It sounds a bit ridiculous but before you flame me, have a think about it. In a SHTF scenario the "current" financial system is in ruin. Many on SS think the logical result of this will be that people will flock to gold and silver as it formed the "previous" financial system of exchange and they probably will. But going forward, physical exchange of gold and silver as currency is not really very practical. PMs might return as the ultimate store of private wealth.but we still need something to actually trade with. From what I can see, crypto currencies (like Bitcoin) are pretty volatile and still fairly immature but in essence they are NOT controlled by banks and governments and they DO provide a medium of exchange so they may not just survive a SHTF scenario but actually thrive. One way I look at them is they provide a type of electronic bartering mechanism that could be very useful in a SHTF scenario if, well.our government issued fiat money becomes worthless and we need to resort to some kind of barter! I could make the argument that IF the current financial system is flawed and is going to collapse there will need to be a new financial system invented to replace it and maybe cryto currency has a big role to play in the "next" financial system? Am I nuts? Do you agree? If you are holding crypto currency, is it just a speculative investment to you or is it part of your diversification (or SHTF) strategy?
OK, fair question. Initial SHTF for me takes the form of sovereign debt defaults, bank collapses, stockmarket crashes and everyone losing some (or all) of their superannuation and savings accounts. During the initial "shock" stage, everything is still running. Electricity, internet people are still probably even showing up for work while the government of the day appeals for calm over mainstream media. Naturally there is some civil unrest from (predominantly older?) middle class who just lost their savings but assuming people don't just start killing each other there will be some (or many) who will try to adapt and overcome these setbacks. The poor might even be happy with the collapse as they could have their own debts wiped out. People will quickly realise though that they have no savings and no means to put food on the table for their family will soon decide they still need to earn a living somehow. These people will be looking to get paid via a new medium of exchange.and that will be?
I should also add that I think part of the SHTF scenario (either just before or just after the financial collapse) involves left-wing politicians achieving dominance and their response to the SHTF scenario will be an attempt to nationalize everything on a platform of ensuring social welfare and restoring stability.
There are already examples of SHTF in a modern context and as defined - Argentina, Greece spring to mind. So possibly Crypto currency is a way to avoid capital controls and move your assets away from the collapsing society. Once the collapse has happened then precious metals and anything of real physical value is the safe haven. If the world as you knew it is then glued back together then Cryptos would be just so many electrons.
JulieW, I tend to agree and there appears to already be a fairly recent example of Bitcoin being used in financial crisis - if not as a safe haven then definitely as a mechanism for fleeing toward safety. Of course I am referring to the Cyprus financial crisis in 2013 and the threat then of proposals to raid peoples bank accounts. That set off a rush of Europeans trading Euros for Bitcoins in what could only be described as an attempted "flight to safety". So maybe in a full-blown SHTF scenario (with no internet and electricity) Bitcoins won't be much good, but in a developing SHTF scenario (with capital controls etc) they may be a valuable place to temporarily stash some wealth until it can find a safer home? Of course the way the Bitcoin blockchain works, transaction info is stored on decentralised computers globally so even if electricity and internet is dead for a time - that info would surely survive (somewhere) and be recoverable during a SHTF recovery? Certainly I think that Bitcoin could potentially be back "up and running" a lot faster than a new central banking system would be....? (Personally I think that in a full blown SHTF scenario the banksters will be getting dragged through the streets, so that might be a slight impediment to them trying to start up a new bank)
You really think people will trust for want of a better word an electronic currency if their paper one folds? I personally think people will want tangibles to trade/barter with. Would you swap your last salami for some 1s and 0's or for a length of rope and some rice?
Nobody gets my last salami but me! Seriously though, what I'm suggesting is that initially when SHTF looms people might rush to Bitcoins looking for a safer haven. Whatever few physical PMs are available at that time will basically evaporate in the first wave of panic and if the whole global financial system then comes down there may be nowhere else to go. People who went into Bitcoins intending it to be a temporary transition to a safer currency or asset....are stuck there. But atleast they'll still be there when electricity comes back.... As for post SHTF, a primitive barter system just isn't going to be practical. Unless we totally devolve back to the dark ages and start murdering each other for beans and rice then we will have to (at a minimum) find a smarter way to barter until a new currency can be established. I guess my point is that firstly, Bitcoin may survive a SHTF scenario and secondly, maybe it's potential function as an electronic barter system and it's public decentralised ledger might make it a useful interim until new currency is established. I realise that at this point I am sounding a bit like a Bitcoin plant - but I am not. (I currently own zero crypto-currency) Just trying to think a bit outside the box and come up with some viable SHTF contingency plans and figure out if crypto currency should be part of them.
I cant speak for other people bugged but in your scenario bitcoin would be one of the last things I would put anything of value into...Give me something tangible.
I think so during an economic collapse. for a time at least I sure hope so anyway, A level of commerce will still exist and with MEGANET launce coming soon we will have a decentralized Internet that runs on idle capacity on peoples phones. Also will only have ability for crypto transactions. the framework for a functioning system free of the debt ponzi and govenrment meddling is being put in place. hopefully it happens in time.
Yes, it's very interesting. I finally bought some Bitcoin to try them out and am waiting for good opportunities to accumulate from here. I'm not surprised Bitcoin got sold out in this initial wave of selling. A mild-ish stockmarket "correction" would usually see people pulling back from riskier investments into cash or conventional currency. It's only if/when those banks (and currencies) themselves come under pressure and we start to get talk of pending capital controls that I'd expect Bitcoin to be a potentially attractive alternative. But we will see. I'm putting my money where my mouth is, so who knows whether the gambit will pay off
