# Bitcoin as legal tender **URL:** \ **Category:** Great Debates\ **Created:** [June 6, 2021, 12:40pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705 "2021-06-06T12:40:11Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![naita](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/naita/32/5862_2.png) [@naita](https://boards.straightdope.com/u/naita)\ **Post date:** [September 9, 2021, 6:09pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/43 "2021-09-09T18:09:24Z")
> [@etasyde](#): > > You might not understand the use cases for cryptos, but that doesn’t mean they don’t exist. Decentralized Finance, for instance, will absolutely obliterate the traditional financial market. Consider insane things like flash loans (instantaneously borrow X available units of some currency, use it in some arbitrage, and pay it back in the same instant, with a 100% trust free guarantee, all coordinated automatically and without human intermediaries). Yeah, that seems like it will be _very_ useful for a financial system that’s about making actual industry and society go round and isn’t just a investment banker circle wank. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [September 9, 2021, 6:41pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/44 "2021-09-09T18:41:54Z")
> [@etasyde](#): > > I own a fat stack of crypto. If I’m wrong, it’ll go to zero like y’all seem to think and you’ll have your laugh. You don’t seem to be following the thread closely. I am not offering to bet that your crypto will go to zero; I want to bet on your claim that in ten years, **every national currency in the world will be a cryptocurrency.** ---
**Author:** ![Siam\_Sam](https://avatars.discourse-cdn.com/v4/letter/s/d78d45/32.png) [@Siam\_Sam](https://boards.straightdope.com/u/Siam_Sam)\ **Post date:** [September 9, 2021, 6:47pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/45 "2021-09-09T18:47:05Z")
I could have sworn another country did this first not too long ago. South America, and I’m thinking … Argentina? Does this sound familiar to anyone, or am I completely imaging it? ---
**Author:** ![PhillyGuy](https://avatars.discourse-cdn.com/v4/letter/p/ed655f/32.png) [@PhillyGuy](https://boards.straightdope.com/u/PhillyGuy)\ **Post date:** [September 9, 2021, 9:52pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/46 "2021-09-09T21:52:21Z")
> [@RickJay](#): > > You don’t seem to be following the thread closely. I am not offering to bet that your crypto will go to zero; I want to bet on your claim that in ten years, **every national currency in the world will be a cryptocurrency.** So what is this bet going to be denominated in? Euros? Dollars? Bitcoin? Cardano? I think you will win regardless, but it could affect whether it is worth collecting. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [September 10, 2021, 1:42am UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/47 "2021-09-10T01:42:50Z")
Whatever happens with cryptocurrency it won’t be with Bitcoin. > **[Suffolk IT Supervisor Arrested for Allegedly Mining Bitcoin at County Offices](https://www.longislandpress.com/2021/09/08/suffolk-it-supervisor-arrested-for-allegedly-mining-bitcoin-at-county-offices/)** > > A Suffolk County information technology supervisor has been arrested for allegedly mining Bitcoin and other cryptocurrencies from county offices, costing Suffolk thousands of dollars in electric bills, Suffolk County District Attorney Timothy D. Sini... I’m citing it because of the incredible stupidity involved and because he made his crime so easily visible because of the electric bills he ran up. Bitcoin uses so much electricity that it will inevitably be made illegal as governments start taking looming climate disaster seriously. [China has already had a crackdown](https://www.scmp.com/tech/big-tech/article/3141253/chinas-bitcoin-crackdown-why-it-happening-and-whats-next-original) for that reason. Soon there will be no place to run for cheap electricity and Bitcoin will end abruptly. That’s my less-than-ten-year prediction. ---
**Author:** ![Alessan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alessan/32/465_2.png) [@Alessan](https://boards.straightdope.com/u/Alessan)\ **Post date:** [September 10, 2021, 4:55am UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/48 "2021-09-10T04:55:41Z")
Or maybe quantum computing will come along, start mining cryptocurrencies quickly and cheaply, and flood the market with them. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [September 10, 2021, 6:24am UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/49 "2021-09-10T06:24:57Z")
> [@etasyde](#): > > El Salvador cannot vaporize value, as the Indian government did when they said “those large bills you all are saving? They’re worth zero now. Too bad!” Well, what the Indian government actually said in early November 2016 was “Those large bills will be worth zero if you don’t exchange them or deposit them in a bank account by the end of December (and pay tax and fines on deposited sums that you previously evaded tax on)”. I’m not saying that Indian demonetisation was necessarily a good idea or well executed, but it did not entail actual instantaneous destruction of the value of the discontinued currency notes. ---
**Author:** ![FlikTheBlue](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fliktheblue/32/10972_2.png) [@FlikTheBlue](https://boards.straightdope.com/u/FlikTheBlue)\ **Post date:** [September 10, 2021, 5:11pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/50 "2021-09-10T17:11:26Z")
> [@Alessan](#): > > Or maybe quantum computing will come along, start mining cryptocurrencies quickly and cheaply, and flood the market with them. Is that even possible? My understanding is that there is a hard limit on the total number of bitcoins that can be mined. Once they’ve all been mined, that’s it, quantum computers or not. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [September 11, 2021, 6:56pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/51 "2021-09-11T18:56:12Z")
> [@FlikTheBlue](#): > > Once they’ve all been mined, that’s it, quantum computers or not. Then what happens is they just become infinitely divisible, if people want more of them. Of course, more bitcoin does not mean the world has more wealth. As is so often the case in this sort of thing, whenever a bubble happens, the enthusiasts mistake more money for more wealth, and it’s that that results in the customary aftermath. ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [September 11, 2021, 7:27pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/52 "2021-09-11T19:27:41Z")
I will confess that I am still trying to figure out bitcoin and crypto, and there’s a lot that I don’t quite understand or get about it. That disclaimer out of the way… One of my concerns about BTC is that I don’t think most adopters are using it as a hedge against inflation; it seems more likely that it’s being viewed as a way to make a quick profit, like a meme stock. I think gold and other commodities take up the space of hedge. So if it’s being used more as a quick profit investment, what happens if crypto stabilizes and becomes less attractive? I have a feeling that some investors who’ve already made money are going to make a move to cash out. And if others are rushing to the exits at the same time, you’re going to have a run - and a crash. A related problem is that major nation-state governments are suspicious of crypto for reasons that are well-documented and valid. Crypto can be used to fund criminal activity. Or it could be viewed as funding subversive activity by governments like China. If push comes to shove, I could see major governments banning the currency altogether. ---
**Author:** ![FlikTheBlue](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fliktheblue/32/10972_2.png) [@FlikTheBlue](https://boards.straightdope.com/u/FlikTheBlue)\ **Post date:** [September 11, 2021, 7:28pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/53 "2021-09-11T19:28:21Z")
> [@RickJay](#): > > Then what happens is they just become infinitely divisible, if people want more of them. > > Of course, more bitcoin does not mean the world has more wealth. As is so often the case in this sort of thing, whenever a bubble happens, **the enthusiasts mistake more money for more wealth** , and it’s that that results in the customary aftermath. I’ve never understood that part of Bitcoin. Even the infamous hyperinflated currencies from Zimbabwe, Venezuela, and El Salvador had something backing them, whether oil, gold, diamonds, bananas, or the labor of the citizens of those countries. As far as I can tell Bitcoin is no different than something like Monopoly money in that regard. It has nothing backing it. ---
**Author:** ![DPRK](https://avatars.discourse-cdn.com/v4/letter/d/4491bb/32.png) [@DPRK](https://boards.straightdope.com/u/DPRK)\ **Post date:** [September 11, 2021, 7:49pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/54 "2021-09-11T19:49:18Z")
To summarize what I have said, “they” (except, apparently, for some Salvadorian crooks?) are not proposing anything to do with Bitcoin. What “they” want you to have are smart cards/mobile apps/whatever that you can use to store Digital Euros and spend them. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [September 11, 2021, 9:22pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/55 "2021-09-11T21:22:13Z")
Businessweek had an interesting article on the [pros and cons of digital currency](https://www.bloomberg.com/news/articles/2021-07-15/cryptocurrency-why-wall-street-is-afraid-of-government-backed-digital-dollar) recently. Digital currency is not the same as crypto, because it’s backed by a sovereign government and thus subject to some standards. [China is experimenting with it now](https://www.bloomberg.com/news/articles/2021-07-27/china-reins-in-bitcoin-cryptocurrencies-to-push-digital-yuan?cmpid=socialflow-twitter-businessweek&utm_medium=social&utm_content=businessweek&utm_campaign=socialflow-organic&utm_source=twitter). That seems to be one reason why, as I said above, China cracked down on bitcoin miners. Crypto enthusiasts seem to believe that they can outrun governments. Governments would bet otherwise. ---
**Author:** ![etasyde](https://avatars.discourse-cdn.com/v4/letter/e/9f8e36/32.png) [@etasyde](https://boards.straightdope.com/u/etasyde)\ **Post date:** [September 13, 2021, 8:59am UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/56 "2021-09-13T08:59:08Z")
> [@asahi](#): > > A related problem is that major nation-state governments are suspicious of crypto for reasons that are well-documented and valid. Crypto can be used to fund criminal activity. Or it could be viewed as funding subversive activity by governments like China. If push comes to shove, I could see major governments banning the currency altogether. It’s very complicated to explain why, but basically, no, you can’t ban crypto. You can make it _much worse_ for state actors, but you can’t actually _ban_ it. Here’s on easy to explain reason: You might not have heard of Monero (XMR) but it is a “private” coin - you cannot know who has sent how much to whom, only the sender and recipient can know how much was sent to what address (or received by that address) and an address can be generated and discarded untraceably. You can’t know how much an address has or doesn’t have unless you own the keys to the address. It cannot be audited, traced, or censored - you can try really roundabout means, by like monitoring all signals across all of the internet, but with a decent VPN or something like Tor/Onion Routing, the data is encrypted and impossible to even identify. BTC, ETH, ADA and others use a public ledger, so they are 100% traceable. If you ban these legitimate coins, then crypto just shifts immediately to private coins and the problems you tried to solve with a ban explode in size and scale. There are other reasons, but those take a long time to explain. Several members of the Fed and other big names in the financial system have come out and said that [they can’t _effectively_ ban BTC](https://www.forbes.com/sites/ktorpey/2019/07/30/us-lawmakers-are-realizing-they-cant-ban-bitcoin/), even if they could get over the massive legal hurdles they would face to do it in a place like the US. China’s “ban” even with the great firewall and their totalitarian control of the economy was largely ineffective beyond incentivizing miners to move elsewhere (removing a source of wealth for Chinese citizens - bummer man!). > [@FlikTheBlue](#): > > As far as I can tell Bitcoin is no different than something like Monopoly money in that regard. It has nothing backing it. Systems have value. In BTC’s case, the system of being able to transfer value nearly instantaneously without the requirement of trust in intermediaries is, in and of itself, valuable. Then it’s just market supply and demand, same as anything else. People are fallible. Banks conduct fraud, take risky bets, face liquidity crises, etc. When you hand your money to a bank, you are explicitly placing your money in their custody and your trust in their behavior. This is so true that the US learned the hard way that they had to insure these institutions because they fail often enough to cause severe problems (hence the FDIC, SIPC, etc). With BTC, there is no intermediary who can collapse due to say a derivative event and take you down with it by suddenly defaulting on the money you put in their custody. **That’s valuable**. Perhaps not so much for your average joe transacting with $20, but very much so for businesses moving millions or billions of dollars. Remember also that the FDIC and the like are only capable of responding to _small_ bank failures. If a “SIFI” or Systemically Important Financial Institution - the more palatable way to say “too big to fail” Bank - went down, which might happen if the constantly imperiled Deutsche Bank goes down for example, the FDIC does not have enough actual dollars to pay out even a fraction of the money it insures. I believe, last I checked, it was 0.013% or less than $0.01 for every $1.00 insured. Only way to actually execute in that case would be to print the money, which you’d better believe the Fed would do with gusto. Having some or all of your assets in BTC would shield you from that, considering Deutsche Bank wouldn’t just take out Chase and Wells Fargo, but pretty much every other major bank causing the same problem in pretty much all major currencies in the entire developed world. ---
**Author:** ![FlikTheBlue](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fliktheblue/32/10972_2.png) [@FlikTheBlue](https://boards.straightdope.com/u/FlikTheBlue)\ **Post date:** [September 13, 2021, 11:34am UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/57 "2021-09-13T11:34:00Z")
> [@etasyde](#): > > Systems have value. In BTC’s case, the system of being able to transfer value nearly instantaneously without the requirement of trust in intermediaries is, in and of itself, valuable. Then it’s just market supply and demand, same as anything else. Why would someone need Bitcoin or any other crypto for that? I don’t see a reason why the same can’t be done with dollars, euros, etc. ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [September 13, 2021, 11:56am UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/58 "2021-09-13T11:56:22Z")
By “ban” I mean that a country could criminalize the use of crypto within its own borders. I didn’t mean that a country or several countries could eliminate a cryptocurrency altogether. I would also be careful about making assumptions about what governments can and can’t find out. With the resources that most major nation-state governments have, they can eventually trace transactions. They can squeeze witnesses in an investigation. One source leads to another, including people who might not have had any other criminal intent other than using an illegal crypto product. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [September 13, 2021, 5:18pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/59 "2021-09-13T17:18:54Z")
> [@etasyde](#): > > With BTC, there is no intermediary who can collapse due to say a derivative event and take you down with it by suddenly defaulting on the money you put in their custody. It’s not that simple. > **[The Top 5 cryptocurrency failures of all time - Qrius](https://qrius.com/the-top-5-cryptocurrency-failures-of-all-time/)** > > When the issue of cryptocurrencies is discussed, the main theme seems to be around the success of these alternative currencies. You will often hear about the most profitable cryptocurrencies, how internet value has been made possible by digital... > **[More than 1,000 cryptocurrencies have already failed – here's what will...](https://theconversation.com/more-than-1-000-cryptocurrencies-have-already-failed-heres-what-will-affect-successes-in-future-127463)** > > With Wall Street slowly taking charge of crypto, the days of radical outsiders launching successful altcoins may be numbered. > **[There's roughly $140 billion of inaccessible bitcoin right now — or 20% of...](https://markets.businessinsider.com/currencies/news/bitcoin-price-btc-inaccessible-cryptocurrency-digital-currency-wallet-security-blockchain-2021-1-1029961482?miRedirects=1)** > > The inaccessible tokens are currently kept out of circulation, but systems can be created to recover the lost sums, according to one bitcoin expert. > **[This man owns $321M in bitcoin — but he can't access it because he lost his...](https://www.cbc.ca/radio/asithappens/as-it-happens-friday-edition-1.5875363/this-man-owns-321m-in-bitcoin-but-he-can-t-access-it-because-he-lost-his-password-1.5875366)** > > Stefan Thomas is a bitcoin millionaire. Or, he would be if only he could remember his password.  And so on. Maybe in the future a stable market will emerge, but I guarantee it will involve stable intermediaries. Today crypto is for the kind of people who like to take out a prop bet on how many Zs will be in the linesmens’ name in the 2024 Super Bowl. ---
**Author:** ![Martin\_Hyde](https://avatars.discourse-cdn.com/v4/letter/m/47e85d/32.png) [@Martin\_Hyde](https://boards.straightdope.com/u/Martin_Hyde)\ **Post date:** [September 13, 2021, 5:26pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/60 "2021-09-13T17:26:26Z")
Just to clear up some confusion about El Salvador’s law–it is not replacing the U.S. dollar as El Salvador’s legal tender. It is adding BTC as an additional legal tender. Merchants **will not be required** to accept BTC, or price products in BTC. It frankly appears like a stunt to curry favor with cryptocurrency investors, frankly. The President of El Salvador made the very first announcement about this plan _in English_ to a foreign audience, which I think tells you a lot about what’s going on. He also implemented a program at the same time that grants permanent El Salvadoran residency to anyone who invests 3 BTC into the El Salvadoran economy (around $140,000), which again, likely just a weird scheme to juice up investment in his country. BTC as a matter of point is non-usable as a serious currency. One of the most valuable aspects of a regular currency is stability. If I sit down for a meal that costs $50 and let’s say that’s 1 hour of wages for me, but by the end of dinner it now costs $50,000 because the currency is so volatile, that is a very bad currency. An extreme example, but countries with hyperinflation have had issues like that in the past (the savvy diners in those countries would pre-negotiate the price before eating.) BTC price swings up and down far too much for many common economic transactions. As a transactional currency for online stuff, where you set the price in a fiat currency and are just transacting the “equivalent BTC” value, it’s fine. As a digital form of “gold” i.e. a store of value, and a vehicle for speculation, it’s fine too. But BTC isn’t a viable currency, and it is likely as a proof of work crypto that is extremely harmful to the environment, it will face ever increasing regulatory barriers that decrease its utility as any sort of currency. Could a crypto currency serve as a good legal currency for real world transactions? Maybe, but not a gen1 proof of work crypto like BTC. ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [September 13, 2021, 5:53pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/61 "2021-09-13T17:53:08Z")
> [@Martin\_Hyde](#): > > BTC as a matter of point is non-usable as a serious currency. One of the most valuable aspects of a regular currency is stability. This is true. I’d also add that currency has to have some sort of value behind it. People can debate what “intrinsic value” means, but the origin of currency was that it made it easier to trade so that people didn’t have to calculate how many sacks of rice a goat was worth; they just minted a shiny object that had a universally agreed upon value. Suffice it to say that most major global currencies have economic “things of value” that support the currency. There’s really nothing like that with crypto, which is essentially backed by a few billionaire whales and everyone else riding waves of optimism. I know there’s been some talk of NFTs being a better form of BTC, which could end up being a way of doing transactions, but even if that’s the case, it seems like most of the really large transactions I’ve seen facilitated through NFTs are ultimately converted to traditional currency, for reasons that too obvious. ---
**Author:** ![Great\_Antibob](https://avatars.discourse-cdn.com/v4/letter/g/e47c2d/32.png) [@Great\_Antibob](https://boards.straightdope.com/u/Great_Antibob)\ **Post date:** [September 13, 2021, 7:05pm UTC](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705/62 "2021-09-13T19:05:14Z")
> [@asahi](#): > > I’d also add that currency has to have some sort of value behind it. Like dollars? Or euros? Or yen? The dollar is backed by faith in the US government. That’s about it. Not economic ‘things of value’. Once you get that nebulous, you can always claim cryptocurrency is backed by the value of the electricity used to generate and maintain the blockchain. I doubt the viability of cryptocurrencies as serious currency but not because there’s no value behind them. That’s bordering on gold buggery. > [@asahi](#): > > I know there’s been some talk of NFTs being a better form of BTC, This isn’t really true. NFTs are basically an application of crypto. You can do an NFT using the Bitcoin algorithm itself if you want, though you’ll probably want a separate blockchain that just uses the algorithm rather than the existing infrastructure. Or you can use a separate crypto algorithm altogether. It’s the algorithm itself that matters, not the NFT part. This seems like a misunderstanding of what NFTs actually are. [Previous page](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705.md?page=2) [Next page](https://boards.straightdope.com/t/bitcoin-as-legal-tender/943705.md?page=4)