Bitcoin, as a currency, will lead to an economic crisis

    I'll start with the good. Bitcoin has one major advantage - the speed of payments.

    Yes, it’s speed. Someone may object: “how is it that I pay by card instantly, and then I have to wait 20-30-40 minutes for the transaction to fall into the block and confirm it.”

    But that's not quite true. When you pay with a card, the store agrees to give you the goods “on credit”. In Russia, he will receive a refund for your goods only on the next business day, and even then the banks themselves will credit such a store, since the movement of money in international payment systems occurs only on the third business day. In Europe, even that may be longer - for example, a refund once a week.

    Agree, 30 minutes and a few days - this is a significant difference.

    The same swift payments go several days. Imagine that you can only ship the goods after you pay the supplier - i.e. you have to cover the cash gap from your pocket. And so all modern payment systems work.

    As evolving from a barter economy to increasingly complex monetary systems, transaction costs and total distribution costs decrease. The less time we spend on transferring money, the lower the transaction costs. And here, just bitcoin wins compared to conventional transfers between accounts.

    But, nevertheless, Bitcoin is not a means of payment, and here's why: its main problem is the limb of emission embedded in it.

    With the growth of the economy, the money supply should grow.

    For example, we replace the ruble in the country's economy with bitcoin and this is what we get: Suppose that there is 1 bitcoin in circulation and you can buy 1 loaf of bread for it. Production is growing and the baker can already offer 2 loaves of bread, but only 1 bitcoin is in circulation. Those. for 1in Bitcoin you can already buy 2 loaves of bread. So what will the owner of bitcoin do? He will wait tomorrow or the day after tomorrow, when he can buy 3-4-5 on his 1in bitcoin, etc. loaves of bread. He will not spend.

    Such a process is called deflation in the economy - and it is destructive. Consumption is falling, factories are closing, unemployment is rising - the economy is entering a recession and falling into crisis.

    This is where the state comes to the rescue - it prints more money. In general, central banks are trying to maintain an acceptable level of inflation, stimulating the population to spend. No matter how sad it may sound, inflation needs the economy.

    Bitcoin has finite emissions, moreover, the costs of issuing new coins are quite high.

    No matter how much I hear the slogans that Bitcoin can be divided almost endlessly and it will be enough - this will not solve the deflation problem.

    The slogans that we no longer need banks are also erroneous. In order for the economy to grow, it is necessary to invest savings.

    Banks do this much better for us, while diversifying their portfolios. Those. banks share risks. For example, they give out loans to a million people, and not to one. Which significantly reduces the risk of losing all funds at once if this one
    person does not repay the loan.

    If everyone starts to store the currency in their own wallet, investments in the economy will decrease, which will also lead to a recession and another crisis.

    If we consider bitcoin as a kind of currency for international payments, then the finiteness of bitcoin emission here also plays a decisive role. The world economy is growing, therefore, to maintain it from year to year requires more money supply.

    To summarize: Bitcoin and similar cryptocurrencies will remain the means of speculation and nothing more until a better breakthrough occurs. After all, there are positive features - this is the same speed of operations.

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