Bitcoin Q&A: Hyperbitcoinization


[AUDIENCE] My question is about hyperbitcoinization.
Has it started already? How or when will it start?
What will be ‘the last straw that breaks the camel’s
back’ for hyperbitcoinization on a global scale?
How do you foresee governments responding to it?
[ANDREAS] How many people here have heard of,
or understand, the term “hyperbitcoinization”?
Not enough, great. Let me let me start by clarifying.
“Hyperbitcoinization” is this idea of a tipping point…
at which the sustainability of a fiat economy, especially
in the presence of a vibrant cryptocurrency economy,
is no longer there and people abandon
traditional fiat [currency] in droves.
Where there will be a mass conversion over to Bitcoin.
To me, that is a maximalist position that is more or less
a fiction. I do not believe we will have a moment when…
Bitcoin will become the dominant replacement
for all fiat, I don’t believe that will ever happen.
In fact, if it was happening, then we would
have a full-on currency war in our hands,
and we do not want to engage in that
with nation states that have armed thugs.
That is not [good for] your personal safety.
All of you people who are driving around
in Lamborghinis with bitcoin license plates…
[Laughter] You will be the first ones to go.
But then again, I don’t think hyperbitcoinization
will happen, certainly not on a global level.
There might be tipping points where certain countries
suffering from irreversible currency crisis and collapse,
that cannot establish pegs to [other] currencies like the
U.S. dollar or afford to launch a new paper currency…
The cost of printing paper currencies
is in the tens of millions of dollars.
Very often, the countries having these collapses realize
that they can’t even afford to print the new currency.
That becomes a gating problem. We have seen that
in Venezuela, Zimbabwe, Brazil, and a few other places.
The cost of printing exceeded the
resources the government had.
It turns out that is the cure for inflation:
run out of money to print [more] money. [Laughter]
In some countries, as a last resort, you will see people
choosing to conduct the majority of their business…
in cryptocurrency because it is the best, most
portable and accessible alternative out there.
I think we will see that happen on a local basis,
not in a massive global tipping point where…
everybody is fleeing for the exit.
At least, I hope it doesn’t. That is an apocalyptic scenario
which will disrupt the world economy so badly.
We don’t want that. Nobody should hope
that the world economy collapses just so…
everybody can see the truth about Bitcoin.
That is cutting off your nose to spite your face.
“Oh great, now we all have bitcoin!” “Yeah!”
Also, we will belong to marauding bands of Mad Max
personalities, fighting for scraps of food. [Laughter]
“But hey, we have Bitcoin! Awesome!”
“See? I was right!” you say, as you gun down…
a person who is trying to take the piece
of bread out of your mouth. [Laughter]
Yeah, let’s not do that.
I don’t believe in hyperbitcoinization.
I would hope we see a much more orderly transition
to a pluralistic world where people have many choices,
and their freedom has increased,
without first hitting rock-bottom.

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