Economist warns of dystopia if ‘Bitcoin Aristocrats’ become reality


Not everyone is excited about hyperbitcoinization.

According to a popular copy / paste meme, Bitcoin holders become a neo-aristocracy as Bitcoin becomes the dominant world currency:

Only $ BTC holders are allowed into the upper classes of society. Nocoiner are socially and financially shunned. At best, forced to become servants of the new upper class. In the worst case, executed for crimes against the #bitcoin empire.

– The Crypto Dog (@TheCryptoDog) January 2, 2021

The meme is part of a larger vision for the future of Bitcoin, a semi-serious but mostly ironic narrative that can be summarized under the umbrella of the “Bitcoin Citadels”: a vision of the future in which Bitcoin will become so valuable that Hodler lords will literally defend their coins in castles.

Coming from a Reddit post written by someone who claims to be a time traveler (asking for a $ 1 million price tag in 2021 if you’re curious), the Citadel meme has taken on a life of its own and even inspired a short film.

But despite the self-evident farce and fantasy behind the meme, an economist is now warning that it might not be far from reality should Bitcoin successfully accomplish its mission to achieve monetary supremacy.

On the website of the Think Tanks Center for Economic Policy and Research, scientist Jon Danielsson of the London School of Economics wrote an article yesterday in which he envisions a future in which “Bitcoin aristocrats” “social divide” due to extreme inequality of wealth and promote populism “will:

“First of all, the current owners of Bitcoin will become the richest people in the world, competing with the kings and emperors who ruled empires over the past centuries. You will literally own all of the money. You can buy anything you want. There aren’t that many of them. It is a tiny group of people compared to the amount they own over all pension funds and mutual funds and the rest of the fortune today. “

The government would be forced to “protect or attack” this new class of overlords who “achieved their rank only by buying them early. You will not contribute to society. ”

Aside from gloom and grumble, Danielsson finally comes to the conclusion that such a future cannot happen because Bitcoin is unsuitable as a unit of account due to its price instability. Because of these “internal contradictions”, writes Danielsson, “the price of Bitcoin will drop to zero.”

Aside from economic analyzes that come to the same conclusion as time-traveling Redditors, not everyone is so grim about a hyperbitcoinized world. In fact, in many cases, it has proven to be a boon to countries struggling with inflation.