In November 2019, we all know what happened with Bitcoin. The price of Bitcoin increased to around $65,000. And there were people who thought that it was time to accept Bitcoin as a payment method and way. I was one of those people as well, and I got a considerable profit also. And this was the moment when the term Hyperbitcoinization came. But what exactly is Hyperbitcoinization?
In this article, you will learn about Hyperbitcoinization and how this can make an impact on the finance system.
What Is Hyperbitcoinization?
Before starting with the Hyperbitcoinization definition, let me give you an example. As we already know how the cryptocurrency market is going, and with time more and more people are engaging in the market. And the more people engage, the more value the market is gaining. Suppose, after one or two, or five years, Bitcoin’s price would be $100,000. And Bitcoin becomes an integral part of your life.
This will be the moment when Bitcoin will be reached a point where it gets a default value system. And common people realize that this is the time to accept the censorship-resistant, borderless and digital system for any kind of transaction. When this starts happening, the mass will start accepting, and they will fuel the currency demonetization. And there will be a new publicly-driven system.
So, this is Hyperbitcoinization, when Bitcoin will become the dominant form of money. People will give more value to Bitcoin than fiat currency. If this situation happens, then there will be no monetary crisis by the central banks and government as well. And Bitcoin will be the most acceptable payment system.
As you already understand that if this happens, then the financial system of the world will change. First of all, there will be a significant effect on taxation. Secondly, the structures of businesses will change. Though there is no proven data or information on whether Hyperbitcoinization is the future or not, as cryptocurrency and metaverse are gaining popularity, who knows, maybe someday this can also happen.
Hyperbitcoinization and How It Can Change the System
I hope you are already aware of all the advantages of Bitcoin. There are also other factors that work inside and outside of your financial system. So, right now, it is hard to say what will happen. As our currency system runs, there is very little possibility that Hyperbitcoinization can take part in our current system.
Also, if there is any possibility that Hyperbitcoinization becomes an integral part of the system, Governments will take the first action against it. They will definitely attempt suppressive actions, from rationing power use to cutting internet service. If they still can’t stop this, then they may have to engage in the movement.
But you need to understand that mainstream financial organizations have already started offering Bitcoin-specific products. So, it is clear that if there is any Hyperbitcoinization, then these organizations will definitely convert to Bitccoin-based systems. They may also attempt to curb Hyperbitcoinization by alternating digital currencies or doubling down the fiat economy.
Circular Economy and Bitcoin
There is a fundamental difference between the world of Hyperbitcoinization and the current world. Right now, the price of Bitcoin can increase or decrease at any time. Suppose, today, the price of a single Bitcoin is $1,700, and tomorrow the price can be $1,800 or $1,600. But, in the world of Hyperbitcoinization, there will be no change in price, there will be no comparison with fiat currency, and most importantly, you can trade Bitcoin with any other currency. The price of a single Bitcoin will be 1BTC.
So, the financial system will be deflationary. There will be no exchange, buy or sell of BTC with fiat currency or any other cryptocurrency. Every good and service will be available on BTC, you need to buy those by spending BTC. There are already so many examples of Bitcoin’s circular economy. There are shops, websites, and businesses that accept Bitcoin as a payment method.
Also, once Hyperbitcoinization comes, there is no going back, there will be no volatility, there will be no investment, and we need to give BTC the same value as we give to our current fiat currencies. And most importantly, if there is a situation of Hyperbitcoinization, we don’t know what will be the outcomes and disadvantages.
Now, let’s try to imagine a future of Hyperbitcoinization. What will happen then? Try to guess. And let’s see how many you can guess.
First of all, the societal system will change. We don’t know, if there will be no statutory body, then how the economy will run and who will be responsible if there is any inflation. People can think how the system of paying and receiving money and how we are going to pay or get paid through the system. But, in reality, the situation will be mind-boggling.
People will go crazy for sure, and there will be so much fun to explore. But what about the problems? First of all, there will be chaos in the governmental ruling. Secondly, there will be misconceptions for people who don’t know about the new system, then there will be a financial crisis, because we don’t know how the value will be decided.
One of the biggest problems will occur when there will be any problem regarding transactions. We don’t know to whom we can take our problem. If we face any problem right now, we know where to go, and the government will take action to resolve the issue. But, in this decentralized system, who is going to take on the responsibilities?
So, is there any change of thought regarding Hyperbitcoinization? I am sure that there is, if you say no. Then you are lying. If I have to put my perspective, then I will say that government should participate in the payment system. Otherwise, there will be chaos, and if somebody loses their money, they will not have any place to go and ask for help.
Please let us know in the comment section below if you have anything to ask.