The term hyperbitcoinization gained attention recently after Bitcoin values spiked in the aftermath of the collapse of three US banks.
The transition from inferior currencies to superior, more valuable ones in the backdrop of varied socio-economic circumstances is what makes for the ‘Hyperbitcoinization Theory’. The term recently gained traction on social media after the collapse of three US banks led to a significant hike in the price of Bitcoin. Investors scared about the chances of losing their finances stored in such centralised banking systems seemingly migrated to the crypto sector in herds over the last week, pushing BTC to its nine-month price rise to around $28,000 (roughly Rs. 23 lakh).
Daniel Krawisz coined the term ‘hyperbitcoinization’ in 2014. A veteran Bitcoin supporter, Krawisz founded the Satoshi Nakamoto Institute dedicated to the anonymous founder of Bitcoin in 2013 — four years after Nakamoto created BTC as the world’s first cryptocurrency.
According to Krawisz, a time in the future is expected where fiat currencies would begin to look unsustainable due to their printing and maintenance costs as well as the fact that they are not backed by any physical commodity. When and if this happens, the global citizenry is expected to move to more sustainable, digital money like the cryptocurrencies.
Driven by hyper value appreciation and global adoption, Bitcoin is foreseen as the hardest form of money in Krawisz’s utopia, a Nasscom blog said, citing a WazirX report.
Recent unwinding in the fintech sector seems to have breathed some life into discussions around the possibility of Krawisz’s vision coming true in the time to come.
Within seven days this month, three banks in the US — Silicon Valley Bank (SVB), Silvergate, and Signature — crumbled under the inflation-hit market pressure.
The US government has allowed the users of these banks to take back the custody of their deposits to prevent any exit of its banked citizens due to lack of trust on the system.
In the aftermath, Bitcoin emerged as a safe haven for investors, especially for those who wished to stack away hefty investments.
Within days, the value of BTC soared as high as $28,136 on March 22, registering a 28 percent weekly surge.
With the banks failing, the change in the market behaviour is what stirred conversations around the hyperbitcoinization theory.
In the support of the theory, Balaji Srinivasan, the former CTO of Coinbase, made a rather wild prediction that Bitcoin price will soar to a whopping $1 million (roughly Rs. 8.25 crore) in the next 90 days — till June 2023.
While industry experts dismissed Srinivasan’s prophecy, given its immediate timeline, some do believe that the era of hyperbitcoinization could be approaching sooner than we’re expecting.
The present, real world will need to grow much more technologically and ecosystem-wise to support the possibility of hyperbitcoinization to its full potential.
More matured power production and distribution systems will need to be installed around the world, if the economy comes even close to adopting Bitcoin or any other cryptocurrency as its hardest form of money.
Source:gadget360.com