Bitcoin has risen from the dead so many times, that makes Lazarus lazy. Yet its skeptics persist: âBitcoin is a bubble,â they say; a “risky speculation with little chance of ever becoming an established form of money,” they shout.
But Bitcoin’s obituaries aren’t just wrong: they’re cast iron, copper bottom, 180 degrees. Because Bitcoin’s success is not speculative, it’s a certainty. Or at least, as certain as everything may be in the world of finance.
Why am I so sure? Like any other Bitcoin supporter, I believe in the sparkle that lies in Bitcoin at a technical level. I believe in the fundamental value of bitcoin for an individual’s financial sovereignty. I believe in its ability to move wealth over time. And maybe more importantly, I think it’s the best way to survive the tectonic economic shifts we are witnessing in the world today. And we “believers” are no longer alone. Bitcoin is now adopted by everyone from institutions to governments to ordinary savers. Although the press is obsessed with price, Bitcoin continues to hit many structural and cultural adoption milestones with speed and ease.
All the evidence for Bitcoin’s rise to reserve status is there. All you have to do is watch.
The orange standard
You don’t have to look too far to find dissertations on the technical and theoretical brilliance of Bitcoin, so I’ll be brief.
When fiat replaced the gold standard half a century ago, the world’s bankers (including central bankers) discovered a multitude of ways to depreciate money. that of President Biden $ 3 trillion worth of madness is just the latest example of the malleability of paper money. Conversely, and as more and more people realize every day, Bitcoin cannot be inflated: there is a hard cap of 21 million coins. There is simply no way to print or create more from scratch.
Other advantages of Bitcoin include the fact that, being digital, it does not require a physical infrastructure for storage. No safes, no vans or heavily guarded planes, no Fort Knox. You can transfer a billion dollars worth with just a few clicks. And then there’s the fact that Bitcoin is not controlled by a central authority, which has made all attacks ineffective (and there have been a few).
This is, in a nutshell, why Bitcoin should become the world’s reserve currency. Now let’s see why.
The route to reserve change
We don’t need to speculate on Bitcoin’s rise to reserve currency status, as it’s already happening. No, governments are not buying it or issuing BTC-listed bonds yet. But who said you need the green light from the government before you start putting money in a safe haven?
Several very large state-owned companies have already started converting their fiat balances into bitcoin. And why wouldn’t they do it when, as Microstrategy CEO Michael Saylor says, holding cash comes down to sitting on a melting ice cube? With companies like Tesla, JP Morgan and Goldman Sachs buying large slices of Bitcoin and opening trading desks, and as accommodative monetary policy further erodes the value of fiat, we are already on the path to currency status. reserve.
There won’t be a big “Aha!” moment when the Fed admits fiat was a mistake and starts converting to bitcoin. And there is no need for it. When private companies, corporate treasuries, and ordinary citizens embrace Bitcoin as their preferred savings asset, it all starts there.
There is another key factor in adoption that is seldom mentioned. It is often forgotten that politicians are people too, and if they are smart their financial advisers will urge them to protect themselves against the future global currency, the global tax system, and the ever-watched economic paradigm with bitcoin. The government’s hypocrisy will become more and more evident as governments continue to speak out against bitcoin while its own members have holdings themselves.
Manage the transition
None of this is intended to give the impression that Bitcoin will follow a single straight path to hegemony. Even our community does not agree on how the Bitcoin network should develop: some say it is perfect as it is, but others think there is still work to be done on blockchain-based UX, infrastructure and financial services. It’s the same with regulation, with mixed views on whether bitcoin should be regulated or whether it should not (or cannot) be subject to oversight and control.
There is wisdom in all of these views. But whatever the development of bitcoin, one fatality is that attempts to kill it will fail. Countries like India and Pakistan have attempted to ban the holding or transaction of bitcoin, but have been defeated in court or simply by the technical inability to stop peer-to-peer transactions.
In my opinion, regulation is inevitable. And as such, the best option is to preemptively launch sensible, industry-led frameworks. And I hope governments will engage in a constructive dialogue with those who understand the technological and monetary characteristics of Bitcoin. Delaying the inevitable doesn’t benefit anyone, but through engagement and collaboration we can build a new economy suited to our increasingly digitally connected lives.
Yes, regulation is a slow, often cumbersome process. But the sooner we know clearly how governments will officially view Bitcoin – whether it’s a black, white, or gray economy – the sooner we can finally come up with solutions that work for everyone. We, along with many other financial experts, are waiting behind the scenes, always ready to engage with governments and regulators so that together we can do the inevitable work for everyone.
This is a guest article by Nik Oraevskiy. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.