West Hollwood CA 90069
630 506 3900
adam@adamtracy.io

The Impact of a Digital Dollar on Bitcoin?

by | Jan 21, 2022 | Cryptocurrency, eCommerce | 0 comments

Perhaps, nothing at all..

By definition, an effective currency is two things: (a) a medium of exchange; and (b) a store of value. The US dollar, for all its failings, remains the best example of a currency on the planet.

First, it is accepted universally as payment for goods and services or is easily exchanged into another prevailing currency. Thus, it is a fantastic medium of exchange.

Second, the US dollar, while no longer backed by gold or any other assets, is backed by the implied promise of the United States government. While the dollar fluctuates relative to other currencies, that fluctuation is relatively small – even during inflationary periods such as now. Thus, the US dollar is solid store of value.

Assuming that a US government-backed “digital dollar” were just a substitute for our current paper fiat currency, one can assume it would hold the same properties and be extraordinary useful worldwide as a currency.

Now, on the other hand, consider Bitcoin…

Bitcoin is a not that useful as a medium of exchange. First, adoption rates are minute compared to the US dollar and other leading fiat currencies. That is, people overwhelmingly do not accept Bitcoin as payment for goods and services. Second, Bitcoin can be brutally slow in terms of transaction speed. Compare a debit card swipe or cash transaction to a typical (non-lightning network) Bitcoin transfer. Would you want to wait at the bodega for 20 minutes just to buy today’s newspaper?

Moreover, Bitcoin is perhaps only an average store of value. Bitcoin as an asset class is exceptionally volatile. The price of Bitcoin has proven itself to routinely fluctuate +/- 5% in any given 24 hour period whereas the US dollar tends to rarely move more than +/- 0.05% over the same time period.

The grand point here is that people overwhelmingly don’t view Bitcoin as an alternative to the US dollar.

Therefore, if the Federal Reserve were to start minting digital dollars, the impact on Bitcoin may be limited. To date, Bitcoin has been the playground of investment speculators, not that of an average consumer with consumer buying habits seeking to hoard the last remaining rolls of toilet paper on the shelf.


A former professional rugby player, Adam S. Tracy brings over twenty years’ experience as an attorney, consultant and dealmaker with a particular focus on cryptocurrency, digital products, payments and immersive corporate structures. As an accomplished executive and advisor to high risk merchants and stakeholders, Adam has proven himself as a results oriented, decisive leader with proven success advising early market entrants, technology adapters, as well as established participants across a wide range of verticals. Adam Tracy’s attack-first personality allows him to excel in dynamic, demanding environments including complex corporate negotiations, distressed environments and regulatory investigations.

In addition, Adam S. Tracy also has a successful track record co-founding high risk industry ventures, building & leading cross-functional teams, and spearheading diverse corporate transactions. A serial entrepreneur, Adam has successfully started and created exits across a wide swath of markets, including various mobile SaaS ventures, nutraceuticals, peer-to-peer payment systems, and several telemarketing-based ventures. Moreover, as a recognized expert in the payments field, Adam Tracy has been a blockchain and digital currency evangelist and influencer since the early days of Bitcoin.

Utilizing his proprietary “Pre-Event Driven™” strategy for decision making, Adam S. Tracy further leverages his over twenty years’ experience to create cost-effective, value-add solutions for each client. A data-driven acolyte, Adam continually refines his strategies based on field studies and data collection. Moreover, Adam Tracy further augments his range of solutions by actively networking with regulators, liquidity providers, legal and compliance experts, deal-flow brokers, investors and management of leading high risk industry ventures.

Adam S. Tracy earned his Bachelor of Science in Computer Applications and Bachelor of Science in Finance from the University of Notre Dame. He subsequently earned his Masters in Business Administration from the DePaul Kellstadt Graduate School of Business, while concurrently earning his Juris Doctorate from the DePaul College of Law. Adam lives outside Chicago with his with his wife, son, four dogs, and two cats.

On the Web: https://www.adamtracy.io
Twitter: https://twitter.com/TracyFirm
Youtube: http://www.youtube.com/c/AdamSTracy
Linkedin: https://www.linkedin.com/in/adamtracy/
Facebook: https://www.facebook.com/thetracyfirm/
Reddit: https://www.reddit.com/user/bitattorney
Medium: https://medium.com/@adam_tracy
Instagram: @theadamtracy
Telegram: @adam_tracy
Skype: @adamtracyesq
Email me: adam@adamtracy.io

Share

0 Comments

Submit a Comment

Your email address will not be published.