Is it the end for Bitcoin? Bitcoin vs Digital Dollar

Bitcoin vs Digital Dollar

Is This Really The End for Bitcoin? When it arrived at the scene, many thought it was just this craze that would eventually pass, this internet funny money that was bound to eventually fail. But it kept pushing and growing. Now imagine a battle between the dollar, the world’s standard currency, going digital and then going head to head with Bitcoin, the undisputed champion of crypto. This showdown is real, and it’s happening in a bank account near you.

Bitcoin has drawn power away from traditional currencies, the nation-states that print their very own money. And it’s no surprise that governments feel bullied and threatened by technology. And that threat just keeps on growing. Since the inception of Bitcoin, thanks to its open-source coding, a vast array of crypto children have spawned over the years. And maybe now, more than a decade later, it’s time for the nation-state to fight back with their very own versions.

So who will be the victor?

Unfortunately, we don’t yet know, but governments will certainly make a strong attempt at recapturing control of this territory. In this article, we’ll be pitting Bitcoin against the digital dollar and exploring ideas like will the digital dollar take over normal currencies? Will it take over Bitcoin? And what can we learn from the past?

See, in early March, the White House issued a statement that appeared to twist the clamp down on cryptocurrencies like Bitcoin. And at the same time, it appears that they’re seriously looking into creating a CBDC, a Central Bank Digital Currency. Is the US government attempting a pincer movement on crypto technology, essentially surrounding them with no escape?

Doing this not only by coming up with their own digital dollar but also by forcing them back through the use of regulations. I mean, Bitcoin has survived many scares in its time, only with each fall allowing it to grow back stronger and stronger. But how would it fare against this kind of attack? An attack by both a competitor and a regulator?

An attack by both a competitor and a regulator?

Now there is certainly some excitement about the prospect of a digital dollar, with one of the biggest polls being the ability to distribute government resources to the poor and will help take a rip off merchants like Western Union completely out of the equation. They can charge up to 25% fees just to transfer money. This makes sending money back home a very expensive activity for many people living and working in the west. The digital dollar will essentially be like Bitcoin in that it’s a digital currency.

The differences will be tied to the dollar itself. This is very similar to stablecoins already on the market and in particular Dai, which is literally pegged to the US dollar. This makes perfect sense for commerce. People and businesses have a hard time properly operating on a volatile currency. As you can imagine, it’s quite the hassle buying inventory or paying for staff with a currency that could be worth ±10% next week. A stable option is extremely important.

This kind of digital currency makes a lot of sense when there’s a crisis. The Bahamas is one of the very first nations to adopt its own digital currency, and given the risks of Hurricanes in the region, a region that I happen to live in, it’s thought that having a digital currency would help get money out there when it’s really needed. Imagine if the government could instantly send $500 to every bank account in an area being smothered by a storm.

That’s amazing. We had stimulus checks a few years back and it took six months or more for some people to receive a payment. Obviously, an upgrade is needed here. According to a Fed report, these digital currency transactions would be final and completed in real-time. That’s amazing. We are living in a time where speed is crucially important. Maybe the digital dollar will be a real blessing for all of us, but it doesn’t seem to be all fun and games.

There are absolutely risks involved. There’s the potential of a bank run during a moment of financial uncertainty, or simply losing your token card could mean saying goodbye to your currency. That doesn’t make any sense. Scary stuff, but not as scary as what I’m about to reveal. The most sinister risk is attached to the use of the digital dollar. See, one of the key elements for the majority of cryptocurrencies is the anonymity that they offer.

Perhaps the clues in the title crypto are anonymous, but much like how social media sites harvest our personal information, selling it to the highest bidder, and how social media giants allow government entities to monitor your data in real-time, digital currencies can also be used for nefarious purposes.

Take China, which is perhaps the first major nation far along the road to having its very own digital currency. They also seem to be leading the way in how to run a dystopian state. The digital Yuan appears to be building on the controversial social credit system, something that was quite literally a Black Mirror episode first written as fiction, I might add.

In this episode, Lacie Pound is striving to improve her score to a perfect 5.0 from a 4.2 In order to do this, she needs help from her childhood friend Nene, who has a rating of 4.8. Needless to say, this leads her to an empty and superficial existence living to boost her score, not to actually live. This is eerily similar to what the Chinese government has been trialing in recent years. It’s almost like they looked at that episode and they were like that, that is exactly what we need to do.

According to China’s credit score system, a woman’s score would drop if she bought too much alcohol. Buying diapers, on the other hand, Would give it a boost. Do you think black mirror could sue them for copyright? I mean, they could try. They’d probably disappear, but they could try anyways.

What does this have to do with the digital yuan?

Well, according to coin desk, they say what sounds like a far-fetched dystopian nightmare Is already a reality in China. If you hang out with the wrong crowd, Your citizen score, which is crucial for purchases, jobs, travel, and so much more, suffers. Pair this level of surveillance with the ability to track any purchasing decision you make and you have the perfect recipe for big brother on crypto steroids.

Naturally, having a digital dollar would open the door to such a fundamental intrusion of privacy. And tracking is only one piece of the puzzle. What if the government decides to invalidate your wallet or outright deny you certain purchases? There are obvious pros and cons on both sides of this debate. What do you think about the arrival of the digital dollar? Let me know in the comments.

Here’s my personal take on a number of factors. Of course, all these numbers are hypotheticals based on how I believe the digital dollar will be implemented. But with the considerable scores for investment potential, individual freedom, and security, I can safely say that Bitcoin and stablecoins are still the winners.

This doesn’t mean the digital dollar won’t provide some healthy competition. I would say as long as the digital dollar starts and continues to be a voluntary option, Then it’s a good thing. The worry for me is if we’re forced to use the government option with data eventually mined and tracked all in the name of safety, an Orwellian level of control that closely resembles a dystopian episode of black mirror. Are you ready for it?

Also Read:

The Fall of Bitcoin in China

10 Things to Think About Before Investing in Cryptocurrencies

Why spot-futures arbitrage bots is a good crypto bot strategy?

Leave a Reply

Your email address will not be published.