How the emergence of BRICS as an alternative to US dollar global dominance will lead to global Bitcoin adoption.
This is an editorial by elementary school teacher and filmmaker Milan Stanojevic.
Since the end of World War II, the United States has been the world’s dominant superpower. The Soviet Union fought for supremacy during the Cold War, but lost control of its satellite states and ultimately failed. This was evident in 1989 when the Berlin Wall fell.
In recent years, American hegemony has been challenged by China, which has amassed enormous wealth since opening its economy to the world. , seems poised to take over the world (read more below). “China Unbound” by Joanna Chiu). Today Russia and China are BRICSinclude Brazil, India and South Africa, with others such as Turkey and Saudi Arabia likely waiting to join.
For those who haven’t paid attention, the world is undergoing a major paradigm shift around the BRICS.Banks around the world are collapsing, Saudi Arabia and Iran historic peace negotiations and the country Starting to deviate from the US dollar as the global reserve currency.
A key question to consider, then, is how the current state of geopolitics and macroeconomics will shape the future of a hyperbitcoinized world? No one can predict the future with certainty. I know that, but I would like to share my vision of how game theory will unfold over time.
Over the next few decades, I believe the global economy will evolve in three stages, with the rise of the BRICS as an alternative to US hegemony. In Phase 2, Bitcoin will become a medium of exchange and a unit of account for many countries. In the third and final phase, we will experience the actual hyperbitcoinization.
Phase 1: USD to Gold
Most people don’t even know this is happening, but we are already in the early stages of Phase 1, entering the creation of a multipolar world.
Saudi Arabia under President Nixon in the 1970s Agreed to set oil prices in US dollars in exchange for military defenseEssentially, all other countries were forced to hold onto the US dollar as a result, thereby making the US dollar the world’s reserve currency. It means that every time you decide to print money, you can virtually buy oil for free. As a result of becoming the world’s reserve currency, US Treasuries have become the safest asset for investors (a statement that seems ridiculous today). There is a consensus that the US has zero chance of defaulting because it can print infinitely.purchased by the state Massive U.S. Debt Over 50 Years.
However, this is no longer the case for all countries. China and Russia We’ve been buying less Treasuries over the past decade. Rather than holding US Treasuries as an asset, they increase gold reserves. IndiaEven amassing gold reserves. The BRICS countries appear to be working towards a return to the gold standard. Under this regime, currencies will again be pegged to scarce commodities that many have used as stores of value for thousands of years. However, it is unlikely that these states will use physical gold to settle the majority of their transactions. But what is certain is that Russia now allows countries to buy their own oil. Ruble, Yuan and soon RupeeAt this stage, a few countries will continue to reduce US Treasury holdings, trade in foreign currency, and get as much gold as humans can.
The rest of the world, especially the West, will continue to function as it has since the 1970s. Many countries are forced to hold onto US dollars to buy oil. American bonds, stocks, and real estate will continue to serve as stores of value for most citizens. And fiat currencies, especially the US dollar, will become the primary unit of account. I predict that this first phase will not last him more than 20 years.
At this stage, many countries may default on their debts and their currencies may crash. They will start trading locally in US dollars, as some countries still do today. Higher debt-to-GDP ratios and higher inflation, combined with higher taxes and unemployment, lead to massive unrest. Governments desperately need solutions to insoluble problems.
Phase 2: Beginning of a new era
Phase 2 is the beginning of a new era. This is when you have no choice but to switch to a radically different currency system. At this point, non-BRICS countries will rapidly adopt Bitcoin as both a medium of exchange and a unit of account. This means that everyone gets paid in Bitcoin and uses it as a store of value. Property will continue to be owned, but people will buy it as a place to call home, not as a place to store assets. Stocks will continue to be bought and sold, but Bitcoin is seen as the primary savings vehicle for everyone. A king or an individual (probably someone like you) who piles up bitcoin for years becomes very wealthy in a very short period of time.
At this stage, globalization will not be as influential as it is today, as the BRICS countries will be alienated from the rest of the world. China and Russia end up trading almost exclusively with their allies, ultimately undermining their economies. These states compete for gold production, and the primary unit of exchange changes from time to time. Phase 2 will occur sooner than Phase 1, perhaps within a decade.
Phrase 3: Hyperbitcoinization
The third and final phase is less complicated. Most of the world has already moved to the Bitcoin standard. Countries that have not yet done so will find wealth and living standards rising abroad. At this point, El Salvador will become one of the richest countries on the planet. Countries still on the gold standard will suffer as a result of their isolation from the rest of the world. Confidence in the current system is lost.
Furthermore, people will find gold to be an inferior store of value compared to Bitcoin.It is difficult to verify the authenticity of gold. Transporting and securing it is even more taxing. Russia, China and their allies have no choice but to adopt Bitcoin as their local medium of exchange and unit of account. Phase 3 will also progress rapidly. I predict this will happen in 5-10 years.
This is how I imagine game theory will play out over the next 20-30 years. Most, if not all, of my predictions are probably wrong. But what I am sure of is that our world is indeed changing rapidly. Our currency system is broken. This is reflected in the current banking crisis.
Even if most of my predictions were wrong, we desperately need a return to a healthy monetary system.In my humble opinion, Bitcoin is the only viable solution. It may be wise to stack a few sats while you still can. You or your children may benefit greatly from it in the future.
This is a guest post by Milan Stanojivic. Opinions expressed are entirely his own and do not necessarily reflect those of his BTC Inc or Bitcoin Magazine.