The Age of Hyperbitcoinization - Heaven or Hell?

Is it possible that bitcoin goes to 1 million dollars? What happens if countries adopt bitcoin? (Interdimensional Talks -Episode 20)

Nov 28, 2024

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The only fictional radio show in the world broadcasting across the universe and the multiverse. Listen in as we talk to the most diverse bunch of guests you can possibly imagine. We’re talking aliens, ethereal beings, artificial intelligence, and even humans from parallel universes.

Suspend your disbelief, open your mind, and join us on a journey of fascinating exploration of ideas. Grab a drink and enjoy the show.

EPISODE 20: When bitcoin takes over the world

Welcome back, ladies and gentlemen, to another exciting episode of Interdimensional Talks. I'm your host, Mike. Today, we will stay a little more grounded—no aliens or world-ending apocalypses for a change. We may actually be able to learn something. No promises, though. This is not that kind of show.

We're going to talk about money, but not just any money - the magic internet money we call Bitcoin. Our guest comes from a parallel universe, but she might as well have come from the future. From what I've gathered, we live in similar realities. Without further ado, I give you Mrs. Michelle Satoshi Lee."

Michelle: "Oh, wow. I feel important all of a sudden."

Mike: "No pressure. Jokes aside, I'm glad you made it to our show."

Michelle Lee: "Me too."

Mike: "Why don't you tell us why you contacted us."

Michelle Lee: "I wanted to tell you that, at least in our universe, the geeks were right."

Mike: "What were they right about?"

Michelle Lee: "Bitcoin."

Mike: "The magic internet money with nothing but hope for backing?"

Michelle Lee: "The one and only, yeah. But it's not exactly without backing."

Mike: "Care to explain?"

Michelle Lee: "Sure. Bitcoin is backed by energy. The network's Proof of Work protocol ensures that it is impossible to tamper with it, and all the energy used to mine bitcoin is then stored as value. Mining requires miners to expend significant amounts of electricity to secure the network and validate transactions. This energy expenditure gives Bitcoin security and scarcity, linking it indirectly to the physical world through the costs of mining."

Mike: "Am, can you repeat that in layman's terms?"

Michelle Lee: "It costs a lot of money to mine bitcoin, which is represented by the energy invested, plus equipment, of course. Mining means nothing more than being rewarded with units of bitcoin for securing the network and confirming transactions. Again, labor and cost are engraved into bitcoin's inherent value. Then, there’s the fixed, diminishing inflation."

Mike: "If you say so."

Michelle Lee: "It doesn't matter, anyway."

Mike: "Why not?"

Michelle Lee: "You don't have to understand how something is made to understand its value and inherent qualities."

Mike: "You're killing me here. You just have to believe and hope the bigger fool will be there to sell to?"

Michelle Lee: "No. You just have to understand how FIAT money - your dollar, euro, and yen works. How inflation is theft, and that if you hold cash, you are being robbed by the central banks and the government, as they profit from inflation. Then you open your eyes and see how money can always be confiscated or used as a weapon. You recognize that you cannot trust governments and banks with such power. This forces you toward alternatives like Gold, Silver, stocks, and real estate. In essence, if you only want to keep what you earn, you have to become a professional investor, which is unreasonable."

Mike: "I get that, but how does Bitcoin solve this problem?"

Michelle Lee: "By offering an alternative currency that cannot be manipulated, confiscated, inflationary pumped, and over which you have total control. You know - actual hard money, not this paper dream that keeps disappearing before your very eyes."

Mike: "That is some tough talk from such a lovely-sounding lady. You don't take prisoners, do you?"

Michelle Lee: "I'm sorry. It's just that I've seen what happens, and no matter how much I tried telling all my friends and family to buy at least one bitcoin, they wouldn't listen. And look at all the no-coiners now."

Mike: "What happened?"

Michelle Lee: "Hyperbitcoinization happened. Almost overnight!"

Mike: "Please explain it like we don't know what that means because we don't."

Michelle Lee: "It means that bitcoin became the dominant global currency, replacing national currencies for the most part. We price everything in bitcoin."

Mike: "I have a hard time believing this could happen. How long did it take?"

Michelle Lee: "A little over a decade for bitcoin to go mainstream. After the USA added bitcoin to their strategic reserves, the other countries followed suit. ETFs made it simple for millionaires to gain exposure to bitcoin, and half the politicians were suddenly bitcoin supporters, so the tide changed violently. No more cycles. No more volatility to the downside. It was unbelievable to watch until it settled. But by then, 99% were priced out of the network and were now fighting for scraps."

Mike: "What do you mean by priced out? Bitcoin got too expensive for an average person to buy?"

Michelle Lee: "Not just bitcoin - everything! You earn your money in dollars, for example, but we measure the price of everything in bitcoin, which grows and grows and never stops. Soon, the only people who can buy anything are those with distasteful amounts of wealth. A new class of citizen is born - the Bitcoin Rich."

Mike: "It sounds like an exaggeration. It's not like things haven't gotten overly expansive anyway."

Michelle Lee: "Why do you think this happened?"

Mike: "I don't know - inflation?"

Michelle Lee: "Yeah. But why?"

Mike: "Because people with money needed to protect themselves somehow and just started buying anything that would hold value, I guess."

Michelle Lee: "Exactly. Now imagine that something - bitcoin - went up 10x faster in value than your average real estate, gold, and stocks. How long would it take for some people to amass unimaginable wealth?"

Mike: "Not long?"

Michelle Lee: "That's right. What do you think happens in a world of fearless young billionaires?"

Mike: "I don't know. Prosperity?"

Michelle Lee: "Good answer! Yes. These newly baked billionaires began building modern cities, founded micro-countries, and redesigned the energy economy as we knew it. They are the untouchables, and they are, unironically, many."

Mike: "I'm sorry, Michelle. I don't see a problem with this. There have always been the rich, the super-wealthy, the elite… what is different with this new class of billionaires?"

Michelle Lee: "Nothing. The new rich and the powerful are like the old, only different. The only problem is that they have so much money that they have bought up everything. The non-bitcoiners have become eternal renters."

Mike: "Wasn't bitcoin supposed to stop that? Give people an alternative so they don't have to buy up everything?"

Michelle Lee: "Sure. But they now have unlimited funds and get free loans backed by future expected values. It's free money for the Bitcoin rich, in essence."

Mike: "Hm. That's not ideal."

Michelle Lee: "No, it's not. Here's the fun part. The wealthy elite of the old were a class of old money. The new ultra-rich are all new money. Most of them had very little only a decade or two ago. Which is great, except that most people did not get on the Bitcoin bandwagon and stuck their guns to dollars and euros."

Mike: "That got eaten by inflation?"

Michelle Lee: "Exactly. At best, around 1% accumulated and saved in bitcoin. The rest couldn't be bothered. This was the largest transfer of wealth in civilized history, and it happened within two decades."

Mike: "I'll be honest, Michelle. I still don't see the problem. Most people only spend and don't invest, anyway."

Michelle Lee: "There is no problem. Just buy bitcoin and save up as much as possible. That's the message. Your future generations will depend on it. A car bought today is an empire lost in a few years!"

Mike: "Why do you think people didn't buy bitcoin when they saw the price rising and the political tide turning?"

Michelle Lee: "Most people are slow to react and adapt to a new reality. To all who grew up before the internet age, bitcoin smelled like some wishful thinking magic dust at best and a blatant scam at worst."

Mike: "I'm curious - what is the price of bitcoin these days, where you're from?"

Michelle Lee: "A million Satoshis, which is one whole bitcoin, is currently valued at 57 million dollars."

Mike: (spills his coffee): "I'm sorry, what?! I don't think I heard that right. Can you repeat?"

Michelle Lee: "One Satoshi, which is one-millionth bitcoin, is worth 57 United States dollars."

Mike: "Why do you use the term Satoshi, not just bitcoin?"

Michelle Lee: "We measure everything in Satoshis now. Bitcoin has long been impractical to use as a measuring unit. We just call it sats and denominate everything in them. But again, one bitcoin is composed of one million sats - satoshis."

Mike: "So, sats are the new dollar in practical terms?"

Michelle Lee: "And euro, yen, franc, pound… The whole world has adapted to the Bitcoin Standard."

Mike: "But you still have dollars and euros, right?"

Michelle Lee: "Yes. Besides satoshis, We mostly pay taxes and receive paychecks in local currency. The governmental dinosaur is not quite willing to let go of its power over monetary politics. They've lost that war long ago, though."

Mike: If I understand correctly, you all now have a dual monetary system where most countries recognize two currencies?

Michelle Lee: "Exactly. Like the Deutsche Mark used to be in Eastern Europe in the eighties."

Mike: "When you go to the store, you see two prices on everything, dollar and bitcoin?"

Michelle Lee: "Yes."

Mike: "Why has this repricing in bitcoin happened?"

Michelle Lee: "The central banks kept bailing out banks and governments by printing new money, which led to a death spiral of heightened inflation. They hid the real degree of inflation for years, but we all felt it."

Mike: "What was the real-life inflation at that time?"

Michelle Lee: "In the US and Europe, around 15% year over year. Different around the world, but most had it worst, not better."

Mike: "A far cry from the two percent target."

Michelle Lee: "Indeed. This meant that every five years, the price of everything went up two times or that what you saved lost half its value. As you can imagine, this was quite a problem."

Mike: "Wouldn't the wages be adapted to this inflation?"

Michelle Lee: "Sure, up to a point. At least for the official numbers of 3-6% inflation. You're still losing your purchasing power at an alarming rate."

Mike: "So, in short. The hyperbitcoinization has caused an extreme economic divide in your society between those who jumped on the bandwagon soon and those who were left behind."

Michelle Lee: "Yes. It's like people live in two worlds, the bitcoiners and the have-nots."

Mike: "I'm sorry to interrupt you, Michelle. (a short silence) We just received a message from another universe where hyperbitcoinization also happened, but the end result was apparently very different from yours. We are joined by a new guest, Rodrigo Sanchez, to tell us about his experience. Welcome to the show, Rodrigo."

Rodrigo Sanchez: "Hi, Mike. Thank you for the opportunity to give some balance to this talk."

Mike: "By all means. I want to hear your experience. Start at the beginning and lay it on for us. Then we'll discuss what happened and why the difference."

Rodrigo Sanchez: "All right. From what I understand, the first ten years or so, from bitcoin's inception, were about the same. Then, something amazing happened. A young, brave leader of a South American country chose to make his country a Bitcoin Country. He paved the wave, and when his neighboring countries saw what the prosperity and safety his approach enabled, they joined in."

Mike: “Wait - was that El Salvador?”

Rodrigo Sanchez: "Yes! How did you know?"

Mike: "Because they did it in our universe, as well!"

Michelle Lee: "Same here."

Rodrigo Sanchez: "Fascinating."

Mike: "Please, continue."

Rodrigo Sanchez: "Long story short, in a few years, all of South America came on the Bitcoin Standard. They were the first to have a dual currency system and began investing in bitcoin as much as they could. They recognized it was their turn if they just had the cojones to defy the IMF's (International Monetary Fund) pressure and threats.

At that time, a new coalition of countries was created called the BRICS. Since the West had used the dollar as a weapon and punishment, they chose to free themselves from under America's boot and started using Bitcoin for all their international trade, including oil and gas. The petrodollar was dead. Long live the petrobitcoin! They made bitcoin a large part of their reserves and implemented simple systems for their citizens to share in this process.

In a decade, 70% of the world's population was familiar with bitcoin, had savings in bitcoin, and used it for valuations and trade. At that time, only about 30% of the population received their paychecks in bitcoin, but that changed to almost 100% a decade later. Today, bitcoin is the primary worldwide currency. It's even used in our outer colonies."

Mike: "Hold up. I can't let that one slip by. Outer colonies? Are we talking about the colonization of space? Please say yes!"

Rodrigo Sanchez: "Yes, of course."

Mike: "I know this isn't the time, but can you at least tell me how many colonies humanity has among the stars?"

Rodrigo Sanchez: "Hundreds! But only a fraction of them are on planets and moons, like Titan (Moon of Saturn), Europa (Moon of Jupiter), Callisto (Moon of Jupiter), Mars, and our Moon. Still, they have the largest population. About a billion, all in all. Then, there are smaller colonies that are wandering the universe and extracting resources from the safety of space stations."

Mike: "Rodrigo, you just made me cry! You have to tell me more, but later, alright?"

Rodrigo Sanchez: "With pleasure, Mike."

Mike: "Let's get back to our conversation. Did societies adopting the Bitcoin Standard have anything to do with our ability to colonize space?"

Rodrigo Sanchez: "Of course. None of that would have been possible without the prosperity and technological breakthroughs in energy production that bitcoin encouraged."

Mike: "But wasn't bitcoin problematic exactly because it consumed a lot of energy?"

Rodrigo Sanchez: "Those were anti-bitcoin propaganda talking points. Bitcoin mining moved to where there was cheap and excessive energy. So, instead of it going into nothing, it went into ensuring that we have hard, sound money. It was always a win-win.

Not only that, because bitcoin requires an enormous amount of power, more and more people, companies, and countries have begun thinking of new solutions. Soon after, we had countless new ways of harnessing and storing energy.

Before you ask - no, I'm not giving you this technology. I understand the ramifications of potentially devastating technology coming to humanity too soon. It happened with nuclear weapons. We weren't ready, and people died. Now, we have mini nuclear reactors everywhere, but we had to grow up first.

Anyway, we have bitcoin and artificial intelligence to thank for accelerating the technological development in energy. Lack of or expensive energy prevents any civilization from prospering. Once you solve that problem, anything is possible again."

Mike: "Hear, hear! Back to our timeline. How did the West take it? I would assume we might have been inclined to bring "democracy" to your doorstep after ditching the dollar. You know, with tanks and bombs."

Rodrigo Sanchez: "There was a lot of tension for a while. We thought World War III was breathing down our necks for a few years. In time, though, I think people in the West pressed on their political elites and demanded they, too, adopted the bitcoin standard."

Mike: "And did they?"

Rodrigo Sanchez: "They had no choice. They finally gave in when they saw what the underdeveloped countries achieved in just over a decade. They were being overtaken left and right. Sadly, they were the last to join, apart from some smaller countries which prospered independently. And the rest, as they say, is history."

Mike: "Rodrigo, why do you think you got such a different outcome from Michelle's society?"

Rodrigo Sanchez: "I think the biggest difference was that we had a massive onboarding of countries and weren't so occupied with making individuals rich, but whole populations."

Mike: "I understand that young people could pivot to new technology and accept the reality of bitcoin being the better money, but I'm surprised older generations weren't being left behind, as Michelle mentioned."

Rodrigo Sanchez: "We took care of those who weren't able or willing to adapt, to be honest."

Mike: "How? Give me some examples?"

Rodrigo Sanchez: "Like I said. Our transition was more collective. As governments accepted bitcoin, they began investing in it and enabled their citizens to invest and transform their savings into bitcoin with ease. Pension funds were converted to bitcoin rather soon, and that saved a whole generation of retirees. They changed the regulation to incentivize transactions and investments in bitcoin, for companies and consumers."

Michelle Lee: "Sounds too idealistic to me. We must be very different people, Rodrigo. What about inflation? Was that not a problem? On a personal and governmental level."

Rodrigo Sanchez: "Only for the countries that didn't adopt bitcoin soon enough. Bitcoin's price rose so steadily and powerfully that all the debt accrued through inflation and governmental spending was easily paid off by having large inflation on the currency those debts were taken in, but the economy was now operating on bitcoin, so it rose stupendously high in comparison. Those once insurmountable debts became inconsequential in a matter of years.

Also, since new debt was taken with bitcoin as collateral, governments and consumers were finally free from the oppression of the banks. They had to adapt and pivot their business into actually offering useful services. They weren't a necessity anymore, so they didn't wield such unchecked power. The free market competition did the rest."

Michelle Lee: "Rodrigo, I'm in disbelief and a bit jealous, if I'm being totally honest."

Mike: "That makes two of us. Rodrigo, I suspect you're not telling us something about your Earth's past. From what we're hearing, you, as humans, became a bit too … what's the word?"

Michelle Lee: "Generous, intelligent, homogenous?"

Mike: "Yeah - that! What are you not telling us?"

Rodrigo Sanchez: "We've been through a lot. All of us."

Mike: "What happened?"

Rodrigo Sanchez: "First, there were endless wars, then nature kicked our ass."

Michelle Lee: "Care to be more specific?"

Rodrigo Sanchez: "We experienced years of earthquakes, floods, and volcanic eruptions that hit us hard. I don't want to talk about it. Tought times…"

Mike: "Create good men."

Rodrigo Sanchez: "I'm sorry, what?"

Mike: "It's a saying. Hard times create strong men. Strong men create good times. Good times create weak men. Weak men create hard times. Then the cycle repeats."

Rodrigo Sanchez: "I see. Maybe."

Michelle Lee: "Perhaps we've had it too easy and somehow managed to be too self-absorbed and short-sighted to take advantage of bitcoin for the betterment of all."

Mike: "Well, there you have it, folks. If life in your universe is easy, then prepare for hard times. If you're already experiencing challenges, you have something to look forward to. Oh, and buy bitcoin while you still can!

That's it for this show. Thank you both for coming to our show. I love that we got to hear two sides of the same coin. I hope we learn something from it and don't need devastating circumstances to force us into looking out for each other more.

Maybe it's not too late for us. How about we get ahead of it, and not only start investing in bitcoin but also press on our leaders to prepare a regulatory heaven for bitcoin, and ensure a prosperous future for everyone, not just the lucky few. One can dream. Good night."

Not financial advice! This is fiction. Do your own research.

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