Could Bitcoin be a neutral alternative to the petrodollar?

The whole petrodollar thing is a major factor in the US-Iran conflicts. If they can't sort this out peacefully, what happens next? Could Bitcoin step up as a substitute for the petrodollar? Iran looks eager to ditch the petrodollar, while the US isn't keen on using currencies from other nations like China's. So why not consider Bitcoin or other cryptos as a neutral and safer choice for both sides? Any major countries out there that are really into BTC and might be pushing for this?

They traded crude oil gold in the past during economy crises. United States currency was backed by gold. The world later shift to it, and not affected by world war II. But United States later stopped backing their fiat with gold. Even if all trades can not be in bitcoin, why not part of it. Bitcoin will not later disappoint. It is a very good alternative to fiat but people will use its volatility as an excuse. Iran which the trade to be in Yuan.

The volatility will be the reason why bitcoin will not be used as an alternative for the pertodollar market. Iran has asked to be paid in Yen for vessels crossing the strait of Hormuz but I don’t think the yen will be an alternative to the US dollar. But all this about an alternative to the petroldollar market now is because of the disagreement between US and Iran. Negotiations can be made and if the differences between America and Iran can’t be solved they can still agree to let the economy go back to normal and back to the petroldollar market now.

Based on my experiences exporting goods worldwide, the rise and fall of the USD alone has a big impact on demand, so your idea using Bitcoin for payment settlement replacing petrodollar is not wise and it is unmanageable risk. Main crucial point of energy supply is stability needed because it is daily vital needed with big volume and base on long term contract, so price stability and predictability are its main foundation, it is very contradictory compared with Bitcoin. When government demanding Cost certainty, bitcoin creates value uncertainty, can you imagine how stressed the officer in charge if the price of bitcoin suddenly rises and they have to secure supply with purchasing oil continuously because they depending on import. Lets take simple simulation : A seller country with demand 1 million barrels/day B buyer country oil price USD 80/barel Cost calculation : Using USD with fluctuation figures +/-2% Highest cost : USD 78.4 million Lowest cost : USD 81.6 million exchange rate losses are still tolerable Using Bitcoin with fluctuation figures +/= 15% in a week Both seller and buyer can caught on high potential untolerable loss, can you imagine ripple effects on the real economy ?

It's already a broken relationship between this two countries, I don't see them coming to a round table and having a discussion on what currency to settle with while going into a business. Certainly Iran are not going to do any business using USD but if they should settle for bitcoin it is something they will have to look at critically, especially when it comes to volatility, however on the negotiating table Iran are the ones to call the shot at least 70%, else the entire negotiation would not see the light of the day.

Its obvious that Bitcoin is not an option for now under consideration by both countries, instead Iran is looking at de-dollarization and using the Yen in place of Dollar,  but the U.s is willing to fight for their dominance and this is where all the issues lie. Bitcoin is riddled with volatilities and speculation and without a stable price margin, it would be a difficulty to introduce it as a currency for buying and selling oil. So many other factors are involved but we just have to keep an open mind on the possibilities that are available.

Do they face the same barriers and constraints as blockchain when using it for this agreement, or are those limitations specific to Bitcoin?

I do not think I understand your question, but they do not face any constraints if they will want to use bitcoin for it, no barriers will be for bitcoin. Each countries can even decide to have their own mining pool in case of transaction censoring but I do not think it can get up to that.

Everybody is free to use Bitcoin, but we prefer a Bitcoin economy for people who mostly exchange bitcoin for goods and services (that are safe and mostly useful to the Bitcoin Network) rather than for fiat currencies. The latter is part of the reasons for extreme price volatility Bitcoin experienced in the past, so we need to reduce that. I think it is the path the warring countries would likely follow if they choose to use Bitcoin as payment method. We need mostly people who accept bitcoin and hold, they are those who will help create the needed less extreme negative price volatility

Most businesses use the $ to buy, no chinese will force a buyer to get yuan. The state level is of no importance to us.

The possibility of Bitcoin been used as a payment system to be use international oil trade may not be totally ruled out of the equation. Because currently there is uncertain when it comes to the dollar as the medium of exchange. Currently Iran is considering the Chinese yuan to be used as medium of payment. There are different groups and countries which is coming up to directly oppose the use of the dollar not just in the oil sector but, also in trade and investment which involves international businesses.

Anyone that proposes this simply doesn't understand the scale of money involved and being traded every day as it relates to oil dollars. Bitcoin simply cannot handle that much trade and it would be an incredibly ineffective way to settle all the low level transactions. The dollar is used because it is flexible, it can be inflated, which is more of a side benefit to America but it is a system that has worked reasonably well up until now. China is an incredibly insular and opaque government, which will never have enough trust to be a reserve currency in it's current form - nor does it even want that responsibility, because it can manipulate the Yuan much more easily right now for different economic benefits. We are likely to drift towards more of a basket of currencies, because lots of people are dropping the US dollar, instead.

Isn't the petrodollar part of history? I do remember that the agreement between Saudi Arabia and the USA for selling Saudi oil for US dollars had ended last year. Saudi Arabia started accepting Chinese yuan for their oil. No country around the world would sell oil and gas for Bitcoin payments. Not just Iran. Saudi Arabia, Qatar and the other small Persian Gulf countries won't accept crypto payments for oil and gas. They would most likely stick to national fiat currencies, like the yuan instead of the US dollar. Trumps doesn't care that much about Iranian or Arabian oil being sold for US dollars. He just wants the oil export towards China to be disrupted.

I don't know how interested Iran will be in using Bitcoin; they may be open to using anything else that is not USD, but the US will not agree to use Bitcoin. Using Bitcoin defeats their whole purpose. The ideal scenario for the US is for Iran to use the dollar in trades,, which might strengthen the value of the dollar by increasing demand. Iran has been trying to move away from the dollar since the 2010s. If a country like Iran starts to fall back fully on the petrol dollar system, it favours the USD. Iran would like the freedom to use whatever currency they choose, so I guess they may use Bitcoin because i have seen some reports of them accepting stablecoins, but thos reports dont make sense to me, so I don't take thems serious. The US on the other hand cannot accept anything that is not the dollar.

I think the US really made a big mistake with this whole Iran situation. Because apart from the pressure being put on the global economy, Iran is also showing that there are other ways to move away from the petrodollar system by using alternative payment methods. If they keep exploring these options and the US doesn’t find a way to strengthen its economic influence like the usual sanctions, it could encourage other countries that are already frustrated with US economic pressure to start looking for ways to avoid using the dollar. It might not happen immediately, but over time, more countries could begin to act in their own interest and look for alternatives, whether it is crypto or other systems.

I wonder what was your impression of the US military before DT started with his gun boat diplomacy?