We Can't Kill Fiat But We Can Limit The Influence Of Its System
I thought really long and hard on this and there's just not a way to kill the system of fiat. It's been literal months of exploring ways crypto can completely detach and eliminate fiat, and there just doesn't seem like a way out, exists.
It's so bad the deeper you look at it that crypto actually needs fiat to exist for it to be relevant.
Essentially, it can't perform as a replacement, not because it isn't fit to do better, but because its system cannot be anything more than an alternative system.
Certainly, many of us are familiar with the saying 1 BTC = 1 BTC, if you believe it's the stupidest thing ever said on fartnet, then I have news for you, you're not a dumbf* like the rest of them.
Sure, we can all play along with the “concept” and supposed message of it all but at the end of the day, it's simply just a stupid thing to say when you truly take the time to look at it.
This phrase often comes up in discussions of Bitcoin's market value, especially when newbies ask if Bitcoin at ATHs are worth it.
The general message transmission, being attempted here, at least to the best of my knowledge, is that Bitcoin should not be subjected to the value of the dollar.
There are many reasons why this train of thought is flawed but the best way to point it out is to simply consider a bar of gold, asking to not be weighed but simply taken as is.
Certainly, the dollar is far from a reliable weight system, but it's still the most utilized unit of account due to the economic strength of the US.
So not much to be done there.
Fungibility ≠ Equal Value
Not when value is generally subjected to numerous internal and external factors.
I'm strongly against the idea of 1 BTC = 1 BTC because each bitcoin is very different from the rest.
The first thing that makes them different is the data associated with the block they were mined. Evident in the ecosystem's adoption of Bitcoin Ordinals, Satoshi can be unique and hold distinct value from the rest depending on all associated data to their existence.
A satoshi that was mined by Satoshi Nakamoto? Well, the historical significance just made it unique and different from the rest of the sats out there. So asides the obvious flaws of wanting to lose Bitcoin's subjectibility to fiat currencies like the dollar, amongst itself, it doesn't even hold a quantifiable value.
It becomes more clear just how complex it is when you consider that there's essentially three layers of value to blockchain assets like Bitcoin.
We have the governance layer value - defined by the blockchain through miners solving for the target nonce. Then we have the market layer value where investors buy and sell the asset through an orderbook system, then we have the social layer value where people speculate and use the assets in a variety of ways.
All of these layers can influence each and can at the same time not influence each other's definition of the value of 1 BTC.
Fiat Simply Has To Exist
Considering the three layers of chaos that exists there, there's essentially still a need for a centralized value system for keeping an account.
People don't realize that they absolutely need fiat to exist. Even if inflation goes up by 1,000,000%.
The system simply needs to exist to take away the complex layer of proving what something is truly worth at any given time.
And before you ask, sorry, it can't be a decentralized system because it isn't backed by data (through code) but trust and belief.
By this reality, crypto is essentially a hedge system. It's not meant to replace, it's meant to be a “community-driven” hedge to the failing fait system.
Meant to limit the influence of fiat on our personal finances in terms of unlawful taxation, monitoring/tracking and outright centralization of our personhood.
The sooner we understand this, I think, the better we'll get at building products atop crypto that aids us navigate through life in a world made by centralized money.