Spitthedog. Bitcoin is two things, firstly it's a currency, secondly it's a technology stack that enables transfer of ownership of that currency. Your points below relate to the second part, transactions and you use PayPal as an example. PayPal has lots of flaws:
- It's not available in all countries
- In lots of countries where it is available you can't draw down funds (such as Cambodia)
- It's centralized and that centralized authority can choose to freeze your account at anytime
- All transactions are logged and monitored by PayPal
- PayPal decides what goods can be traded using their services
- PayPal takes a cut on transactions
- There a lots of restrictions regarding money crossing borders, for example you can't transfer USD from UK USD Paypal account to a US USD account, you must first change it into GBP
PayPal doesn't want most of these rules, they are forced on them by state level regulation. The state want to retain control over what we do with our money and the privileges they do grant us come at a cost. Bitcoin allows the transaction to be direct between two parties with no third party intermediary if we so wish, this allows truly free trade (free as in speech not free as in beer) just as we can with cash.
Bitcoin is a purely digital currency so the ability to make electronic transfers is baked in. All existing electronic payment solutions could easily integrate Bitcoin as a payment option, the limiting factor wouldn't be technical complexity, it would be market demand and regulatory pressure. Unlike other forms of digital transactions I don't think they will be pushed upon us from above, the real traction will be bottom up and start with people using smartphones to make micro-payments among themselves as an alternative to cash.
Although the Bitcoin price has stabilized a lot in the last couple of years it will still be susceptible to fluctuations, but that's just due to the small amount in circulation (compared to major currencies), just like the Khmer Riel it wouldn't take a huge volume of buy/sell activity to swing the price. That's not a flaw in Bitcoin, that's just simple supply/demand dynamics and will decrease as the price / amount in circulation increases.
So that covers the transaction side, which is great, but that's not what's game changing. It's the currency itself that's game changing, the reason being that Bitcoins are a finite resource which means the price will overtime increase rather than decrease as it does with fiat currency. Central banks create new money out of the ether everyday, this creates inflationary pressure and is in effect a hidden tax as it's a revenue stream for the state that decreases the value of our monetary assets.
If you held 1000 Bitcoins today, left them, and came back in 50 years, that 1000 Bitcoins would give you roughly the same or more purchasing power than they hold today. If you put $1000 in a bank account and came back in 50 years those $1000 would likely have less than 10% of the purchasing power they have today (if you are lucky).
Of course our rulers don't want a move away from fiat country as it provides them with a huge level of power, so they will do anything they can to stop it. But personally I don't think it matters because fiat currency is doomed anyway, Bitcoin or something like it is what will rise from of the ashes of the petrodollar and the Euro in the next decade or two.
Bitcoin Cambodia
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- MerkinMaker
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