Exploring the potential of Bitcoin to emerge as a common store of value and medium of exchange, considering its limitations and volatility.

The Potential of Bitcoin as a Store of Value and Medium of Exchange

Discussing the concept of a stable value currency, its effectiveness as a medium of exchange and store of wealth.

Facebook's Stable Value Currency

Examining the challenges and potential of digital currencies, including government regulation and building confidence in their components.

The Evolution of Digital Currencies

Analyzing the advantages and disadvantages of digital currencies in relation to gold, and the role of central banks in holding gold as a reserve currency.

Comparing Digital Currencies to Gold

Considering the remote possibility and long-term future of a currency that cannot be controlled by central banks.

The Possibility of a Currency Uncontrolled by Central Banks

Full episode with Ray Dalio (Dec 2019): https://www.youtube.com/watch?v=M95m2EFb7IQ
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Ray Dalio is the founder, Co-Chairman and Co-Chief Investment Officer of Bridgewater Associates, one of the world's largest and most successful investment firms that is famous for the principles of radical truth and transparency that underlie its culture. Ray is one of the wealthiest people in the world, with ideas that extend far beyond the specifics of how he made that wealth. His ideas, applicable to everyone, are brilliantly summarized in his book Principles.

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So much is being digitized today and there's this ideas that are based on the blockchain of Bitcoin and so on.

So if all currencies, like all empires, come to an end, what do you think will, do you think something like Bitcoin might emerge as a common store of value, store of wealth, and a medium of exchange?

The problem with Bitcoin is that It's not an effective medium of exchange.

Like it's not easy for me to go in there and buy things with it.

And then it's not an effective storehold of value because it has a volatility that's based on speculation and the like, so it's not a very effective saving.

That's very different from Facebook's of a stable value currency, which would be effective as both a medium of exchange and a storehold of wealth, because if you were to hold it and the way it's linked to, number of things that it's linked to, would mean that it could be a very effective storehold of wealth.

And then you have a digital currency that could be a very effective medium exchange and storehold of wealth.

So in my opinion, some digital currencies are likely to succeed more or less based on that ability to do it.

What happens is, do central banks allow that to happen?

I really do believe it's possible to get a better form of money that central banks don't control.

A better force of money that the central banks don't control.

And we also have to, and so they've got to go through that evolutionary process in order to go through that evolutionary process first of all governments have got to allow that to happen which is to some extent a threat to them in terms of their power and and that's an issue and And then you have to also build the confidence in all of the components of it to say, okay, that's going to be effective because I won't have problems owning it.

So I think that digital currencies have some element of potential, but there's a lot of hurdles that are going to have to be gotten over.

I think that it'll be a very long time, possibly never, but anyway, a very long time before we have that, let's say, get into a position that would be in an effective means relative to gold, let's say, if you were to think of that.

Because gold has a track record of thousands of years all across countries.

It's got disadvantages relative to digital currencies.

Like there's central banks that worry about others, you know, other countries, central banks might worry about whether the US dollar is gonna print that.

And so the thing they're gonna go to is not gonna be the digital currency.

Thing they're gonna go to is gold or something else, some other currency, they got to pick it.

But you think it's possible that 1 day we don't even have a central bank because of a currency that cannot be controlled by the central bank is the primary currency?

It would be very remote possibility or very long in the future.


Speaker 0: So much is being digitized today and there's this ideas that are based on the blockchain of Bitcoin and so on. So if all currencies, like all empires, come to an end, what do you think will, do you think something like Bitcoin might emerge as a common store of value, store of wealth, and a medium of exchange?

Speaker 1: The problem with Bitcoin is that It's not an effective medium of exchange. Like it's not easy for me to go in there and buy things with it. And then it's not an effective storehold of value because it has a volatility that's based on speculation and the like, so it's not a very effective saving. That's very different from Facebook's of a stable value currency, which would be effective as both a medium of exchange and a storehold of wealth, because if you were to hold it and the way it's linked to, number of things that it's linked to, would mean that it could be a very effective storehold of wealth. And then you have a digital currency that could be a very effective medium exchange and storehold of wealth.

So in my opinion, some digital currencies are likely to succeed more or less based on that ability to do it. Then the question is, what happens? What happens is, do central banks allow that to happen? I really do believe it's possible to get a better form of money that central banks don't control. Okay?

A better force of money that the central banks don't control. But then that's not yet happened. And we also have to, and so they've got to go through that evolutionary process in order to go through that evolutionary process first of all governments have got to allow that to happen which is to some extent a threat to them in terms of their power and and that's an issue and And then you have to also build the confidence in all of the components of it to say, okay, that's going to be effective because I won't have problems owning it. So I think that digital currencies have some element of potential, but there's a lot of hurdles that are going to have to be gotten over. I think that it'll be a very long time, possibly never, but anyway, a very long time before we have that, let's say, get into a position that would be in an effective means relative to gold, let's say, if you were to think of that.

Because gold has a track record of thousands of years all across countries. It has its mobility. It has the ability to put it down. It has certain abilities. It's got disadvantages relative to digital currencies.

But central banks will hold it. Like there's central banks that worry about others, you know, other countries, central banks might worry about whether the US dollar is gonna print that. And so the thing they're gonna go to is not gonna be the digital currency. Thing they're gonna go to is gold or something else, some other currency, they got to pick it. And so I think it's a long way to go.

Speaker 0: But you think it's possible that 1 day we don't even have a central bank because of a currency that cannot be controlled by the central bank is the primary currency? Or does that seem very unlikely?

Speaker 1: It would be very remote possibility or very long in the future.

Speaker 0: Got it. You

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Ray Dalio: Bitcoin | AI Podcast Clips