Kriegsspiel wrote: ↑
Wed Mar 24, 2021 11:11 am
It seems like the competition for fedcoin is banks and payment processors.
Well, I guess it's a competitor to BTC in the sense of being different currencies. But if BTC is digital gold, a defense against the dollar devaluation, then how does making the dollar digital make it compete better against BTC?
I always find digital money at a fundamental level to be quite amazing. So much so that it is almost hard for me to get my head around it. I've used the example a couple of times of tapping my phone on a piece of plastic and walking out with real stuff...that really is amazing I think.
Putting speculation aside, I've read a lot about the real and useful commercial purposes of secure digital currencies. I've read very little that says BITC is it due it's limitations. Not a popular statement on the board, but if one would just step back and ask themselves the question why have all fixed amount currencies been abandoned openly, without political bias, and look for the answer then the same applies to both gold and BITC.
If your statement/question is what you are looking for, then the digital dollar isn't going to be it as I imagine inflation will be part of the scheme if/when needed for macroeconomic purposes...but if you dive into it deeply you will discover that gold is not that great a defense against inflation. IIRC there's no correlation statistically. (I could be wrong. Don't think I am...but I should say my memory could be bad.) However, noncorrelation in the context of a portfolio is a good thing so for me that's why I like it in the PP. It's way too early to know if BITC will be a good inflation hedge or not. I'll be dead before that is known with any statistical validity. Right now it's pure speculation that it might be.
I suspect there will be some very fierce opposition to a government backed digital currency if it puts at risk some of the current financial mechanisms currently in place like credit cards, pay pal etc. Going back to money...imagine if we went back 50 years and there was this guy between you and the cash register clerk who told you (or the merchant) that they had to give him .02 for every 1.00 or the transaction wasn't going to happen. As a consumer, that two cents is a good deal in that it is known payment will occur conveniently with some fraudulent transaction insurance baked in. However, is that insurance worth 2% of every transaction. IDK, that's the real question. Can you get the same security for less in fees? If you can, then eventually whatever does that will butt out the current players or they will have to lower fees to compete.