Reminder: Why bitcoin could never replace fiat currency.

Referencing the article “UBS: Bitcoin can replace fiat money when it hits $213,000” published on bitcoinist.com and written by Julio Gil-Pulgar.

Fisrt off, capitalism is the best economic system we have come up with in terms of efficiency. This does not mean it is perfect. The main problem whit capitalism, and why I think so many people dislike this system, is that it is not a zero-sum game. What this means is that, due to the pareto principle (and distribution), if you let capitalism run its course without interference one person will in the end, theoretically, be left with all the money in the world. In other words, capitalism rewards the best players.

Now, say we choose to adopt bitcoin globally as a mean of payment. The first question would be how to distribute bitcoins among the 7+ billion people initially? Well, you can’t! It is not like you can collect all the bitcoins in the world from people’s wallets, put it into a pool and endow it based on peoples initial fiat value! Therefore, if you owe, say, one bitcoin initially, you will be one of the richest people in the world. This means that the few who have bitcoin initially will have an enormous advantage.
Well, thinking about it, there might be one way we might fully adopt to bitcoin; we would have to slowly adopt from fiat to crypto without anyone knowing it, while at the same time bitcoin was a fully adopted mean of payment. This way we could avoid a few "early birds" hodling on to their initial coins until they have enourmous value.

Secondly, and probably the most important reason why bitcoin could never replace fiat money, is due to its fixed supply. Say you are a company like Apple or Amazon. As long as you have a positive revenue, you could take the excess bitcoins you make and lock it away. Thus, making bitcoin scarcer. Not only would the price of the goods you sell increase, but the value of the bitcoins you have locked away would also increase. This would work because bitcoin is in a fixed supply, and thus, there is no chance of its value being deflated while holding on to it. Fiat money on the other hand is subjected to inflation, thus making it less valuable in terms of buying power the longer you hold on to it.
The only way I see that bitcoin could replace fiat money is if we completely reinvented our economic system. One that have zero-sum game as the fundamental principle in its design. But even if we came up with such a system it would probably not work then either due to the pareto principle i.e., people are different. Some are just better at accumulating wealth than others.

Bitcoin will probably remain for a long time, but mainly as a placeholder for fiat currencies and thus continue to deflate from its current value. It is the Netscape of crypto.