in sight; it's just a matter of time before we have either negative interest rates or noticeable inflation or both. Regardless, it's losing its buying power daily.
That's why a company like MicroStrategy borrowed $550 million at 0.75% to buy more bitcoin—and that's after a $425 million purchase a couple of months ago. Mass Mutual—an insurance company—just bought $100 million in bitcoin [2].
These and other companies wouldn't have done this if they were confident that the dollar would retain its value.
It looks like the beginning of a speculative attack, which was predicted 6.5 years ago [3].
[1] https://www.lynalden.com/fraying-petrodollar-system/
[2] https://www.kevinrooke.com/post/microstrategys-bitcoin-debt-...
[3] https://nakamotoinstitute.org/mempool/speculative-attack/
In that sense, I see bitcoin as a more robust store of value than fiat currency.
To quote @Travis_Kling:
Bitcoin is a non-sovereign, hard-capped supply, global, immutable, decentralized digital store of value. It’s an insurance policy against monetary and fiscal policy irresponsibility from central banks and governments globally.
Both decentralized and centralized technologies (Lightning and Liquid) for instant payment are maturing, so in the future there will be more means to trade Bitcoin instantly off-chain.
Privacy improvements like CoinJoin continue to be implemented, so the future will provide more means to conduct private transactions.
- buying and holding actual coins feels feels like investing in other nonperforming assets, like other currencies, or art, or gold
- the world does seem to need / want a decentralized store of value that bitcoin provides
- if you are worried about fiat currency, then just don’t hold most of your wealth in currency, just keep enough float to cover expected transactions
- bitcoin seems horrible for actual transactions, as others have stated, it can do very small number of transactions per day
- some other crypto currency will nail the online transactions part, when that happens, that will be super interesting
The real value is once we get the cross blockchain projects that facilitate transactions between different blockchains. That will unlock the true value of all block chains, as they will be interoperable.
However I do not believe that bitcoin itself will be that currency, for the simple reason that people are hoarding it, schilling it, and gambling with it rather than actually spending it.
Fiat currency is going to be around for while.
The only thing bitcoin is really effective at is speculation and manipulation by unregulated exchanges.
