Following on from my April article titled “Democracy Fails Without Cryptocurrency,” I believe that we will see a complete collapse of traditional fiat currencies within the next ten years. These government-issued and controlled monies will be replaced by decentralized and permissionless currencies. This may sound far-fetched, but several factors will drive this huge shift. Let’s break it down:

Inflation and the Information Age Collide

The supply of fiat currency is controlled by a cabal of central bankers whose interests are not aligned with the general population. Reckless monetary policies are devaluing traditional money, making everyday items more expensive. This exacerbates the wealth gap, enriching asset holders at the expense of wage earners. At the same time, the Information Age is giving people real-time access to economic data. This combination is causing widespread economic frustration and rebellion.

Changing Investment Habits

More and more people, especially younger generations, are abandoning outdated financial systems like pension plans and retirement savings. These schemes do not keep up with the rate of inflation. Worse, many fear that demographic pressures will bankrupt these systems entirely before they can benefit from them.

Technological Advancements

Physical cash is being phased out, replaced with digital fiat systems that offer no privacy. Authorities can turn off your access to this money at the flick of a switch. Meanwhile blockchain technology has enabled a vastly superior alternative, at least from the perspective of individuals.

Digital scarcity is now possible, and it does not rely on centralized authorities. Cryptocurrencies like Bitcoin are permissionless, meaning they are available to anyone. Some cryptocurrencies create levels of privacy that terrify governments.

As these technologies continue to rapidly evolve, they challenge the need for businesses and consumers to use traditional government-controlled money. One country, El Salvador, has already adopted Bitcoin as legal tender. At least seven different nations are now mining Bitcoin with support from the central government. Pension funds are known to be investing in Bitcoin. A U.S. presidential candidate has proposed a strategic Bitcoin reserve. Adoption will continue steadily until a tipping point is reached. Then it will go parabolic.

Loss of Trust in Central Banks

In countries suffering from hyperinflation or debt crises, people are losing faith in government-controlled money. Government policies like printing money are causing economic instability, pushing people towards alternatives like cryptocurrencies. As trust in traditional money fades, the move to crypto will only speed up, especially as it offers financial inclusion for the unbanked and underbanked populations.

Growing Outrage at Failed Government Policies

As the richest Western democracies embrace unfettered immigration for political gain, the resulting economic and social chaos will drive the native population to action. Some, especially those with significant wealth, will emigrate to nations that uphold their values. Self-sovereign money like Bitcoin will facilitate this move and be embraced in the recipient countries as fiat monetary regimes collapse. Others will stand firm, founding new nations while corrupt regimes collapse around them. The currency of these new nations will not be currency by fiat.

In Closing

All these factors are pointing towards the extinction of fiat currencies. A complete transition to cryptocurrencies will trigger a global economic revolution, creating a more decentralized and democratized financial system. As the role of fiat currencies weakens and digital currencies take over, we will see a world where the financial landscape looks vastly different – and in the long term, it will be a much better world.

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