Hyperinflation, Broken Global Finance Just Might Usher A Bitcoin Standard
Going back 1000 years, the average lifespan of a fiat currency spans about 35 years. History is littered with a long list of fiat currencies that collapsed on account of corrupt monetary policy.
Although the hyperinflation that we’re seeing today is not exactly a rare event on the grand scale of things, it is also one of the most telling precursors of a fiat currency well on its way to collapse.
One would expect that large swathes of the global population to be hurriedly crossing over into crypto now, but it appears a little more prodding than hyperinflation and currency collapses would be required.
A well-designed cryptocurrency, like Bitcoin, can help us escape the fate of collapsing currencies. The global fiat system, however, is so entrenched that cryptocurrencies and blockchain technology break the very worldview upon which we have invested most of our education and careers.
The pace of global crypto adoption is expectedly slow, yet every time a Tesla, Square, Meta, Block Inc. a large pension fund, or large hedge fund takes such a strong Bitcoin (BTC) position as we have seen in the last few years, the crypto conviction index rises by a few degrees, even amongst the entrenched beneficiaries of the global fiat system.
Steps To A Bitcoin Standard and The Bitcoin Circular Economy
Interestingly, there’s a growing subset of people in the world fully plugged into a Bitcoin Standard. They have optimized their lifestyle to holding, lending, borrowing against, getting paid in, and accumulating their BTC.
These are the early adopters of a would-be Bitcoin Circular Economy - an open-source meritocratic market ecosystem where goods and services are freely traded for BTC.
Given that Bitcoin is trustless, immutable, decentralized, globally accessible to anyone, and free from government censorship/state regulation, it offers itself up as the best fuel on which such a Circular Economy might run.
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A Bitcoin Circular Economy is the world’s best free market experiment yet, detached from state interference in the form of regulations, quotas, and subsidies, and powered by the world’s most sound money.
In a well-oiled BTC Circular Economy, meritocracy trumps state permission. The skills, ideas, effort, and character of market participants matter much more than other factors elevated by the current global fiat matrix. The transition into a fully-fledged Bitcoin Standard involves hyperbitcoinization, which would typically happen in the following stages:
As the current global reserve standard, the US Dollar currently enjoys massive network effects since it’s used as the default medium of exchange for global business. It’s going to take network effects of a similar proportion for Bitcoin to replace the US Dollar as the global reserve currency.
Like gold, Bitcoin is on its way to attaining a sizeable market capitalization as a digital store of value for investors - digital gold.
Not many of the vast majority of stores and businesses across the world are known now to accept any physical gold in exchange for their goods and services, yet all mined gold above the earth’s surface maintains a total market valuation of just above $10 Trillion.
Given its properties, Bitcoin retains the inherent ability to evolve into a global medium of exchange and unit of accounting. Besides being digital gold, one BTC is easily subdivisible into 8 decimal places and instantly transmissible to anywhere in the world.
Serving all three major functions of money – digital store of value, global medium of exchange, and default unit of accounting- it’s only a matter of time before Bitcoin (BTC) becomes the default global reserve currency, surpassing every other ‘money’ in valuation.