In a recent tweet, Winklevoss described how the pandemic had uprooted life as we know it, in particular, its effect on the monetary system. This, he believes, is the foundation for more people buying into the Bitcoin narrative.
But not everyone agrees, one reply pointed out that Bitcoin doesn’t solve any of the problems listed. What’s more, volatility and the fact that users need to convert back into fiat, only detracts from the point made.
In turn, if hyperinflation ever did come about, the subsequent move to alternative ways to transact would highlight the shortcomings of BTC as a medium of exchange.
As such, while Winklevoss is playing up to the role of Bitcoin maximalist, in reality, an economic collapse would also see altcoin adoption too.
Bitcoin Doesn’t Cut it as a Medium of Exchange
Although the Bitcoin whitepaper was titled “A Peer to Peer Electronic Cash System,” its poor scaling, high fees, and slow confirmation times make it anything but a means to transact.
A 2017 study by Baur, Lee, and Hong found that despite high volatility, its primary use case centers around being a speculative investment.
They go on to say that considering the small market cap of BTC, relative to other markets, it does not pose a threat to financial or monetary stability. However, if this were ever to change, the influence of government and financial authorities would shrink as a result.
Blockchain developer, Krill Shilov hypothesized that creator, Satoshi Nakamoto did not envisage BTC growing to the scale it has. As such, Shilov believes Nakamoto focused on security over scalability.
Shilov pointed out that there are many alternative cryptos out there that better fulfill the role of medium of exchange.
All bets are on when it comes to speculating on which currency coin would rise to the top during a situation of hyperinflation.
Even then, who’s to say there would be only one.
Leading global blockchain news provider. A blockchain, originally block chain, is a growing list of records, called blocks, that are linked using cryptography.