It’s the 21st century, and the king is dead, but a new king is rising! Blockchain and cryptocurrency are dictating a new set of rules for the digital century. When the World Health Organization declared Covid-19 a pandemic, it was clear that things wouldn’t remain the same.
The world is in the throes of a serious economic crisis, and there are real fears that a years-long recession is here with us. This same economic turmoil is playing a significant role in pushing blockchain technology and bitcoin into the mainstream. Bitcoin halving happened amid what the IMF called The Great Lockdown, in response to Covid-19.
According to the IMF, the current situation is leading to an economic downturn worse than the great depression. Muneeb Ali, the CEO of decentralized computing network and App ecosystem firm Blockstack said recently:
“Bitcoin was born during an economic crisis, and it fits that it’s about to have its most visible test before the general public, during a similar, if not more dangerous financial calamity […] it has never been a more fitting time to let people genuinely ponder the benefits of Bitcoin.”
The Flippening Moment
In the crypto sphere, flippening refers to the tipping point when one digital currency supersedes another; it almost occurred in May 2017 when Ethereum’s market cap almost reached Bitcoin’s during its surge in popularity. Some observers argue that the flippening that could bring a sea of change with far-reaching consequences will be when digital currencies supersede conventional fiat in demand.
Bitcoin is already worth thousands more than the most popular fiat currency, the Dollar, a sign of demand. We could easily say Bitcoin has already overtaken the Dollar; that’s hard to dispute on paper. As more people become privy to digital currencies, the demand will rise further along with how seriously the money is perceived.
Critics are already unhappy with the US Federal Reserve’s decision to print trillions of dollars. They have good intentions-to ease the country’s ballooning unemployment occasioned by the ongoing lockdowns. However, the effect of the move on the economy is disastrous. It is certain to cause inflation. The ripple effect will be felt by hundreds of millions of people in the developing world since the USD has been a hedge against their weak fiat currencies. This already happened in Lebanon at the end of last week.
The USD has always been the trusted fiat currency even beyond the borders of the US. Now that its supremacy is threatened, bitcoin and other cryptocurrencies will definitely become more attractive alternatives. Many countries were already looking towards cryptocurrencies even before the current crisis. Even fear that the Dollar is losing its appeal could easily hasten the process.
A Future without Fiat
A future where all currency is crypto is bright: a future where a currency’s value isn’t open to manipulation as quickly as fiat currency and one that propagates the idea of a universal basic income. It’s a future where the transaction for goods and services is handled digitally, and prices are affordable since cryptocurrencies eliminate intermediaries who take a cut.
That future will disrupt the current global economy as cash will become obsolete, true flippening; the losing party diminishes in value with nothing else to do. Governments will be hardest hit as they will lose control over currency and the ability to print more money in response to financial crises since cryptocurrencies are mined; flipping from fiat to crypto is a real prospect in our time, and could “disrupt” the way we spend and save.
Bitcoin is Anti Fragile
The price of bitcoin may still be somewhat volatile, but bitcoin HODLers can relax. They can be sure that no individual or central authority can seize or devalue their coins. The truth of the matter is that those who are losing faith in centralized financial systems wil spur bitcoin adoption. Bitcoin remains more permanent than risky as a result of its antifragility.
The cryptocurrency system is likely to extend the utilization of resources outside the control of the intentionally coordinated effort. Bitcoin is poised to eliminate the need for control. Bitcoin is the antifragile challenger of our characteristically fragile fiat monetary system.