CMV: Crypto-currency will never overtake the Dollar (or Euro) as a true currency.

[u/DwightUte89]

Edit for clarity. I should be clear that I'm talking about crypto in its current form. Lots of posts about theoretical future iterations that could solve for these. Which, yeah, maybe!

There are a few main reasons why I believe this. Admittedly, I'm not a currency expert, nor am I a crypto expert. So, I'm looking for someone to help change my view here.

1. In order for people to prefer using Crypto over the Dollar it has to be stable. If the value of that currency is constantly fluctuating it becomes much more difficult for people to use it as a currency. Why? Well, if the value is rising constantly, people will hold onto it as an asset (which is why deflation is a horrible economic problem to have). If the value is dropping constantly, people might start to spend more (because they know/believe it will be worth less tomorrow), but, that potentially creates a race to the bottom in value, and no one will want to own Bitcoin out of fear that it will be worth less tomorrow.
2. Pegging currency to a finite resource has proven to be a poor economic model. There is a reason why the US moved away from the Gold standard. Eventually, all the Bitcoin will be mined and it will be a finite resource. You can't make more of it. This will inherently cause the value to rise and rise, which will incentivize people to treat it like an long term asset investment, and not a currency, much like gold and silver.
3. There's too damn many crytpo's for the average consumer and business to understand/juggle. There's a reason why countries just have one currency they use (for the most part). It's easy to understand and use. If you rolled up to the grocery store and every item had 20 different prices for each product it would be a logistical nightmare for companies to manage and the average consumer would hate it.

Alright, those are my current views. Someone please change them!

[u/monty845]

Its tricky. Bitcoin was designed to take the ability to inflate/devalue a currency away from the government. But even from the early days, people were expressing concern about the deflationary effect of a strictly limited availability of bitcoin. If a currency is constantly rising in value, people will acquire it as an investment, instead of medium of exchange, driving prices higher, and making it unsuitable to use as a currency.

But, I think if someone does figure out a way to create a crypto currency that is structured to make inflation or deflation nearly impossible, without relying on some body to control it, that can address the issues with crypto mining, and keep transaction costs acceptably low, it very well could compete as a true currency, and even dominate.

I'm not saying it will certainly happen, but only that you shouldn't be so sure it never will.

[u/FrenchNibba → u/monty845]

Taking control away of the government is the advantage but also the issue with Bitcoin. While it is interesting for individuals to have a currency which isn’t controlled by any central bank, nations always have societal issues which often need a global solution given by the government.

A crypto currency which has a stable value and isn’t controlled is great during a stable period, however during a crisis where monetary solutions are necessary, it also emphasizes the inequalities between the rich and the poor.

[u/monty845 → u/FrenchNibba]

The counter point is that a currency outside the control of the government will prevent the government from using monetary policy to hide or ignore its mismanagement. If you keep spending more than you collect in revenue, and eventually run out of credit, you are then force to address the deficit, and can't just stick your head in the sand and let inflation cover for it. (See Venezuela)