Swarm Economy: Bitcoin represents a significant threat to the currency domination of the USA, which is the only thing propping up the nation’s status as a worldwide superpower. Following the USA’s defaulting on all its international loans on August 15, 1971, the US trade balance has been maintained using a combination of military threats and telling people to buy US dollars just to fund the ongoing consumption of the USA. Where other world currencies have failed to challenge the USD, and therefore this mechanism of maintaining US economic dominance, bitcoin may succeed.
What would happen if the US were one day unable to continue its overspending? We would see a mighty crash of the global economy, but more importantly, the US would come down in a Soviet-style collapse, only much worse due to structural differences. (To understand these differences, consider the fact that public transport kept running through the Soviet collapse, and that most families were well-prepared for food shortages. In the US, you would instead have people stranded in suburbs with no fuel, food, or medicine – only lots of weapons and ammo. See Orlov’s collapse gap for more on this structural difference.)
Enter bitcoin, which can break the cycle of borrowing and overspending.
As we observed, the key reason that people are forced to buy US Dollars today is that it’s the international mechanism of exchange of value. If you want a gadgetoid from China or India, you need to first buy US dollars, and then exchange the US Dollars for the gadgetoid. But as we have seen, bitcoin far outshines the US Dollar in every aspect as a value token for international trade. Using bitcoin is cheaper, easier, and much much faster than today’s international systems for transfer of value.
Pretty much everybody I’ve spoken to who is involved in international trade would switch to a bitcoin-like system in a heartbeat if they were able to, venting years of built-up frustration with the legacy banking system (which uses the USD). If that happens, the US won’t be able to find buyers for its newly-printed money that keeps its economy propped up (and its military funded).
If the cycle of dollar lock-in breaks, the United States of America comes crashing down. Hard. It would seem inevitable at this point, and bitcoin may be the one mechanism that breaks the cycle.