MultiversX Tracker is Live!

What is required for crypto to be the future?

All Cryptocurrencies

by COINS NEWS 51 Views

This is a rant!

I've recently discovered crypto in a more deep sense. I absolutely love the idea of decentralized finances and trustless systems. The technology of block-chains is fascinating. However I have one issue, if we want to use crypto like we do cash, (buy coffee, a house, new shoes, etc.) what is needed to make that happen?

Crypto is extremely volatile right now. So it doesn't make sense to me to pay for things with (lets say Litecoin) when the Litecoin could be worth 70 USD one day and 35 next month. (I understand that the perfect scenario is everyone uses crypto derived from limited supply currencies like bitcoin, and thus we have a decentralized, low fee, hard money system.) But let's be realistic, crypto will not replace fiat money in our lifetimes. So if the (ex. US) is still based on the USD, and inflation continues to occur, how does crypto help us fight that? You would essentially need your L1 currency of limited supply to increase in price equal to that of inflation, otherwise your currency has just succumb to inflation. So how do we deal with this?

Ideally, in a world of fiat and crypto, I should be able to hold an appreciating base currency that grows equal to or greater than inflation of fiat money, and then swap some of the base to a stable coin whenever I need to make a purchase or just convert it to fiat money.

So how do we get to a point where the L1 currencies are appreciating at a rate greater than or equal to inflation in an given moment. If I buy into bitcoin and convert 70k USD to 1 BTC, and I want to buy something that costs 70k USD (1 BTC), but then BTC is worth 65K the next week, I can no longer buy that 70k USD item. If I were to put 70k USD into a stable coin worth at 1:1, I would succumb to inflation as I directly need as many stable coins as dollars. But if I use a coin that is some set ratio of an L1 coin then we have a hard money system. But that hard money system is still attached to fiat inflation and other movements.

So how do we preserve value in crypto while connecting fiat movements while preserving peoples purchasing power.

I don't know I feel like I've been thinking in loops. I think I understand crypto and I do understand the US federal reserve and the gold standard, I'm just having a lot of difficulty connecting the two and making it make sense. I'm liking missing something.

Like if I buy into bitcoin at 70k and wanna buy a house for 700k or 10 BTC but then BTC went down, well fuck I guess I just lost my purchasing power. But then oh wait I can now afford a 1.7 million dollar house with my 10 BTC? How is that a good store of value?

submitted by /u/Zhalos_
[link] [comments]
Get BONUS $200 for FREE!

You can get bonuses upto $100 FREE BONUS when you:
πŸ’° Install these recommended apps:
πŸ’² SocialGood - 100% Crypto Back on Everyday Shopping
πŸ’² xPortal - The DeFi For The Next Billion
πŸ’² CryptoTab Browser - Lightweight, fast, and ready to mine!
πŸ’° Register on these recommended exchanges:
🟑 Binance🟑 Bitfinex🟑 Bitmart🟑 Bittrex🟑 Bitget
🟑 CoinEx🟑 Crypto.com🟑 Gate.io🟑 Huobi🟑 Kucoin.



Comments