Ever since the introduction of Bitcoin by Satoshi Nakamoto in 2009, we have seen a meteoric rise in the value of Bitcoin. Top companies and countries have proposed bitcoin as a legal tender or a means of payment. Bitcoin got to its all-time high in 2021, and we can be sure that bitcoin is going to the moon. In this article, we will be focusing on institutions and countries that have accepted bitcoin as a legal tender and the journey of the world to Hyperbitcoinization.
What do we mean by Hyperbitcoinization?
We are on the brink of a significant change in how we think about money. With Bitcoin, there's no need to rely upon banks or governments because your funds are always safe with this digital currency system that Satoshi created that is entirely decentralized-- DeFi is beyond powerful!
The next step for Bitcoin will be hyperbitcoinization, where users can fuel demonetization and replace our world's ingrained financial institutions, which have failed us so far. They're just not able to serve us in their entirety anymore, considering all these hacks and delays in transactions happening every day.
The Journey to Hyperbitcoinization
The journey of the world to Hyperbitcoinization has been quite an interesting one so far, and there have been three main drivers for this process;
The first driver consists of private-sector efforts that have been brought together by established companies and startups. The second driver consists of government-driven efforts, and the third is anonymous educators.
Microstrategy shocked the world in 2020 and announced they would be converting some of their reserves to Bitcoin. Ever since this announcement had been made, Micheal Saylor had constantly been taking to his page to let the world know that he is buying the dip.
The latest purchase of Microstrategy was on the 1st of February when it purchased 660 additional Bitcoins for $25.0 million, bringing their total bitcoin holdings to 125 051.
“[MicroStrategy] has purchased an additional 660 bitcoins for ~$25.0 million in cash at an average price of ~$37,865 per #bitcoin. As of 1/31/22 we #hodl ~125,051 bitcoins acquired for ~$3.78 billion at an average price of ~$30,200 per bitcoin. $MSTR”--Micheal Saylor
Since Microstrategy made this giant stride, many privately-owned companies followed suit and showed immense interest in Bitcoin. Examples include Jack Dorsey’s Block and Elon Musk’s Tesla. In a recent update on the 15th of February, it was gathered that Warren Buffett, who wouldn’t be caught dead investing in bitcoin, had his company invest $1 billion in Nubank Stock, a bitcoin-friendly bank.
“JUST IN: Warren Buffet has invested $1 billion in Nubank stock, a #Bitcoin friendly bank”--WatcherGuru.
We still have yet to see large companies with a valuation of more than $100 billion invest more than 50% of their reserves in Bitcoin. If we experience this feat, Bitcoin’s market cap will exceed a trillion dollars.
All companies' sales, costs, profits, and values might be accounted for in bitcoin if hyperbitcoinization succeeds. The most valuable companies would be those with the highest amounts of bitcoin on their balance sheet.
Further buttressing the journey to hyperbitcoinization, bitcoin is a better form of currency when compared to fiat because it has significant improvements in terms of portability, divisibility, and fungibility. One aspect that remains under-explored, though? The transaction costs on our economy. With the cost of Bitcoin transactions decreasing, demand is shifting away from traditional payment rails. Visa and Mastercard raised their interchange fees by almost 1%, which has caused even more suffering for merchants in countries like Colombia who stopped using debit or credit cards because they wanted less expensive alternatives with lower rates than what was offered at that time -- just like we see happening now across Europe!
The Lightning Network is a potential solution to merchants' interchange and swipe fees. It can also help them reduce costs by allowing customers who use other payment options such as credit cards or bank transfers access into the network where they would otherwise be unable to do so. If more businesses start using this service, then there could potentially come about an environment which forces traditional banks out due to competition.
Surges in bitcoin transactions have been seen in countries like Nigeria and El Salvador. According to a report, the transaction volume was driven by crypto businesses and e-commerce. Using Bitcoin is a great way to get access to the global marketplace. It can be used both by people living in Nigeria and those on various other continents, opening up opportunities for companies that were never before possible.
El Salvador made Bitcoin a legal tender in 2021. This was a status on par with the US dollar since September 7, 2021. The decision by El Salvador saw the country's GDP grow by 10.3% in the first year since adopting bitcoin. This is an unusual case that skeptics and believers alike are watching closely as it could be an indication of things to come in other countries around the world! We feel all countries will follow suit alike. Russia is planning to regulate crypto, Joe Biden is preparing a bill to regulate crypto, and even India is planning taxation on Crypto transactions. This is indeed just the beginning.
When people hear about Bitcoin for the first time, they are often initiated by other individuals in their personal networks. This leads to a growing word of mouth that eventually discovers this open and decentralized means of exchange with censorship-resistant features.
The Bitcoin Developers Academy is an organization in Africa that aims to train university students in the development of bitcoin and Lightning Network applications. They do this by adapting content values from other members who are already involved with cryptocurrency or its related technologies such as blockchain technology which makes them unique among their peers!
Read Also: NFTs and Real-World Institutions
Unlike many other inventions in modern history, Satoshi created bitcoin with the intention of targeting individuals who have been marginalized and mistreated by society. It's no surprise that this means of exchange has caught on so quickly- it offers a decentralized system which is not controlled by any one person or organization. We believe that Hyperbitcoinization is here and is ready to stay!
I/we have no positions in any asset mentioned, and no plans to initiate any positions for the next 7 days