Hyperbitcoinization is a term used to denote the widespread use of Bitcoin as a means of payment. It means that Bitcoin would be used and accepted everywhere for goods and services. If this were to happen, it would mean creating an entirely new financial system. The term was initially coined in a 2014 Satoshi Nakamoto article by Daniel Krawisz.
Hyperbitcoinization has nothing to do with the Bitcoin price. If it did occur, the price could shoot to over $1 million. But this is missing the entire point – because, at this stage, we are likely to see USD hyperinflation on a massive scale. This is what most people miss out on – by the time Bitcoin soars past $100,000, measuring the Bitcoin price in dollar terms would be essentially meaningless because people would no longer be using the USD, and we would need a new frame of reference.
Still, there is a good chance we will see a level of hyperbitcoinization in 2020 and beyond. This is due to a confluence of factors that are all coming together. There are the Presidential elections, the rise of the Chinese cryptocurrency, and Facebook’s Libra. These are all major shifts that could pose a threat to the US Dollar. Bernie Sanders, after all, wants to wipe out all billionaires and put in place free health care and free education. This is a straight path to US bankruptcy. Yet if Trump gets in again, there would likely be riots.
Many news outlets are speculating that 2020 will be the most volatile year in history, and there are good reasons for this, with an ongoing US-China trade war, global technology competition, AI and VR innovation, and potential supply shocks.
On the other hand, some analysts are indicating that Bitcoin will drop to zero. Most notable among these is Nouriel Roubini, an economist. But this is largely due to the fact that Bitcoin has the capacity to take power away from elites, and such economists detest disruptive technologies that are contrary to their ideas.
A more realistic criticism would be that Bitcoin will fade away as national cryptocurrencies take over. The Chinese cryptocurrency is going to take over the Yuan, and there are over one billion Chinese people. The fact that China is expanding all over the globe has not gone unnoticed, as they’ve purchased property in a variety of locations – especially Vancouver, Bangkok, Kathmandu, London, and the Middle East.
Facebook’s Libra could also pose problems for Bitcoin. The potential to rollout a currency to every single person with a Facebook account – as per Statistica, there are over 2.4 Billion active monthly users – could be devastating.
The marketing potential is massive, with a social media account doubling as a bank account. Payments could be made to other people on the social network through the social network. We would then see a global Libra coin instead of hyperbitcoinization, and Bitcoin could be sidelined.