Hyper-Bitcoinization
How Governments and People will Deal with Bitcoin
This edition of the newsletter explores a hypothetical future wherein Bitcoin consumes the entire planet. Not in a literal sense, but in the sense that people and governments will use, transact, and otherwise adopt Bitcoin as money. HyperBitcoinization means different things to different people. Most of us have not heard this word, or considered the possibility of Bitcoin one day becoming the global reserve asset. This will be a thought exercise intended to stretch your conceptions of what is possible with Bitcoin, and seed wonder into your imagination.
Defining Hyperbitcoinization
There is no clear consensus on what a Hyperbitcoinized world may look like, so this definition is entirely my own. I admit, it is a compilation of thoughts and hypothesis gathered from the people that influence my thoughts and opinions.
Hyperbitcoinization means that the world denominates value in Bitcoin. This will require that everyone think of value in terms of Bitcoin. Right now, the average individual thinks of value in at least two ways.
Their Local Currency (CAD, EUR, INR, CNY)
The Global Reserve Currency (USD)
International business is typically conducted in USD. World commodities and stocks are spoken about in terms of how many USD they are worth. It may be said that the world is in a “HyperDollarized” state.
In order for the world to transition to a hyperbitcoinized state, world governments, international business, and individuals everywhere will need to unilaterally adopt Bitcoin as the worlds Unit of Account (UoA), Store of Value (SoV), and Medium of Exchange (MoE).
Bitcoin Bitcoin Everywhere
In a hyperbitcoinized world, the internet would be everywhere. This is already starting to be the case with several initiatives taken on by world billionaires such as Elon Musk. The Star Link project aims to beam the internet to the entire surface of the earth. The project is already being piloted in remote areas of Canada with reports of great success. The internet being omnipresent on the earth is a prerequisite of hyperbitcoinization. At this point, every single person on the planet gains access to finance in general. They may open a bitcoin wallet (for free) and safely, and instantly accept payment for goods or services rendered. This is a complete revolution compared to our current financial paradigm that billions of people do not have access to. A hyperbitcoinized world is a world of financial inclusivity.
If you’re new to Bitcoin and are looking to get a little introduction, my partner, Mrugakshee, will be hosting an Intro to Bitcoin webinar this Saturday, Jan 23, at 2:00pm AST. Register here!
Government Currencies Remain
I cannot imagine a world where government currencies completely go away, at least not in the short term. I can however, imagine a world where the US dollar is hyperinflated into oblivion. This would massively devalue the reserves of every country that backs their own currency with the USD. What I can see happening is countries returning to a gold-backed standard. However, this time, it will be backed by Digital Gold, AKA, Bitcoin.
Print More Money Infinitely
Right now, governments are printing money faster than any other period of time in recent history. The fact that they are doing this is bringing them closer to the reality of the failure of their respective FIAT currencies. Hyperinflation is one of those “gradually then suddenly” events. Even government officials admit that they can print money infinitely. In a hyperbitcoinized world, this is no longer possible.
Bitcoin has an absolutely finite supply. This cannot be changed.
If governments were backing their currencies with Bitcoin, then there is a cap on the amount of money that can be printed.
Government Currencies Evolve
In a hyperbitcoinized world, government currencies will have evolved to the point of being entirely digital. The world is calling these things “Central Bank Digital Currencies” or “CBDC’s” for short. This is the next evolution of government money, and stands to be a real threat to the privacy and security of your monetary freedom as an individual. A central bank digital currency has the ability to instantaneously inject cash into your bank account in times of peril such as during the pandemic. On the other side of this coin, is the ability to shut off your money at the click of a button. Cryptocurrencies are forcing government currencies to upgrade their money as cryptocurrencies have them beat on almost every level except for stability in value.
Bitcoin in the Background
Bitcoin has been described as the lifeblood of the internet of money. Just like how the average individual doesn’t need to know how HTML, HTTPS, and TCP/IP work, the average individual will not need to know how Bitcoin works. There will be so many businesses, and applications built on top of Bitcoin, that completely obscure what is happening behind the scenes. Bitcoin will be used to settle, and transfer billions of dollars per day, and what the average individual will see, is an interface that is native to their geographic place on this earth.
One company in particular is looking to create a seamless money transfer experience from anywhere in the world. Strike.Global is a company that builds on Bitcoin in order to enable international, free, money transfer, in a single instant. If you didn’t know money transfer could be described with all of those words in a single sentence, welcome to the future.
Bitcoin’s Value in a HyperBitcoinized World
If you measured everything of value on earth today, you would find that everything is worth somewhere in the neighbourhood of $210 Trillion dollars. We can use this number to determine the upper value on the price of Bitcoin. In a hyperbitcoinized world, everything of value would be denominated in terms of Bitcoin. For the sake of this example, we can try to estimate the approximate value of 1 BTC.
Since there are 21 million bitcoin, we divide 21 million by 210 trillion and get 10 million dollars per Bitcoin. So in a hyperbitcoinized world, 1 Bitcoin would be worth in the neighbourhood of 10 million dollars. Wow.
Ep 40: What would a HyperBitcoinized world look like?
A century ago, we transacted in gold. History has recorded us using sea shells, salt, and even rhinestones as money. In this episode, we fast forward to a future where Bitcoin is used as money. What does that world look like? We explore this topic in detail on our podcast.
Listen to it on Apple Podcasts, Google Podcasts, Spotify, Youtube, or add to your RSS feed.
All The Best,
Keegan Francis
Keegan. Why can you imagine hyper-inflation of USD? Caveat: other than because it has happened in other countries. Has it ever happened to a currency considered the global reserve currency?