Will Bitcoin Replace the Dollar
Summary
TLDRThe video script explores the potential of Bitcoin to replace the euro dollar system, emphasizing the need for a more efficient and sustainable currency standard. It discusses Bitcoin's advantages, such as eliminating the need for banks and its limited supply promoting economic efficiency. However, it also highlights challenges, including Bitcoin's volatility and focus on being a store of value rather than a medium of exchange. The speaker expresses hope for Bitcoin's success, urging a shift in focus towards improving its utility as a medium of exchange and addressing issues like elasticity to truly compete with the euro dollar.
Takeaways
- 😀 The speaker suggests that Bitcoin's potential lies in its ability to replace the euro dollar system, which has been unstable since 2007.
- 💡 Bitcoin represents a hard money advocacy, appealing to those who believe in limited currency supply to promote economic efficiency.
- 🏦 The script argues that Bitcoin's innovation eliminates the need for banks as intermediaries, as it operates on a transparent, shared ledger system.
- 🌐 The euro dollar system is criticized for its extreme elasticity, which has led to financial instability and a lack of focus on intermediation.
- 💰 The speaker highlights Bitcoin's role in addressing the euro dollar's issues, such as asset bubbles and economic crises.
- 🔑 A key advantage of Bitcoin mentioned is its potential to reduce financialization and inefficiencies by forcing users to earn access to money.
- 🔄 The script discusses the importance of elasticity in currency and questions whether Bitcoin's limited supply can serve as an effective medium of exchange.
- ⏳ The speaker expresses frustration with Bitcoin's focus on being a store of value rather than a medium of exchange, which they see as a missed opportunity.
- 📉 The volatility of Bitcoin is noted as a significant issue, leading to the rise of stablecoins as an alternative.
- 🌟 Despite criticisms, the speaker maintains high hopes for Bitcoin and digital currencies, provided they can address the issues of elasticity and functionality.
Q & A
What is the main issue with the euro dollar system according to the script?
-The main issue with the euro dollar system is that it has become too elastic, leading to a breakdown in its function as a reserve currency. This has created an opportunity for a competing currency standard that could potentially perform better.
What is the allure of hard money advocacy like Bitcoin and gold as mentioned in the script?
-Hard money advocacy is appealing because it suggests that with a limited supply of currency, people must compete and earn their money, which theoretically leads to a more efficient economic system without waste and asset bubbles.
Why does the script suggest that Bitcoin could be a solution to the euro dollar system's problems?
-Bitcoin is seen as a solution because it represents a hard money approach, aiming to eliminate the issues associated with extreme elasticity in currency, such as waste and inefficiencies, and to promote a more sustainable economic system.
What is the significance of Bitcoin's ability to function without banks as discussed in the script?
-Bitcoin's ability to operate without banks is significant because it demonstrates a shift from traditional banking systems to a more transparent, shared, and accessible ledger system, which could potentially increase efficiency and reduce the need for intermediaries.
How does the script view the role of intermediation in the economy?
-Intermediation is viewed as a crucial function in the economy, responsible for the redistribution of money and credit. The script suggests that when intermediation is done properly, it can lead to a more productive and efficient economic system.
What is the script's stance on the limited supply of Bitcoin and its impact on the economy?
-The script suggests that Bitcoin's limited supply could heighten intermediation and efficiency, potentially eliminating the business cycle. However, it also acknowledges the historical tendency for people to seek elasticity in monetary systems when they become too restrictive.
Why does the script argue that Bitcoin should focus more on being a medium of exchange rather than just a store of value?
-The script argues that Bitcoin should focus on being a medium of exchange because it will demonstrate its usefulness and utility, which is essential for widespread adoption and success. Waiting for the dollar to fail as a store of value is seen as a passive approach that misses opportunities for growth and development.
What is the issue with Bitcoin's price volatility as mentioned in the script?
-Bitcoin's price volatility is an issue because it hinders its use as a stable medium of exchange, leading to the proliferation of stablecoins as an alternative. This volatility is seen as a barrier to Bitcoin becoming a widely accepted currency.
How does the script view the potential of digital currencies to replace the euro dollar system?
-The script views digital currencies, including Bitcoin, as having the potential to replace the euro dollar system if they can demonstrate better performance as a medium of exchange, address issues of elasticity, and adapt to a dynamic economic environment.
What is the script's final verdict on Bitcoin's future and its ability to replace the euro dollar system?
-The script maintains a hopeful outlook for Bitcoin and digital currencies, provided they can overcome challenges related to elasticity, volatility, and the need to serve as a more effective medium of exchange. The potential for Bitcoin to replace the euro dollar system is seen as possible but not guaranteed.
Outlines
💡 Bitcoin's Potential to Replace the Euro Dollar System
The speaker begins by questioning whether Bitcoin could surpass the dollar, suggesting that a more pertinent issue is whether it could replace the euro dollar system. The euro dollar system, which faltered in 2007, has created an opportunity for a new currency standard. Bitcoin, with its hard money characteristics, is seen as a potential contender due to its limited supply and the need for economic efficiency. The speaker also touches on the allure of hard money and the inefficiencies of the current financial system, hinting at the possibility of eliminating business cycles through hard money policies like Bitcoin.
🚀 Bitcoin's Advantages Over Traditional Banking
The second paragraph delves into the benefits of Bitcoin, particularly its ability to operate without the need for banks. The speaker explains that the current financial system largely relies on ledger money, where banks act as intermediaries. Bitcoin, with its blockchain technology, offers a more elegant solution by providing a transparent, shared ledger accessible to all, thus eliminating the need for banks. The speaker also discusses the problem of intermediation in the euro dollar system and how Bitcoin's hard money approach could potentially address these issues by forcing economic actors to earn their access to funds.
🌐 The Need for Elasticity in Currency Systems
In the third paragraph, the speaker addresses the concept of currency elasticity, arguing that a limited supply of currency, like Bitcoin's, could heighten intermediation and efficiency, potentially eliminating the business cycle. However, historical monetary systems show that strict money standards are rarely maintained as people always find ways to create elasticity. The speaker points out that Bitcoin's focus on being a store of value has overshadowed its development as a medium of exchange, which is crucial for its success. The speaker also criticizes the belief that Bitcoin will succeed simply by waiting for the dollar to fail, emphasizing the need for Bitcoin to prove its usefulness as a medium of exchange.
🔄 The Importance of Medium of Exchange in Currency Systems
The final paragraph reinforces the importance of a currency's ability to act as a medium of exchange. The speaker argues that Bitcoin's limited supply and price volatility have hindered its adoption in this role, leading to the rise of stablecoins. The speaker, who is a trustee of a stablecoin, suggests that Bitcoin needs to focus more on becoming a useful medium of exchange rather than solely a store of value. The speaker concludes by reiterating their high hopes for Bitcoin and digital currencies, provided they can perform the necessary functions and adapt to a dynamic economic environment, which is crucial for replacing the euro dollar system.
Mindmap
Keywords
💡Bitcoin
💡Euro dollar system
💡Hard money advocacy
💡Business cycle
💡Intermediation
💡Money creation
💡Medium of exchange
💡Store of value
💡Elasticity
💡Deflation
Highlights
The euro dollar system's breakdown in 2007 has paved the way for a competing currency standard.
The euro dollar's elasticity was initially adaptive but became too loose, leading to the allure of hard money like Bitcoin.
Hard money advocates believe in earning money through competition rather than it being freely printed.
A limited currency supply promotes a more efficient economic system, potentially eliminating asset bubbles and business cycles.
Bitcoin aims to eliminate the inefficiencies and political extremes associated with the euro dollar's extreme elasticity.
Bitcoin's transparency and shared ledger system could replace the need for banks as intermediaries.
The dollar system has been largely virtual and distributed for over a century, contrary to popular belief.
Bitcoin's innovation addresses many inefficiencies within the euro dollar system.
The limited supply of Bitcoin is seen as a way to heighten intermediation and efficiency in the economy.
The euro dollar system's problem was the mixing of money creation with intermediation, leading to financialization.
Bitcoin's proponents argue for a hard money system to avoid the waste and inefficiencies of an elastic currency.
The public's appetite may swing towards hard money systems like Bitcoin as a reaction to the euro dollar's issues.
Bitcoiners often view the Fed as the culprit for printing money, which is a misconception.
Bitcoin's focus on being a store of value may be misguided; it should prioritize being a medium of exchange.
The euro dollar became dominant not because of its store of value but because it was an effective medium of exchange.
Bitcoin's price volatility has led to the rise of stablecoins, indicating a need for a more stable medium of exchange.
Human history shows that strict money standards are unsustainable as people always find ways to create elasticity.
Bitcoin's success may lie in becoming a more elastic and useful medium of exchange rather than just a store of value.
The speaker maintains high hopes for Bitcoin and digital currencies to replace the euro dollar system.
Transcripts
will Bitcoin overtake the dollar the
more appropriate question is whether or
not it can replace the euro dollar
because ever since the euro dollar
system broke down in August of 2007 it
has left the door wide open for some
competing currency standard that can do
a much better job at the roles of a
reserve currency now the euro dollar
represents maybe the other side of the
spectrum from Bitcoin not maybe it
actually is in that it is highly elastic
in fact it was too elastic now while
that solved a specific set of problems
early on it was adaptive it was
responsive it was flexible to the
dynamic World in which it was trying to
serve
you can see the Allure of the hard money
advocacy like Bitcoin like gold in the
breakdown of the system the crisis the
aftermath of 2007 and 2008. now hard
money advocacy I think we are all hard
money Advocate Advocates at heart
because what it basically says is that
when you have a limited supply of
currency you have to compete for you
have to really earn your money it's not
just given out freely by the printing
press wherever that printing press might
actually reside and because we all have
to earn our money we have to earn access
to money that means that the economic
system itself is much more efficient
we're not wasting time and effort on
financial sometimes useless Financial
tasks we have more time and more focus
on the most productive efforts that
create first of all we have a more
productive and sustainable economic
system and one that is in theory free
from the Affliction of asset bubbles and
if we don't have acid bubbles in all
this waste and stupidity during the boom
part of the cycle then maybe we don't
have the major crisis that leads to the
downturn maybe we don't even have the
business cycle to begin with can we
eliminate the business cycle altogether
with strictly hard money that's the
attempt that's what Bitcoin is really
focused on to eliminate some of the
stupidity and as well as the political
extremes that go along with extreme
elasticity in the euro dollar format and
to get the economy back on track with a
useful sustainable hard money like
currency system the question is whether
bitcoin's on the right track and whether
it can actually Dethrone the euro dollar
system and in whether in doing so it can
replicate all of the things that the
euro dollar actually did well because
there were quite a lot of them
now we're going to talk about Bitcoin
today but I want to do mention I do want
to mention that my own perceptions and
my own views are have been developed
through studying the euro dollar system
as it actually is and that's something
that we offer at euro dollar University
through our memberships we go through
the history the details how it works how
it's supposed to work how it hasn't
worked we talk about intermediation
which is a huge part of our discussion
here all the information about euro
dollar University memberships if you
want to know how the euro dollar system
works you want to know a little bit of
something about monetary Theory check us
out at our website eurodollar.university
now like a lot of people I began my
career thinking extreme quite a lot
about hard money and all of its positive
attributes in fact I want to read you an
article I wrote more than a decade ago
it was that long ago specifically about
Bitcoin Believe It or Not here's what I
said it cannot in my opinion simply be a
historical accident of pure coincidence
that such massive and productive
Innovation seem to have diminished or
disappeared during the exact same period
where meaning and money was so highly
diminished by monetary quote-unquote
Innovation talking about the euro dollar
system
the less meaning contained in modern
currency the greater the incentive to
chase the easy Buck rather than face the
double spending problem through hard and
Innovative work that pays off in
economic advancement I have said many
times that there has to be a hefty
opportunity cost for a generation of day
Traders and house flippers the
accumulation of so much talent and
intellectual capacity for exclusive use
in and on Wall Street where money to
again hold meaning Wall Street and
governmental economics would be
Curiosities a sideshow distraction to
the new Giants of industry and
Innovation Innovation is not dead it is
simply buried in a tsunami of
meaningless tokens euro dollar tokens
and I fear the opportunity cost of
delaying its arrival grows exponentially
that was written on March 8th of 2013
and here's the final line in that
article it would be easy to Simply blame
the CPI but I have high hopes for
Bitcoins and I still have high hopes for
Bitcoin to this very day I believe it
was an elegant attempt at a solution
given the set of problems that we were
dealing with and still dealing with
because as I said at the introduction
the euro dollar opened the door wide for
a competing currency system let's step
back let's let's talk about the good
parts about Bitcoin because there are
several and there are several very key
ones first of all
we don't need Banks I know that's that's
hard for many people to grasp and that's
it's a concept that might be too
difficult at least at first most people
don't realize that we have been on a
virtual distributed Ledger system
narrowly distributed Ledger system for
decades
the dollar system that everybody thinks
that they've been using is physical
currency like we're using printed
currency from the Federal Reserve or the
federal government that's just not the
case and it hasn't been the case in
large part for over a century we've been
using Ledger money for a long time
except Ledger money in this format is
where banks are given a special present
place and privilege because we're led to
believe that these are storehouses of
physical government money when you think
of a bank what do you think of you think
of a solid fortress-like building with
this massive Vault that that it takes
thieves Hollywood style as a scripts to
try to break into to steal cash let's
know what a bank is and Bank these days
is nothing more than a glorified
bookkeeper they keep track of who owes
what to whom and how much that's really
what they do and their ledgers fit
together with your individual ledgers
that piece together with other
individual ledgers and that bank Ledger
fits together with a system-wide ledger
through all of these Financial utilities
throughout the euro dollar system when
wouldn't it be much more elegant to have
just one Ledger that we all share that
we can all access that's completely
transparent that's what Bitcoin gets
right and gets right in Spades the idea
that we don't need Banks to keep track
of who owes what we could do that
ourselves we have the technology and
capability and Bitcoin
by God it has demonstrated that for a
very long time so that's one point in
there in bitcoin's favor and it's one
that I wrote about several times over a
decade ago one of the reasons why I
hired high hopes for because block
blockchain technology is an incredibly
elegant solution to many inefficiencies
that riddle the euro dollar to this day
the other good point about Bitcoin as a
limited Supply is again the problem we
have of intermediation and that in the
euro dollar system especially its later
years as I said before it got to be way
way too far people think that I'm an
advocate of the euro dollar because I
talk so much about it but really what
I'm trying to do is explain what it
actually is and how it used to work and
how it works nowadays so that we can
realize that we do need to replace the
system we should replace it with a
system that focuses back on
intermediation the real problem of the
euro dollar in theoretical terms was
that it mixed up money creation
capacities which not the fed or federal
government this global banking card town
which is even worse than the federal
government a global banking cartel that
wrestled or actually actually gained the
control of the money printing in the
global system because it was neglected
for a long time
so we have Global banks that are
essentially money printers that realize
that they could just start printing
money and as they printed money
intermediation fell apart and what is
intermediation intermediation is the
redistribute redistribution of money and
credit money through credit through the
global through any economic system
which is something that is very vital
and necessary to happen because in any
economic system you're going to have
winners and losers you're going to have
more successful companies businesses and
individuals and this has become more
successful guess what money tends to
flow in those directions not to depend
money does flow in those directions and
it can pool with those successful people
who if they use it as a store of value
it doesn't circulate it leaves less
money for circulation throughout the
economy which requires a high degree of
financialization to recirculate it which
is not a bad thing
of intermediation is a good thing if
it's done properly if it's done for
productive purposes which is usually hey
I don't want to lend money to somebody
that I'm going to lose it because I'll
be out of business if they're out of
business so intermediation is a very
crucial function to any monetary and
economic system and when you have more
money creation and money creation is
done by those who are supposed to
intermediate the system sometimes they
just completely forget to intermediate
that's really what was what went wrong
with the euro dollar system that's where
subprime mortgages came from in ninja
loans and all of the bad financial
products that we associate with the
bubble era that was all about
intermediation going down money creation
taking over so Bitcoin quite rightly in
Bitcoin uh Bitcoin proponents surmise
that look we need intermediation to be a
big thing again so strict money hard
money let's make people earn their earn
access to funds so in in doing so they
have to earn it we don't have we're not
funding and just printing money creating
all sorts of waste and inefficiencies
like day Traders and house flippers what
seems like a generation ago now and
there's all sorts of ways in which
financialization that really I think
showed up in the 1990s and early 2000s
it really goes back to the 1980s too
that people began to to Really zero in
on as symptoms of this wider deeper
problem so the euro dollar way too
elastic fixing or mixing up money
Creation with intermediation and it
would make sense that the pendulum might
swing a pendulum of public appetite an
opinion would swing to the opposite
direction let's think about a hard money
system where we don't have those
ridiculous stupid absurd costly excesses
we won't have a crisis if we have hard
money at least that's the thought
the question is first of all whether
that's a sound Theory then whether or
not Bitcoin can execute the the the
attempt
again let me say here as I offer some
criticisms that I do so from a
perspective as I wrote over 10 years ago
I would love nothing more than Bitcoin
to succeed
um I think the euro dollar needs to be
replaced and I'm on record in numerous
places and for a long time saying I
believe digital currencies are indeed
that solution and it would be great if
Bitcoin could provide it because Bitcoin
is the first one out of the box the
first real one out of the box it's the
biggest brand on the planet as far as
digital currency projects are concerned
so it makes sense it's the furthest
along it's got the most it's been Road
tested over and over again despite
repeated challenges
Bitcoin has the path you would think the
the easiest path to success but that
path is not easy they have a leg up on
all their competition but I think there
are some things that bitcoiners need to
realize in order to in order to make
theirs make their answer make Bitcoin
itself more likely to succeed and when
it does succeed assuming it does it'd be
more effective and then sticking around
and Performing all of the all of the
goals and meeting all the goals that we
wanted to for the commercial and
economic system
and it starts with bitcoiners hate the
fed and they hate the FED because they
think the FED printed money and that has
become sort of a unchallenged belief an
article of faith that has driven many
bitcoiners toward Bitcoin the idea that
the FED has printed so much money it's
going to destroy the dollar therefore
Bitcoin is going to take over from the
dollars ashes and I think in believing
that why that's why that's potentially a
big issue is because instead of
realizing that Bitcoin needs to be a
more effective medium exchange this view
has prioritized Bitcoin as a store of
value and so bitcoiners take the the
position that they just have to wait
around for the dollar to destroy itself
and then Bitcoin will sort of
self-evidently arise from those ashes
when I think that instead realizing the
FED never printed the money and the FED
still hasn't printed money and money
actually comes from the banking system
which is even even easier sale in my
opinion tell people that um not only
have we have a distributed virtual
currency Ledger it's maintained by a
global cartel of banks a a decentralized
system becomes even more desirable
however
because it's been so focused on being a
store of value it hasn't really
developed as a medium of exchange which
has led to this other odd sort of
assumption that is taken as an article
of faith that if you develop a store of
value it will then become a medium
exchange when there are numerous
examples when that's not the case the
euro dollar itself is a prime example
the euro dollar took over the entire
world despite the fact that it is at
best a horrible medium a horrible store
value it's a terrific meaning of
exchange it's a horrible store of value
in fact it doesn't really have a store
value the store value in the euro dollar
system is financial markets so the euro
dollar took over based on being a the
best medium exchange that could be
offered at that time
Bitcoin focuses on store value think and
I think they get that backwards focus
more on you and making Bitcoin a useful
medium of exchange and less on store
value because if you're waiting for the
dollar to go to zero you're going to be
waiting a long time and you're missing
all of this opportunity to demonstrate
usefulness of the of the token and
especially during this period of time
when people are searching for answers
make it a better meeting of exchange and
stop focusing so much on store of value
which brings us to the question of store
value because of the limited Supply
and this is an age-old question about
elasticity do we need an elastic
currency as I said the theory is that
you don't have an elastic currency
because limited supply of any currency
or money heightens intermediation
heightens efficiency maybe even
eliminates the business cycle altogether
and again it sounds great in theory but
when you study monetary history look at
it in practice first of all what you see
is that there has never been a truly
hard money standard not a strict money
standard in existence because people
will always if if a monetary system
becomes too restrictive people will
always find a way to create elasticity
to find ways around it the euro dollar
being the prime example triffin's
Paradox drove these Banks to create a
offshore
virtual Ledger system that they
controlled and they created so they
circumvented the somewhat hard money
standard of the Bretton Woods era by
creating this euro dollar ledger so I
again I think there needs to be some
attention to elasticity uh the fact that
human beings if if a monetary system is
too restricted people will look for
Alternatives so need to be a better
useful medium exchange a better
elasticity and there are all sorts of
other problems uh bitcoin's price has
been exceptionally volatile which has
given rise to the birth and the
proliferation of stable coins full
disclosure I am a trustee of a stable
coin
so that along with with issues about
Bitcoin Supply about how elasticity how
inelastic Bitcoin is how how it's not
paid too much not paid nearly enough
attention to becoming a useful medium
exchange and what you left with is
Bitcoin has so many of these positive
attributes you're just frustrated that
it can't complete complete the final few
steps to really becoming a potential
answer to the euro dollar breakdown and
there's more there's more behind all of
these things obviously you can't fit
this in just a single YouTube video but
again back to what I said from the very
beginning I have high hopes for Bitcoin
and All Digital currencies assuming that
they can actually perform these
functions they need to be able to
respond to a dynamic environment which
fixed money systems aren't going to be
able to do fixed money systems also have
several inherent downsides to them
deflation being a huge part of it and we
can spend a whole video on just that too
but by and large it's some elasticity
that that allows the coin that allows
the currency to become a useful medium
of exchange I think that's the big part
that's missing for me once Bitcoin
becomes if it can if it can can become a
useful medium exchange then building
upon all of these huge attributes that
have been that have been tested and
built and and developed over the last
what has it been 16 years 15 years now
almost 15 years January 3rd 2009
and Bitcoin could possibly be the the
replacement to the euro dollar system
but these are serious issues including
you know again elasticity is a big one
medium of exchange it's not just enough
to say we're going to be the Survivor
after the dollar explodes and goes It
goes to zero it's completely worthless
because waiting for the dollar to go to
zero you're gonna waiting too long and
you're wasting all this time along the
way the dollar isn't going to go to zero
because as the euro dollar is the only
viable alternative to itself the only
the only variable option currently
there's always going to be some use for
the euro dollar therefore the dollar
denomination so making it better more
elastic potentially medium of exchange
and there's a whole argument there I
understand but elasticity that's a huge
part of becoming a medium exchange and
doing that that then really takes
advantage of the situation that we find
ourselves as I wrote in March of 2013 I
still have High Hope for Bitcoins and
that's the big one you know it's medium
of exchange first and foremost the
dollar the euro dollar took over the
world by being the best medium and the
one that can supplant it and the one
that can show it's a better medium
exchange a more stable more productive
medium of exchange that's the one that
actually takes over and supplants the
euro dollar system
I did a video almost a year ago about
whether or not we actually need Banks
and whether or not there was a place for
cryptocurrencies and digital currencies
to replace them you could check that out
at the link below me as always I thank
you very much for joining me a huge
thank you you're at all University
members and subscribers until next time
take care
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