Bitcoin has risen from the dead so many times, it makes Lazarus look lazy. Yet its doubters persist: Bitcoin is a bubble, they say; a risky speculation with little chance of ever becoming an established form of money, they shout.
But Bitcoins obituarists are not just mistaken: they are cast iron, copper-bottomed, 180 degrees wrong. Because Bitcoins success isnt speculative, its a certainty. Or at least, as certain as anything can be in the world of finance.
Why am I so sure? Like any other Bitcoin supporter, I believe in the brilliance thats baked into Bitcoin at the technical level. I believe in the fundamental value bitcoin holds for an individual's financial sovereignty. I believe in its capacity to move wealth through time. And perhaps most importantly, I believe it is 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 being embraced by everyone from institutions to governments to ordinary savers. Despite the press being fixated on price, Bitcoin continues to pass many structural and cultural adoption milestones with rapidity and ease.
All the evidence heralding Bitcoins rise to reserve status is there. All you have to do is look.
You dont have to search too far to find disquisitions on Bitcoins technical and theoretical brilliance, so Ill keep my own precis brief.
When fiat replaced the gold standard half a century ago, the worlds bankers (including central bankers) discovered a multitude of ways to debase the currency. President Bidens $3 trillion splurge is only the latest example of paper moneys malleability. Conversely, and as more people each day are realizing, Bitcoin cant be inflated: there is a hard cap of 21 million coins. Theres simply no way to print or create more of it out of thin air.
Bitcoins other advantages include the fact that, being digital, it does not require physical infrastructure to store. No vaults, no heavily-guarded vans or aeroplanes, no Fort Knox. You can transfer a billion dollars worth with a couple of clicks. And then theres the fact that Bitcoin is not controlled by a central authority, which has rendered any attacks (and there have been a few) ineffective.
That, in a nutshell, is why Bitcoin ought to become the worlds reserve currency. Now lets look at why it will.
We dont need to speculate about Bitcoins rise to reserve currency status because its happening already. No, governments are not buying it or issuing bonds priced in BTC yet. But who says you need a green light from the government before you start putting funds into a safe haven?
Several very large public companies have already started converting their fiat balances into bitcoin. And why wouldnt they when, as Microstrategys CEO Michael Saylor says, holding cash is like sitting on a melting ice cube? With businesses like Tesla, J.P. Morgan and Goldman Sachs buying big tranches of Bitcoin and opening trading desks, and as loose monetary policy erodes fiats value yet further, were already a long way down the road to reserve currency status.
There will be no big Aha! moment, when the Fed admits fiat was a mistake and starts converting to bitcoin. And there doesnt need to be. When private companies, corporate treasuries and ordinary citizens adopt Bitcoin as their go-to savings asset, everything snowballs from there.
Theres another key driver of adoption thats rarely mentioned. Its often forgotten that politicians are people too, and if theyre smart their financial advisors will be urging them to hedge against the coming one world currency, one world tax system, and ever-surveilled economic paradigm with bitcoin. The government's hypocrisy is going to become increasingly evident as governments continue to speak against bitcoin when its own members have holdings themselves.
None of this is meant to give the impression that Bitcoin will follow a single, arrow-straight pathway to hegemony. Even our community disagrees on how the Bitcoin network should develop: some say its perfect as it is but others think theres more work to be done on UX, infrastructure and blockchain-based financial services. Its the same with regulation, with opinion divided on whether bitcoin ought to be regulated or if it should not (or cannot) be subject to oversight and control.
There is wisdom in all these views. But however bitcoin develops, one inevitability is that attempts to kill it will fail. Countries like India and Pakistan have tried to ban holding or transacting bitcoin, only to be defeated in the courts or simply by the technical impossibility of stopping peer-to-peer transactions.
My own view is that regulation is an inevitability. And as such, the best option is to preemptively gun for sensible and industry-led frameworks. And it is my hope that governments will engage in constructive dialogue with those who understand Bitcoins technological and monetary characteristics. Postponing the inevitable does no favors for anyone, but through engagement and collaboration we can build a new economy thats fit for our increasingly digitally-connected lives.
Yes, regulation is a slow, often ponderous process. But the sooner we have clarity over how governments will officially view Bitcoin - whether a black, white or grey economy - the faster we can finally deliver solutions that work for everyone. We, along with many other financial experts, are waiting in the wings, always willing to engage with governments and regulators so that together we can make the inevitable work for everyone.
This is a guest post by Nik Oraevskiy. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
See the original post here:
The Inevitability Of Bitcoin Supremacy - Bitcoin Magazine
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