Bitcoin is Not The Next Logical Step To Solve Financial Woes -

Bitcoin is Not The Next Logical Step To Solve Financial Woes

Bitcoinist_Financial Woes

Many people around the world are wondering what it will take to fix the world economy, and the answer is far less simple than some of us would like it to be. For decades, a financial stimulus from governments or banks has been able to reduce a lot of the damage, but even that is no longer a feasible scenario. Is this the time where Bitcoin will shine and fiat currencies keep tumbling? Or is there another solution no one has thought about just yet?

Also read: Cash is An Interesting Investor Portfolio Diversification Tool Next to Bitcoin

What Needs To Be Done To Solve The Financial Issues

Bitcoinist_Financial Woes Economy

No one in the financial world will deny the current situation is going to cause a lot more issues down the line. Stock markets are in shambles, oil prices are crippling economies, and investors have no idea where to put their money right now. Bitcoin seems to hold all of the answers, but people remain very wary of the popular digital currency that is not controlled by banks or governments.

Depending on whom you pose the question to, the fundamentals of traditional finance are either sound or need to be revamped completely. Everyone in the world can see that “sound” is not a word that comes to mind when talking about the current global economy. Right now, the financial sector is in a vicious negative spiral, and there is no sign of improvement in the near future.

While the world economy might appear to be expanding on a global scale, the growth is weak and very uneven. When major countries, such as China, are seeing a stagnation and retrace of their economic growth, things are looking all the bleaker for other countries around the world. Needless to say, the year 2016 will be filled with challenges to overcome, and the IMF growth forecast is not favorable.

Traditional solutions to provide economic stimulation will no longer be sufficient. In the past, governments and central banks would provide a financial injection to get the economy stabilized, but that plan is no longer on the table. The Chinese central bank injected a few billion into the stock markets a few weeks ago, and the prices kept crashing even then.

So what is left to get us out of this financial mess? Unfortunately, there is no real answer to that question, as no one knows how the situation will keep evolving over the next few years. One possible solution is to end the currency wars, by no longer allowing economic powerhouses to purposefully drive down other currencies’ values to gain a competitive advantage.

Bitcoin Is Not The Logical Choice

Bitcoinist_Financial Woes Economy Bitcoin

A lot of people might think that Bitcoin is the next logical step in the evolution of finance. As the digital currency is not controlled by banks or governments and manages to provide a global financial infrastructure, Bitcoin holds all the right cards to become the next currency of the world. But things will not go that smoothly, unfortunately.

Consumers, businesses, and established financial players are not keen on embracing Bitcoin just yet. Despite offering many advantages compared to traditional finance, there is a lot of hesitation when it comes to exploring the world of digital currency. That being said if the financial woes can not be resolved anytime soon, Bitcoin might be the only option left.

What are your thoughts on Bitcoin as the next evolutionary step of finance? Let us know in the comments below!

Source: Telegraph UK

Images courtesy of Shutterstock

Jp Buntinx

Jp Buntinx

JP Buntinx is a freelance Bitcoin writer and Bitcoin journalist for various digital currency news outlets around the world. In other notes, Jean-Pierre is an active member of the Belgian Bitcoin Association, and occasionally attends various Bitcoin Meetups in Ghent and Brussels

  • smd

    With all its shortcomings bitcoin is the lesser evil here.

  • Historically, when economies hit a depression there is a VERY small amount of government money circulating; currency is scarce. The gold standard is excellent, if you have gold! Very few people have a store of precious metal. This circumstance is similar to bitcoin, a scarce “commodity” rising in price. Again, if you don’t have any BTC, in a slow economy you are unlikely to get that job, and you won’t be able to earn any bitcoin or gold. Bitcoin is scarce, just like money. Furthermore, Gresham’s Law says that alongside a legal tender, people hoard the valuable commodity and spend the cheap paper (which does not appreciate in value). It’s likely in hard times; consumers will part with their dollars and hoard the BTC which is rising in value. In the depression and during recessions, when money is scarce communities and regions can create local or complementary currency. It’s not rare, it is plentiful. It flows through the community and reaches places that scarce federal money does not go. If you have 100 unemployed people and 100 jobs to get done but no dollars to pay them…..create a local unit of value, such as a mutual credit system and engage all the workers. In the 1930’s an Austrian town formed a local currency, the Wörgl, and solved most of the employment issues, fed everyone and completed infrastructure projects, such as roads and bridges. Any digital currency can be designed to fix this type problem of “lack” [we lack the money to pay anyone], but BTC won’t stimulate the economy, it’s scarce and hoarded. Currency should be plentiful and have a purpose other than to pay for governments and wars.

  • Well, it seems that Bitcoin IS the next logical step, people simply need to convince themselves.

  • “what it will take to fix the world economy” I’m not disagreeing with you, but can you tell us “How does Bitcoin fix the world economy?” What does it fix? For all those starving people in African countries and all the jobless people in America, what solution does bitcoin give us that corrects these problems?
    Bitcoin is deflationary and should rise in value over time. However, that is no help for our current situation where everything in the world is still priced in dollars or another inflationary government currency. A quart of milk last year was a dollar cheaper, next year it will be a dollar more. BTC does not solve the problem with inflation. The only way it helps is if you get ride of all government currency around the world and only used Bitcoin and that’s not going to happen. Why is Bitcoin the next logical step? What does it do to solve all these issues?

  • Sun Drez

    Bitcoin is the next logical step in every aspect possible…. Trying to explain the color green to a man who has never had sight in his life would be the same as trying to teach people why Bitcoin is the future…. I believe in Bitcoin and see it for what it truly is, that being fair play…. Now the thing that the ones on top do not want people to know is that they are unable to gain control of Bitcoin, they can not create it, or steal it… Since there are only about 15.5 Million and they are held by many different people who are aware that this is the future on many levels holds big instutes out… SO all they can do is critize it and then personal accumulate all they can get their greedy hands on, and all the lems in the circus in top positions just do and think whatever they are told…. Don’t believe the propaganda in regards to Bitcoin, this is owned by the people, it is for the people, and will be the entire future ecosystem of finiance as well as record keeping…. Much more effective than systems of governement that are hacked and tampered with daily….

  • Sun Drez

    It gives people who save (as you state hoard) and not spend a chance not to be taken by criminals who have dedicated their lives to obtaining everything by doing nothing…. And with ever increasing value what does it matter? As the entire world economy could easily run off just one Bitcoin…. And imagine how retirement would be if you could get a constant increase of 12% a year on the coin you held? So if you had 100,000 worth of bitcoin, and the following year that coin was worth $112,000 which then gives the retired person $12,000 of disposal income by seeling part of their Bitcoin holding to use to support their retirement… Then the following year once again their $100,000 worth of Bitcoin was once again $112,000 which gives them another $12,000 to use… And it continues on, while young people understand that once they accumulate enough of Bitcoin they can then begin to live life and they to can retire giving someone else the opportunity to take their job and begin working….

  • Thanks, that is a very accurate statement and a good one.

  • Well….that is one way to answer. Thank you.
    However, I’m still a bit confused; if I don’t own any BTC, how is it helping me? If I can’t put 100k of my 401k into BTC for that wonderful 12% a year….What I mean is….if I’m hungry, living out of my car and unemployed, how does BTC-stimulate the economy then help me and the 20 million other American’s in my situation? Does BTC activity create jobs? Well, perhaps owning, buying, mining and selling BTC does not create jobs? OK, then how do Bitcoins fix economies or financial systems?
    The article asks us about “…next evolutionary step of finance?” so what does Bitcoin fix and how does it improve my American life? (or should I ask, what will it soon fix?)
    By the way, I’m not color blind. After 16 years in the digital currency business I’m on my second book for Macmillan publishers.
    A History of Digital Currency in the United States: New Technology in an Unregulated Market
    100,000 words for Palgrave Macmillan in NYC. Edited by Albert N. Link, Ph. D. UNC Greensboro and included in a new series, Palgrave Advances in the Economics of Innovation and Technology

  • Sun Drez

    What my vision tells me is that Roger Waters – Another Brick in the Wall – refers to people such as you… And I am not here to teach you, but maybe you should find Jesus and learn about why he flipped the tables in the temple and began cleaning house with a bull whip…

  • You can educate yourself about Bitcoin, but since you mentioned Africa, yes, it will definitely help out there, because of the lower transaction fees, for instance.

  • The Priests, the Temples and the Blockchain Clearing Systems