> rather, it'll be because the U.S. has destroyed the dollar. There's value in cryptocurrency simply in it being an alternative that's readily available, so that civilization doesn't stop if the U.S. does end up miscalculating and hyperinflating the dollar.
Even before Bitcoin, we had plenty of other alternative currencies that could have replaced the dollar. I’ve been reading headlines speculating about the dollar being replaced by other currencies as long as I can remember, before Bitcoin existed.
To your point: If Bitcoin somehow did become an alternative world currency and USD was out of the running, wouldn’t that create great incentive for China to crash Bitcoin prices and drive everyone to use their national currency?
I’m not happy with the current rate of inflation, but I think it’s also clear that true hyperinflationary scenarios aren’t likely in modern countries. As much as we like to criticize governments (often rightfully so), it takes orders of magnitude more incompetence and malice for a government to enter hyperinflation. It’s not something that is stumbled upon by accident.
US monetary dominance is up for grabs. This doesn't mean the US is necessarily supplanted as the world reserve currency, but it does mean lots of trade may dedollarize to some extent. My bet is there will be two major currency zones. Dollar/Euro in the West + Middle East + India, Renmimbi in the East + Australia + Africa.
Given the explosion of debt to GDP in the west vs the east, I see no way the Renmimbi will not continue to appreciate against the dollar, and I fully expect Chinese monetary dominance to increase with the government's continued annexation of Hong Kong.
BTC will probably dominate in countries were currency value is routinely destroyed (developing nations, Russia, the US and Europe to some extent) but as only as a back channel currency: I doubt any major commodity market or trade is ever going to be priced in BTC.
This is just silly, US military dominance is not anywhere close to up for grabs. They US might not have total dominance anywhere on earth anymore due to asymmetric weapons, but in a big fight the US is far and away the biggest dog still. It is not that it is not close, it is not even close to being close.
Edit: You may have misread. I said US /monetary/ dominance not military. Nonetheless, there is a thesis that military dominance dictates monetary dominance, which I do not subscribe to. Below is why.
The idea that the US can use its military to reassert financial dominance in the modern age is silly especially after having exported near all manufacturing capacity to China.
US aircraft carriers are worthless in the pacific. They haven't accomplished anything significant in the South China Sea. Hell, even more aggressive annexations like that of Crimea were never blocked.
Modern warefare is no longer physicial. It's economic and online. If anything the information economy in the US and the West are more at risk from espionage, information manipulation and other attacks given the value of the intellectual assets are far greater and that China has a vice grip on communications. Additionally, our supply chain is incredibly dependent on the East. As local demand picks up and the region can afford to be less dependent on the US, they can afford to cut off supply chains with mild consequences compared to what the US would face.
> BTC will probably dominate in countries were currency value is routinely destroyed (developing nations, Russia, the US and Europe to some extent)
I’m not a fan of the current inflation in the US, but the idea that the US currency is being destroyed has been blown out of proportion online. People like to quote M1 money supply as if it’s the only measure of wealth, while ignoring that investors weren’t keeping investments in cash in the first place. Inflation drives up the value of assets, by definition.
"If Bitcoin somehow did become an alternative world currency and USD was out of the running, wouldn’t that create great incentive for China to crash Bitcoin prices and drive everyone to use their national currency?"
It would, but there's no guarantee that if people left Bitcoin they would end up in RMB. More likely they'd jump to another cryptocurrency, or to Euros. People tend to distrust the last party that fucked them over.
I could see a dangerous situation if China let Bitcoin thrive for a generation, let all the other currencies wither on the vine through normal market mechanisms, and then decided to exercise their national control over Bitcoin. That's basically the Amazon strategy - make your product so appealing that all the other retailers go bankrupt, and then jack up prices once there's no alternative and a whole generation assumes you're the normal way to buy things. (Come to think of it, that's kinda the U.S. dollar strategy now.) But that's a generation off, so naturally I'm not thinking of it, and I doubt very many others outside of HN are either.
Even before Bitcoin, we had plenty of other alternative currencies that could have replaced the dollar. I’ve been reading headlines speculating about the dollar being replaced by other currencies as long as I can remember, before Bitcoin existed.
To your point: If Bitcoin somehow did become an alternative world currency and USD was out of the running, wouldn’t that create great incentive for China to crash Bitcoin prices and drive everyone to use their national currency?
I’m not happy with the current rate of inflation, but I think it’s also clear that true hyperinflationary scenarios aren’t likely in modern countries. As much as we like to criticize governments (often rightfully so), it takes orders of magnitude more incompetence and malice for a government to enter hyperinflation. It’s not something that is stumbled upon by accident.