If Btc protects against central bank shocks, then how much is that insurance worth?
Take the ex post CPI rate as the risk. It takes two quarters to CPI risk to evaporate, so the consumer is looking at six month holdings. 20k is a third of the yearly budget he takes that out of savings losing tfour basis points. At today's miner fees the consumer pays forty bucks total, or 15 basis point. He pays nearly 20 basis points for a inflation savings on six month inflation.
Inflation is barely measurable, the consumer can adjust spending habits slightly and easily cover a six month half point price variation over six months. The pandemic aside, the dollar risk is low compared to budgetary flexibility. Taking a 15 basis point loss nets him little he cannot handle out of cash
A new Btc business model?
We have technology today that allows a spectre proof processor to hold a secret Btc address. And we have provable contracts that can buy and sell small bits over a shortened shard chain, lowering transaction costs to a few pennies. Essentially Paypal is bonding that service with trusted proof of stake.
Under these circumstances, demand for the blockchain drops, and the tiny bits take on market par with the dollar. That is their price difference depends in the different uses for each in payments. This devalues the Btc because it has less central bank against which to hedge. Btc eventually crowds itself out.
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