Executive summary: Debunking The Bitcoin Nation-State Theory
Bitcoiners love the idea that governments will buy BTC with fiat currency. But under what circumstances could that happen and which governments are likely to do so? I explore the ideas behind the Bitcoin nation-state theory and point out flaws in its reasoning.
What you will learn:
- What the Bitcoin nation-state theory is and how it is flawed.
- Bitcoin nation-state theory is the idea that nations will FOMO into BTC.
- They might do so because BTC is harder money than fiat and because they want to get off the dollar.
- The current system is debt-based. In crypto terms, the central banks can mint unlimited fiat tokens to finance their debt.
- Bitcoin is a decentralized alternative without a central bank. Nation-states might become interested in using it.
- All countries except for the financial hegemons have a degree of interest in using alternative currencies and payment ledgers.
- As a digital collateral, Bitcoin is an interesting alternative, particularly for weaker currencies excluded from the current system.
- The nation-state theory is based on several unrealistic assumptions, which often revolve around a faulty profit motive of governments. Therefore, it is unlikely to play out in its entirety.