Hypothetical Group Thought Exercise - What If Bitcoin/Satoshi Does Take Over Currency's Main Role?Submitted by tamckissick on Thu, 05/02/2013 - 17:58
We've been through all the discussions on will it or won't it. Since no one really knows for sure, let's skip past that part. I'd like to jump into the discussion of what will transpire on the global to local scales if Bitcoins and their 100,000,000th sized partner the Satoshi did become widely used enough to cause major disruptions.
My thoughts wander into the pretty far fetched grandiose areas because I personally feel that our current monetary system IS ONLY PROPPED UP BY THE CORRUPTIBILITY of fiat, paper/digital currencies.
I'll start us off and everyone can join in and while purely hypothetical conjecture at this point, the best tone would probably be one of past tense. Please no arguments pro or con on it's viability. Let's keep this thread to simply explaining to those who can't see past the fiat for the trees, exactly what life could be like if the people took this or a similar mass plunge.
As I remember, it would really started in a big way when major job markets successfully transitioned to paying wages in Satoshi. The dollar exchange rate put a bitcoin at $1500 each, or 100 Satoshi (S100) cost one penny. Of course, this is skewed because by then, the dollar was only worth 1/2300th of an ounce of gold or 1/80th of an ounce of silver.
The average wage hadn't grown much in dollars for quite a while but when converted over to S, people quickly found
that their non-inflating S wages were continually worth more goods as the exchange rate rose. This caused a slow, at first, increase in wages being demanded in S which quickly caught on. I don't think it took more than 2 years for most major transactions to get switched over.
The only thing not easily switched over was taxes and fines by the government. Not surprisingly, seemingly overnight, there sprang up hundreds of online 'tax paying' services that would hold your S until the last second before your taxes were due and then pay them for you.
Money seemed to be being made everywhere. It was incredible. New services popped up from lemonade stands to back yard mechanics and pool cleaners. Even kids mowing lawns always had a cell phone that was a click away from displaying their QR code for you to send a thousand Satoshi to ($10 in 2013 money).
The first major social change didn't take long after that. The government went on a major campaign to save the banks from total demise. Fortunately, this didn't go unnoticed. Since people had this new form of financial connectivity, it quickly spread to action movements. There for a while, it seemed like every transaction we made, our phones or computers were asking us if we wanted our government to kill some bank-bail out or subsidy. In retrospect, it was kind of awe-inspiring to see so many people get so involved, even if all they did was click off an ad by the yes or no.
The news roiled heavily that failing banks would be the end of civilization. At first, people believed this but it didn't take long (that seemed to be a major trend) for yet another social solution to come about. Enter the new era of crowd finance. We had seen crowd-funding even in the old days of the *cough cough* dollar, but not like this. People were investing, lending, borrowing, ranking, rating, complaining, praising and even donating S to and from every provider of a good or service... at any level. This was the death knell for banks. Oh, there was a big movement to save the credit unions until people learned that even their interest rates were in no way competitive to what people could get with their automatically investing BC wallets. I do have to say, it was a great pleasure for so many to watch the media switch gears and start finally talking about values in terms of a stable currency. Those were the days!
I guess, if I had to place an event as the straw that broke the dollar's back, it would have to be when BitSurance branched out. These guys had a small BitCoin insurance company. They initially accepted 1 BC for joining and then would insure against BC theft. As BC and S acceptance grew, it was just accepted as well that one tosses in a full BC for insurance. Seemed fair at the time. However, when the dollar fell faster and faster, that price seemed rather high to those still valuing things in $. BitSurance's answer was that they replaced their rate with a formula that dropped the price over time. This worked somewhat but it also brought the price to the kitchen table discussions.
That's when it happened. They announced that the formula was again to be changed, raised in fact, but the insured 'goods' would include everything. Effectively, they had taken over all insurance companies overnight. They had a pretty extensive, but easily transitioned process for filing a claim. It relied on crowd-verifying of data and was overseen by a roving 'jury duty' call on it's members to review and pay out claims. What is most amazing is that there was hardly a whimper from politicians or the media that it wouldn't work. It was just too simple to understand. In exchange for about 3 BC from each member one time only, you could put a claim on a TV or a terrier, a malignant tumor or a Mercedes. Sure, you wouldn't always get a full pay-out and some didn't get anything but everyone knew someone who got 'fair' treatment in a claim.
This, like I said, seemed to be the turning point. When doctors and hospitals stopped basing their fees on what they could earn and started competing on price, we all got better care for much less. I think most people didn't even bother with BitSurance, or their later copy-cats, if the loss was less than around S100,000 ($1000 in 2013 $). It just seemed like everyone was employed and people could so easily pay their expenses from wages. Wall displays and pocket display magically stopped going out after two years. I think it was because people started demanding long-lasting products because even house cooking appliance quality rose all of a sudden when they had only lasted 20 years before. Either way, that was the beginning of the end of living for the weekend where your highlight was going back to the store to replace or upgrade things you already owned. I say good riddance. :)
This prosperity eventually turned the job market on it's head. Gone were the days where an employer made all the rules and set the wage. Under this new paradigm, employers simply stated the work they needed done and what time constraints were required. Workers had gained the power to come in, offer to do the job for x price on y time-frame and do it with z work environment. They knew that if their requirements weren't met, they would be successful at another company... and they were. As you might guess, that's when wages started rising.
It took quite a while but after almost a decade, people were retiring with no bills in a 8-10 years. Entrepreneurs had given us unending energy for a flat up front cost. We had food and water from new technology that alleviated the previous problems of wasting or polluting it. Even the "internet" itself became a free service as we all learned to connect through each others' devices at no charge. I have to laugh that we had a name for the action of connecting to someone else, as though it required some underlying infrastructure (which, I guess it originally did) that could have been controlled or controlling. It just seems silly now because everything we want to say, do are see is always 'just there' these days. We even called talking to some "talking on the telephone" just because they weren't sitting right next to us. Ok, I'm dating myself here. Moving on...
What else can I say about how we got our money and how it is different from the previous way? Well, there's so many forks in this discussion I don't know where to take it. We could talk about how welfare used to be ran by the government and it wasn't even called charity back then and people actually hated donating because it was mandatory and they couldn't decide what their money went to. We could talk about health, wars (oh, don't get me started on how bad those were!), or even dumb things like planned obsolescence and in-your-face marketing. We could talk about how education was centralized and didn't even take into account the actual student's aptitudes or interests. Or we could talk about how crimes used to be manufactured with dumb laws to put innocent people in jail just to make some people richer than others because for some reason a person's self worth was somehow tied to their financial balance.
Yeah, it was a pretty crazy world. But I'm sure glad that part is over with. Now if we could just find a way to get travel times to the French Guiana Beach Islands to less than 3 hours, all our problems would be solved. I bet I waste 20 hours a month in travel times just to go every other week!