If you mean this let me explain what I was saying.

Bitcoin will not become the world's reserve currency. No government would allow a private citizen to create a reserve currency anymore than they would go back to a gold standard (as much as some want that). The Fed and other central banks are working on their own digital currency. I think we will have one in the next 10-20 years or so.

A reserve currency has to be something all central banks accept for clearing transactions. It also has to be something a responsible (big assumption) government manages to preserve its value. Bitcoin cannot be that because it can be controlled by Mr. Nakamura or whoever is setting up the bitcoin mining algorithms. In addition who knows how many other bitcoin like assets will be created. This can cause the value of any one of these to fluctuate wildly. In other words, bitcoin cannot be controlled. It is the opposite reason why gold cannot be a reserve "currency". It is in fixed supply and not under the control of a government. A fixed supply "currency" has some good characteristics (like keeping a government from over-creating money) but also has severe downsides. It creates beggar-thy-neighbor business cycles, severe liquidity crises like the Panic of 1907 and even deflations like in the 1890s that drove farmers to their knees.

Everyone realizes the inevitability of a conveniently created and transferable digital currency. It also might allow monetary policies that do not favor certain people. For example, when the Fed wants to create "money" it buys assets which typically lowers interest rates. This causes bond and stock prices to rise which creates wealth for people holding those assets but not for people who do not. This can make wealth inequality worse which is not what the Fed really wants. It could create a digital currency by simply adding money to everyone's account (assuming everyone has a digital currency account at the Fed). This might be a better way to conduct monetary policy because it reduces distributional consequences.

So in other words I do not see bitcoin becoming a reserve currency but I also see a digital currency on the horizon in the US. This leaves bitcoin and things like it basically a risky asset and not a currency even though some people will use it to transact, especially those who conduct illegal activities they do not want traced.


The difference between genius and stupidity is that genius has its
limits.- Albert Einstein