yaaman on Nostr: nostr:nevent1qqs0hhzx62expk0nfr9wu0en3zhe3p7p40ln0cdgqk7agcueftwdr4syexp9c

quoting nevent1q…xp9c

While fiat currencies have their own set of contradictions and issues, such as the risk of inflation due to unlimited supply and potential political interference in monetary policy, the concept of Bitcoin as a global reserve currency faces significant challenges that make it unrealistic in practice.

The primary issue lies in Bitcoin's fixed supply and current distribution. With approximately 74% of the total Bitcoin supply held by entities with no liquidity, the amount of circulating Bitcoin available for global transactions is severely limited. This scarcity would create an enormous and unsustainable deflationary pressure if Bitcoin were to be adopted as a global reserve currency.

To function as a reserve currency, each Bitcoin would need to be valued at millions of dollars, far exceeding its current price. This astronomical valuation would lead to several issues:

Extreme wealth concentration among a small group of early adopters.
Practical difficulties in using fractional amounts for everyday transactions.
A severe deflationary spiral as people hoard Bitcoin, expecting further price increases.
Economic stagnation due to delayed spending and investment.

These factors combined make Bitcoin, in its current form, impractical as a global reserve currency. While it may serve other valuable functions in the financial ecosystem, its fixed supply and current distribution patterns create insurmountable obstacles to its adoption as a primary global currency.