Some country like Zambia or Argentina or Bhutan will hit 1000% per week inflation and currency meltdown.
Shopkeepers, in order to buy and sell bread and pay their employees, will have to switch to Bitcoins with QR codes on their smartphones. Because Zambia dollars will be worthless.
And in the space of 3 weeks, an entire nation will switch over to Bitcoin.
And it will never go back.
Bye-bye, Zambia dollar.
This will transform the very definition of a Nation-State, because up until now, all countries control their own currency. They must, in order to be sovereign.
Post-Bitcoin, governments will no longer be able to print money at will.
All they’ll be able to do is police the Internet.
(Maybe that means all the Police Departments will report to Google. Maybe it means they’ll arrest everybody who uses wrong transgender pronouns in their emails and Facebook posts.)
And once Zambia is on Bitcoin… Zimbabwe is next. And Malawi is next. Mozambique is next.
And just like the dominoes of Internet and smart phones fell, so will the dominoes of cryptocurrencies.
And Bitcoin will go from being the most volatile currency to the most stable currency. Because no country or company will have the ability to manipulate it at will.
It will become the new “Golden Straitjacket” (Tom Friedman’s term) of 21st Century economics.
Let me tell you a story, which was told to me by the late Tom Hoobyar. Tom was a Silicon Valley CEO of a biotech firm. I forget whether Tom was actually at this meeting, or if one of his friends told him this story.
But in the early 1990s the Joint Chiefs of Staff invited a bunch of Silicon Valley Nerds to Washington DC to give them a briefing on the Internet.
“Please explain to us what this technology is and what it means,” they said.
The first meeting was dinner. The nerds and geeks were intimidated. They straightened their ties and ate their potatoes and steaks and had polite conversation, but the next morning the geeks were still very nervous.
“Are we going to tell them?” was the question.
“Are we really going to tell them the implications of this?”
Finally they decided they had no choice. They appointed the boldest member of the group to drop the bomb.
After breakfast, a guy stood up in front of all the 5-Star Generals and said, “OK, I’m just going to say it:
“If you can’t control guns, drugs and illegal aliens, there’s no f***ing way you’re going to control ones and zeroes.”
The head of the Joint Chefs of Staff said:
“Yeah, that’s kinda what we thought.”
So… how do you transition from government-controlled money to de-centralized virtual money?
I have no idea. Sounds like a rough voyage to me. But the transition is inevitable.
Bitcoin is to money what the internet was to media. As John Paul Mendocha says, the Internet is a serial killer. And you never know who it’s going to take out next.
And know this: What we’re experiencing NOW is a bubble. The true revolution will happen after the devastation.
In the long run – after this season of extreme volatility – Bitcoin will be vastly more valuable than it is now.