Bet 846

Duration 9 years (02020-02030)

“Bitcoin will not become the world's single currency by 2030.”

Saikat Chakrabarti


Chakrabarti's Argument

In 2018, Jack Dorsey, CEO of Twitter, made the prediction that Bitcoin will become the world's single currency in about 10 years ( I am predicting that this will not be the case for multiple reasons. There are, as I see it, three potential paths for Bitcoin to become the single worldwide currency. The first path is for some nation or set of nations to agree to make Bitcoin their national currency, and for it to grow from there, eventually becoming the national currency of every country and therefore bringing the world into a monetary union, similar to the EU, but with Bitcoin as the currency. I do not see this ever coming to pass. Countries rely on central currencies to actively grow and develop their economies. Even in the case of the EU, a European Central Bank exists to provide new currency to member states. Without the ability to create new currency to keep up with the demands of an economy that is producing more and more, the economic growth of countries get artificially restricted, as has been the case in the past when the gold standard was used as the backing for central currencies. The decentralized nature of Bitcoin makes it impossible for countries to create new currency to spur economic development and removes many other monetary and fiscal tools available to countries today to develop their economies. I do not believe any country would willingly give those up, nor should they if they do not want their economies to regress. The second path is for Bitcoin as it currently exists to continue to grow organically until it is so big, that a majority of people worldwide begin transacting in it. In this scenario, nations would still have their own currency, but practically speaking, Bitcoin would be the largest currency in the world. In this scenario, Bitcoin is already not the world's single currency since other currencies continue to exist because countries continue to create their central currencies (for reasons stated above), and so my prediction has come true. But I separately do not believe Bitcoin can even become the currency the majority of the world transacts in because its very nature keeps its supply constrained. Therefore, as long as people have faith in central currencies (which will be the case as long as nations continue to exist), the supply of central currencies will outpace the supply of Bitcoin and continue to overtake it as the majority currency. The third path is one in which nations have essentially ceased to exist due to some doomsday scenario and so new, organic currencies are used to transact in the absence of national currencies. There is, I accept, a small chance that there is a total global collapse in the next decade leading to the loss of faith in all current currencies and so new currencies arise organically just as a means of transaction. But even in this case, I do not think Bitcoin will be the new single currency. For one, it is hard to imagine the infrastructure of the Internet, on which Bitcoin relies, continuing to exist without issue without national governments existing to protect it. Second, Bitcoin is an inherently deflationary currency, so the incentive with Bitcoin will always be to save rather than spend the currency, making it a bad transactional currency. Furthermore, in an end-of-nations scenario like this, there will be no authority large enough to cause a currency to become the single currency worldwide. It's much more likely that multiple currencies will arise, and perhaps Bitcoin could be one of them even though its deflationary and non-physically durable nature makes it a poor choice.

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