There are countless sources of mainstream information that are typically just generating clicks through fearmongering about market volatility, but very few discussions about the real world economic ramifications of a future where crypto coexists or replaces fiat in the future. I know it won’t happen next week, or next year, but perhaps decades from now.
Does Bitcoin, or crypto broadly, actually make anyone wealthier in the end if our systems of measuring value eventually transition to it? Or is the reality that things remain much the same way they are now where parallel economic systems exist alongside one another vying for adoption in perpetuity? This thought exercise is equal parts crypto speculation and economic theory.
I'm curious to read about its potential true value in a post-adoption (post-fiat?) economy, not as a fungible currency but as a representation of value. There are sci-fi notions of a time where we'll have neural brain links that connect us to an augmented reality where we just think of a financial transaction and it pops into existence and is immediately validated. And maybe that might be the case one day using a type of blockchain technology that hasn't been created yet.
But the world is also crazy enough that in a hundred years, for whatever reason, we could still be minting physical coins that represent virtual assets in the same way we've minted them for centuries to represent something else. Maybe there's some cataclysmic event, or we go through an arrested economic development between fiat and crypto where that transition experiences a failure to launch. It's probably unlikely, but who knows. It's not common for the future to be what we envision.
We all read the headlines about Bitcoin hitting six or seven figures, and I'm not debating the possibility. But if fiat becomes displaced (in whole or part) by crypto markets, then are fiat comparisons even relevant as a basis of comparison in the future? If you own a Bitcoin in 2050 and it's worth a million dollars, what does it mean to have a million dollars of a currency whose relevance is not what it was thirty years prior? There have been wealthy people of previous civilizations who had stacks of whatever their currency was, but if its buying power vanished, then the market value of their currency is of no consequence today.
It's possible my analogy is flawed. But are you still a wealthy person in 2050 if an average house costs a million dollars? Or an average vehicle? Or an average tax return? Anyone who's seen the movie Idiocracy might remember the stoned doctor laughing as he prints out a hospital receipt for five billion dollars. This is all exaggerated math that may sound silly, but it's rooted in truth because hyperinflation has actually happened and led to eight figure loaves of bread. I know it sounds like a ridiculous or uneducated stretch to say something like this today, but what if a loaf of bread costs a Bitcoin in the future?
Of course, all things being equal, we are better off having Bitcoin than not having it at all and I am very much invested in it, but maybe it doesn't mean we’ll inevitably be independently wealthy in the future either. If crypto becomes a normalized representation of value that displaces fiat, what is the argument that HODLers wouldn't still be in a similar economic situation decades from now as they are today, if fiat erodes to obsolescence or irrelevance? Would crypto value still be as theoretically esteemed if it is swapped out as a dominant substitute of value? Perhaps my reservations are misplaced, but I wonder whether or not it will mean we'll be as flush as we imagine ourselves to be in a post-fiat world.
I'd welcome links to any sources from smart minds that speculate on such an economic transition, about what it might really mean to own a Bitcoin (or ten, or a hundred) in the future.
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