Hyperbitcoinization: A future utopia for global finance begins for Bitcoin idealists By breaking Bitcoin fiat hegemony. This suggestion of civilization has appealed to cypherpunks since the early days of Bitcoin. Cryptocurrency has now become mainstream as everyday people are pushed more and more by failing economies and government policies.
Daniel Krawisz, co-founder of the Satoshi Nakamoto Institute, describes Bitcoin’s rise to power as “hyperbitcoinization.” This will result in part from bad politics, failing economies and excessive government intervention. It will force people to give up fiat hegemony.
Krawisz says that “Bitcoin-induced currency demonetization, or hyperbitcoinization,” is what could happen if “any failed currency” stands “in the way of Bitcoin’s world dominance.” “If that happens, the currency will quickly lose value as Bitcoin replaces it.”
Recent government crackdowns on political protests show that whenever pushed, people move to the next technology to assert their agency. As the world enters an uncertain season of recession, hyperbitcoinization may finally become a reality.
Hyperbitcoinization: the failures of fiat money
Lebanon, Turkey, Venezuela, Cuba, Zimbabwe and a number of other countries have faced the problem of hyperinflation. Fiat currencies are racing to the bottom, prompting governments to implement dubious policies to stave off the rot.
But the imposition of special powers by presidents, price controls, and surrogate currencies also compete with economic sanctions, bad governance, and other structural factors that undermine government fiscal control efforts. It also denies citizens control over their money.
The humanitarian failures of fiat money were evident in Venezuela in 2019. Families were forced to buy rotten food and put their children up for adoption due to lack of basic goods. According to the latest official estimates, inflation in Venezuela was 151% in May.
Such tragedies create a sense of urgency for an alternative currency that is not subject to the whims of central banks. In Lebanon, failed government policies have stolen people’s savings and pensions. Its national currency has also lost its value sharply.
Referral to Bitcoin
According to a recent report by CNBC, people in Lebanon are increasingly turning to Bitcoin to protect the value of their money after a severe financial crisis caused by decades of “costly wars and bad spending decisions.”
The report states that citizens are using Bitcoin as a means of payment for both domestic and foreign transactions. USDT stablecoin is also popular in the country. Although the use of cryptocurrency as a means of payment is not allowed by the Lebanese government, people do not care.
CNBC reports that businesses are promoting the cryptocurrency as an acceptable payment method on Instagram and other social media platforms. He added that the banking system is broken and the local Lebanese pound has lost 95% of its value since 2019. Banks limit withdrawals.
Rising global food and energy costs stemming from the Ukraine war and the COVID-19 pandemic have worsened food shortages and fueled inflation further this year. According to official data, annual inflation in September was 162%, which is one of the highest indicators in the world.
“Usage of USDT is widespread,” said a user identified only as Gebrael. He added:
“There are a lot of coffee shops, restaurants, and electronics stores that accept USDT… so it’s convenient if I need to spend from my bitcoin savings instead of fiat. “The government has bigger problems than worrying about some stores accepting cryptocurrency right now.”
Economically failed and isolated governments have historically resorted to obsessive control of institutions and repression of citizens when protesting. In Zimbabwe, where inflation hit a record high of 269% in October, authorities have cracked down on dissent.
Zimbabwe is often cited as a good state for Bitcoin adoption due to its longstanding currency problems. In January 2019, the government banned popular social networks to contain the protests and banned coverage of the government’s brutal crackdown.
According to information, the pressure resulted in the death of 12 people and more than 60 bullet victims were hospitalized. Fighting was widespread. However, repression has opened up new technological possibilities in the past.
Zimbabweans responded to the complete shutdown of the internet by moving to Telegram. Telegram is designed as a communication program to resist surveillance and pressure. Citizens have also unlocked banned social networks, Whatsapp, Facebook and Youtube through virtual private networks (VPN).
As citizens reclaim their democratic freedoms through alternative communication channels, there is reason to believe they will follow suit to reclaim their financial freedoms through censorship-resistant currencies like Bitcoin.
Indeed, Bitcoin continued to flourish on social media after the country’s central bank, the Reserve Bank of Zimbabwe, banned cryptocurrency trading and shut down two exchanges in May 2018.
But trade did not die with the ban. Instead, it reinvented itself on Whatsapp through peer-to-peer commerce. Over time, cryptocurrency enthusiasts have created powerful Whatsapp groups where they share information and news about developments in the sector.
Now they use similar groups to buy and sell cryptocurrencies using connections they already know or new ones. Building trust in this community is key to building trust and preventing theft.
To combat inflation, the Zimbabwean government has announced a scheme that allows ordinary people to buy gold coins using the local currency. The plan also aims to help people in a country that has seen the worst inflation in history, at 4 billion percent, preserve their worth.
Restoring personal financial freedom
Some countries are clearing the turf for cryptocurrency with soft-touch regulation. Others unwittingly do the same, failing to prevent inflation. This has led to a tipping point where citizens are reclaiming their freedom through alternative currencies, primarily Bitcoin.
In Turkey, the government’s crackdown on cryptocurrency exchanges has not stopped citizens from turning to BTC. In October, inflation in the country reached the highest level of the last 24 years – 86%. Turkey also banned cryptocurrency payments in 2021.
According to LocalBitcoins, BTC peer-to-peer trading in Turkey grew by 51% and 40% during Q1 and Q2 of 2022. All this happened with the depreciation of the Turkish lira. People use Bitcoin as an inflation hedge.
Chainalysis reports that Turkish citizens bought $192 billion worth of cryptocurrency from 2021 to June 2022. The country has the fastest Bitcoin adoption rates in the world.
Bitcoin continues to spread around the world. This has happened due to progressive government policies and increased user adoption. The failure of fiat currencies in emerging economies will force citizens to take back ownership of their money.
At the peak of hyperbitcoinization, Daniel Krawisz’s radical vision of financial freedom and inclusion will see citizens of poor countries transact in a borderless and unauthorized manner.
All information on our website is published in good faith and for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at his own risk.