There is a concept known as “hyperbitcoinization” in Bitcoin circles. The theory goes that one day the governments of the world will have failed so badly that only Bitcoin will be valid tender. In that world, things will be quite different. It’s fundamentally harder to tax BTC, after all, and that’s only the first major difference.
A hyper-Bitcoin future would mean that a significant amount of the world’s energy would be directed at securing the Bitcoin blockchain. Whether in the near or distant future, that could have consequences, including driving up the cost of energy around the world. The other likely thing to happen, however, is that miners will become infinitely more efficient in their power usage.
Bitcoin's monetary economics will drive incredible innovation in energy and thus Bitcoin will drive incredible innovation down entire industrial structures of production. pic.twitter.com/JfshO7O7V9
— GreatAmericanMining (@GAMdotAI) April 19, 2020
One question that lingers when this discussion is raised: how many will really be their own banks in a Bitcoin world? Coinbase effectively acts as a BTC banking institution; they allow you to exchange it and store it. They are, of course, one of many platforms. In a future where people no longer trust fiat banking and currency, people would likely turn to companies like Coinbase to store their funds.
The hyper-Bitcoin future theorization excludes the possibility that Bitcoin, too, loses all its values in this catastrophic event that has led to the downfall of fiat currency. While some probably see the question as absurd, recent events show us that mostly anything is possible. Witness the US government doling out half a trillion dollars to citizens, and even more to companies. Now there’s talk of printing even more money for the occasion of the coronavirus.
How Do Things Function Without Fiat?
Many of Bitcoin’s staunchest believers are also anarchists, who have no interest in supporting a government. But a time of pandemics does make one wonder what life would be like without a government. However, now it’s clear that the US government, at least, is going to act irresponsibly with its checkbook. How long can that go on, before something bounces hard?
So in this prospective future, there would be limited if any government. Who knows what happens to the huge sector of the economy that currently works for the government. Where do they go?
While there are plenty who believe in a future with many cryptocurrencies, there are still others who think that not only will the fiat economies fail, but Bitcoin will actually be the only alternative. All other cryptocurrencies will fail, in this vision, by nature. Called Bitcoin Maximalism, it looks more absurd the longer you think about it. There’s no reason so far, and none to predict in the future, that Bitcoin Cash and Bitcoin can’t co-exist. The same goes for the rest of the cryptocurrencies.
In that future, things would cost very little in Bitcoin. But the problem with this is that a very low number of people already own the majority of Bitcoin, and so it would be a bit dystopian to consider how the economy would work. Only services that the super-rich hodler class want will be necessary, because only they can truly afford anything? Why would people attribute value to a currency that would put them at more of a disadvantage than they already are?
These are, of course, the types of questions that some don’t want to ask. But it’s worth bearing in mind that to this very day, Bitcoin is but an exotic trading instrument.