Hyperbitcoinization is a strategy for developing the Bitcoin network, in which digital coins should displace fiat money from use in the future.

The cryptocurrency financial system was initially introduced as an alternative to the fiat one. It was assumed that, over time, cryptocurrencies would completely displace fiat from public use. This is what is called Hyperbitcoinization. The process has partially started, but cryptocurrencies have some disadvantages, resulting in the willingness of world society to abandon the usual format of mutual settlements completely, which is still relatively low. Nevertheless, the market continues to develop in this direction.

Conditions for full hyperbitcoinization

This term does not only imply the end of the use of fiat and the establishment of Bitcoin as the only currency. Parallel processes are also observed in other cryptocurrencies, which, for one reason or another, cannot withstand competition and disappear from the market.

In theory, the main conditions that must be met to achieve the goal of Hyperbitcoinization:

• hyperinflation and demonetization - in this case, it is assumed that the government of a country will create a new currency as an imitation of the old one; however, the price conditions for the sale of various goods and services will be such that it will be more convenient and profitable to pay for them through the new monetary system;
• inflation - at the state level, control over the issue of the national currency of a particular state ceases, and as a result - it falls in price; people will not have the desire to buy the old currency since it will be unpromising;
• control of capital turnover - perhaps against the backdrop of political disagreements in different countries, which will ultimately lead to an increase in the value of cryptocurrency as a more stable means of payment.

It is predicted that even if cryptocurrencies are banned at the state level, this ban is unlikely to impact the population seriously. This practice has already been used, but people still continue to make illegal purchases with digital money.

Prospects

First of all, those countries with an unstable economic and political background are susceptible to financial market development, such as Hyperbitcoinization. In this case, not only for daily use but also for investing, increasing capital in passive ways, digital coins will be more attractive due to their stability, no matter how strange it may sound, given that the rate correlation is carried out exclusively commercially.

However, according to experts, complete Hyperbitcoinization is unlikely to become widespread in the coming years. The following conditions can accelerate the population’s transition to cryptocurrency and the abandonment of fiat:

• the inability of the government to control the volume of digital coins entering the economic sector of a particular country;
• unstable economic situation expressed very clearly.

The same experts argue that Hyperbitcoinization will be the only option to save the national economy, sharply increase productivity, and enrich countries.