- Jack Dorsey, CEO of Block, says Bitcoin will replace the dollar.
- His claim was in response to a question from American rapper, Cardi B.
- The claim has been a long-standing view of Bitcoin proponents.
Bitcoin continues to be crusaded by its strongest supporters. Jack Dorsey, the CEO of Square which recently rebranded to Block, has said that Bitcoin will replace the dollar.
He made the claim in response to a tweet from Grammy-winning rapper, Cardi B. The rapper and songwriter asked her over 20 million followers on the thought that cryptocurrencies would replace the dollar. So far the tweet has been liked over 42,000 times and has attracted over 3,000 comments.
Dorsey’s response as well has sparked comments from all and sundry, some who agree and others who dispute the claim. According to the co-founder of Dogecoin (DOGE), Billy Markus, it was more likely that the meme coin would replace the dollar as it was more stable. However, Markus’ comment was more in the spirit of sharing a meme as it is accompanied by a meme picture that argued that dogs were more stable than a dollar as proof.
Examining Dorsey’s claim
Bitcoin has been pitched as a stronger currency than the dollar for several reasons. Proponents point out that the dollar is a fiat currency – a currency that has value because it is decreed to be so by a government. This gives fiat currencies their major weakness in the eyes of Bitcoin proponents. The Government is in charge of the issuance and control of the currency and often abuses the privilege by overprinting the currency, thereby causing inflation that reduces the purchasing power of the currency.
At the moment, inflation is a serious concern globally and in the U.S as well, governments have been printing more money to bolster their economies during the pandemic last year. Inflation in the US is at a 10-year high of 6.8% according to recent data from the US Bureau of Labor Statistics.
Bitcoin proponents present the benchmark cryptocurrency as a “hard money” alternative that can be used to opt out of the fiat system and preserve the value of one’s wealth.
The points against replacing the dollar
However, several points have been raised by critics to argue that Bitcoin cannot replace the dollar. For one, volatility remains a major concern for critics; they point out that wild price swings in a currency that’s suggested to replace the dollar will not do. To counter this, Bitcoin proponents argue that as Bitcoin becomes more broadly adopted, its volatility will stabilize considerably to allow it to be used as a reliable medium of exchange.
On the technical side as well, Bitcoin has been criticized for its low transaction settlement times and the impracticality of performing small transactions on the Bitcoin network. This point has repeatedly been raised by the CEO of Tesla, Elon Musk, who argues that instead of Bitcoin, it would be DOGE that would carry the day as a day-to-day transactional currency because of this flaw of Bitcoin. This argument too has been answered by Bitcoin proponents who propose using scaling solutions such as the Bitcoin Lightning Network that was designed for handling microtransactions efficiently and quickly.