Introduction
Bitcoin appeared on my radar I believe sometime in 2013, after it reached above $1,000 per bitcoin. When I first heard about it I thought it was an interesting niche project, but to use it required deeper technical skills than I had. It was also mostly used for things like buying drugs on the silk road which I was not interested in doing. Several years later in 2016 I looked into it again and decided to buy a small amount on Coinbase. My thought process at the time was “I’ll buy a small amount and hold onto it. Maybe it will go to zero, but maybe it will be worth a lot some day.” Seeing the extraordinary parabolic takeoff in late 2017 led me further down the rabbit hole — reading the white paper, listening to podcasts, even attempting to run my own node. That bull run also cemented the idea in my mind that this thing is possible. It’s not just an academic exercise or a small niche project — it can truly change the world.
After bitcoin hit $100,000 in price in Jan 2025, a once seemingly impossible target, I thought its utility and value would be obvious. Apparently not. “What will it take for you to recognize that bitcoin is real money, not a scam?” is a question I have asked my wife repeatedly. She assures me she will concede its usefulness when bitcoin is used for everyday transactions like buying gas or groceries. I think this is a good gauge of what it will take for the average person to accept bitcoin as money. Even hitting the symbolic $1M price target will not, I imagine, change the average Joe’s mind. The higher the price goes, the more people think that bitcoin is “out of reach” or priced “too high”. Libertarians and monetary enthusiasts may be the early adopters, but only a practical demonstration of its use in everyday life will convert most people to become bitcoiners. However, converting from a store-of-value asset to a medium-of-exchange currency will be bitcoin’s last step on its journey to adoption.
The Road to Adoption
All currencies have three primary functions that give them utility:
- A store of value
- A unit of account
- A medium of exchange
A store of value means that individuals use the currency to store their wealth. It retains its value over a long enough time so that savings are preserved. This is the first property that bitcoin has already achieved, and currently outcompetes every other currency in existence over a long enough timeline. Looking in the reverse direction, this property is the first casualty of inflation or hyper-inflationary regimes. Rapid money printing, and thus high inflation, destroys a currency’s ability to store value over time. This is the process we are seeing happen with most fiat currencies, including the US dollar. Consequently, dollar holders will look to store their wealth elsewhere. Bitcoin may not be on the radar for most people yet, but it is dangling on their periphery. Its unchangeable properties provide rock-solid guarantees in a world of completely unknown and unknowable monetary variables. And every year that passes just reinforces the idea that bitcoin is here to stay, compete, and win against other store of value assets.
Being a store of value is not enough to be a useful currency. Real estate, stock market indexes, even jewelry all more or less retain or grow in value over long enough timelines. None of these are used as currency, though, because they lack the other two properties: a unit of account and medium of exchange. A currency acts as a unit of account when it is an economic measuring stick, a metric by which to make economic calculations. Goods and services are priced in the currency. Profit and loss, cash flow, and other financial statements all are denominated in it. This is the second milestone bitcoin is attempting to reach. Some individuals have already adopted bitcoin as their unit of account (a “bitcoin standard”). As the hardest asset in the history of the world, hardcore bitcoiners recognize it will simply outcompete other forms of savings. They therefore optimize all economic decisions towards acquiring more bitcoin. They may earn in dollars, but they save in bitcoin. In the fiat world, the US dollar remains the global unit of account because it is the world reserve currency. People still generally save in dollars, although they know that over the long term their cash will lose value. For bitcoin to join or replace the dollar as a unit of account, these people will need to adopt a bitcoin standard. Accounting systems, contracts, and taxes must support bitcoin-based valuation. This will likely be a gradual process, with accounting being done in both fiat and bitcoin for some time. We will know the process is complete once people stop referring to a rise or fall in bitcoin’s dollar price, and instead refer to the rising and falling dollar price in satoshis. Because individuals and organizations can start to make economic decisions on a bitcoin standard (and some already have), I predict this will be the second phase of bitcoin’s adoption, before the final phase — medium of exchange.
To be a medium of exchange, a currency must be easily transferred, with minimal friction between buyer and seller. This means that sellers must be willing to accept the currency and buyers must be willing to pay with it. Here, having a network effect is key. The more people around you use the same medium of exchange, the more likely you are to adopt it. This is one reason (besides legal tender laws) why national currencies exist and are used locally, but not often outside the country’s borders. Bitcoin’s network is smaller than the dollar, but is growing rapidly. The number of bitcoiners willing to spend their bitcoin is a much smaller subset of total bitcoiners. This is due to Gresham’s Law — people prefer to spend bad money and save good money, so only the bad money circulates. Another obstacle for bitcoin here is network scalability. The blockchain is designed to be a settlement layer, not necessarily for small everyday purchases (despite the original whitepaper title). To effectively handle the scale of a significant portion of global trade, massive infrastructure must be built out to handle most transactions off-chain. This infrastructure needs to make it easy to quickly switch between dollars and bitcoin at low cost, which eliminates the friction between the fiat and bitcoin worlds. Like building a bridge and opening a border between free and repressed countries, people will flood in from the centralized, weakening, and inflationary side to the secure, prosperous, and free side.
To summarize where we are— Bitcoin is currently far ahead as a store of value, working towards becoming a unit of account, but lagging behind as a medium of exchange. To achieve the final two milestones, it will need to flip the psychology that the fiat world has instilled upside down. Instead of thinking in dollars, people will need to think in satoshis. Prices, spending habits, savings — all will need to be refounded on a bitcoin standard. Think about it — right now in the US, nobody thinks about how many pesos or rupees it takes to buy something at the store. Maybe some Mexican or Indian visitors have some, and they need to know how much to convert to dollars. But otherwise, we all think about the cost of groceries, rent, and taxes in dollars. To get to full bitcoin adoption, prices will be thought of in sats, and dollars will be an afterthought or altogether abandoned. So what would it take, and why is it so hard to change this status quo?
Volatility, Resilience, and Fragility
Let’s start with another challenge bitcoin faces. The price of bitcoin in dollars is currently highly volatile. It is not unusual for the price to spike or crash double digit percentages over the course of hours or days. This makes it difficult (though not impossible) to be used as a near-term store of value for everyday transactions. A cup of coffee that costs $5 one day, $10 the next, and $7 the next is intolerable to the average person. It makes short-term planning for expenses cumbersome if not nearly impossible. This is the major reason why bitcoin is not used for everyday transactions. Because prices everywhere (in the US) are denoted in dollars, prices appear stable in the short term, even if the value of the dollar erodes over longer periods.
However, the volatility of bitcoin in the short term has hardened the network participants and strengthened its underlying resilience. It has endured a litany of problems that would likely have been fatal for any centralized organization — exchange bankruptcy, 80% price drops, mining bans, political attacks and FUD, and internal squabbling. The fiat system has pseudo-stability in the short term which undermines its long-term resilience. Fiat is fragile, but bitcoin is anti-fragile. The fiat banking system has faced crisis after crisis requiring central banks to inject liquidity and print money. Beyond the initial network launch period, Bitcoin has never had a crisis requiring manual intervention. Nor is such an intervention even possible. As fiat crises increase in magnitude and the intervals between them shorten, people will begin to understand the quicksand upon which the current system is built. Momentum towards a bitcoin standard will create a flywheel effect, where loss of confidence in the fiat system reinforces the growing confidence in bitcoin. Eventually, it will become common knowledge that bitcoin is far more resilient than the system it is replacing. Growth in the market cap of bitcoin will further stabilize it, adding to the flywheel effect. How long this all will take is much harder to foresee.
How Adoption May Work
Returning to our example of price of a cup of coffee — let’s walk through what such a transition from a dollar standard to a bitcoin standard would look like. First, some context. Assume that there is a critical mass of bitcoiners who have adopted a bitcoin standard — that is, they measure monetary value in sats, not dollars. These people understand that the dollar is a melting ice cube and would rather hold bitcoin, even if they acknowledge and continue to use dollars for practical purposes. Once the average daily price volatility of bitcoin drops to a manageable level and awareness of the inflation problem reaches an inflection point, imagine the coffee store owner adds a “satoshi price” to the menu. This would signal a psychological shift — acknowledgement that bitcoin rivals the dollar in predictability and utility. Many places in the world already list prices in multiple currencies (usually the local currency and the dollar), so this is not an unprecedented practice. Tourism-driven economies, border regions, countries with weak or unstable currencies, and many e-commerce sites already have experience. Adding a bitcoin price does introduce exchange rate risk, but this can be mitigated with real-time currency conversion at the point of sale. Coffee buyers can pay in either bitcoin or dollars, and the business can instantly convert one to the other at the current exchange rate. The advantage of adding a bitcoin price will outweigh the costs and friction for the business if enough customers wish to pay with bitcoin. The process of adopting bitcoin payments may also spur an increase in businesses adopting bitcoin and dumping dollars as their corporate treasury asset.
This scenario — real-time currency conversion at the point of sale — is a game-changer for bitcoin’s adoption. Think about a high dollar inflation scenario where both consumers and businesses already prefer to hold BTC over dollars in their accounts. If fees to convert between currencies is low enough, the transaction mechanism and the settlement currency matter little in this equation. Customers can see the price (in BTC or $) and use a payment app that seamlessly transfers the value from their bitcoin wallet to the business. The BTC could be sent directly (perhaps over lightning network or a 3rd layer app), converted to dollars and sent over fiat rails, or converted to a stablecoin for instant settlement on crypto rails (most likely). With the financial tech rapidly evolving, I see this currency-agnostic way to transact as an inevitability. Legal tender laws still require the local currency to be accepted, but instant conversion to bitcoin mitigates the risk to businesses.
So in the end, it won’t matter what currency is transacted at the point of sale. What will matter is what asset people choose to hold as their store of value, and how easy, convenient, and frictionless it is to pay for goods and services in it (regardless of the payment rails for the transaction). And bitcoin is poised to accomplish this goal with ease.
Once we have bitcoin fully adopted as a store of value, along with frictionless currency conversions, we can begin to see the endgame of this currency competition. Why would anyone want to hold fiat currency when they know they can get all their transactional benefits without the inflationary downsides? The answer is — they won’t. Currency competition leads to the best currency winning out, and that’s bitcoin.
The Endgame — The Bitcoin Standard
At this point, the fiat system is down to its last bullets in the chamber, all of which literally involve more direct coercion and force. First, in a currency crisis, fiat proponents will likely start to blame bitcoin and bitcoiners for causing the crisis in the first place. “Look at how rich those people are becoming, while you’re getting poorer!” Instead of appreciating bitcoin for being the lifeboat, these voices will flip morality on its head — blaming the victims for reaching for the lifeboat, and blaming the early adopters for seeing the storm ahead of time. As if without the lifeboat, nobody would drown. However, this narrative is unlikely to succeed in a world where (a) decentralized social media exists to counter the narrative, (b) everyone has the opportunity to buy bitcoin nearly frictionlessly, and (c) bitcoiners have vocal and wealthy advocates across financial, tech, and political worlds.
Secondly, the fiat system — in the form of politicians, bureaucrats, policy advisors, and more — will try to “crack down” on people escaping the dollar by instituting capital controls, yield curve control, excessive tax and regulatory policies, forced bitcoin ETF sales, and generally onerous restrictions on converting dollars into bitcoin. They will try to “stem the tide” of people moving their wealth from quicksand to impenetrable rock. Again, this is unlikely to work in a world where information can flow freely, the game being played is obvious, and bitcoin is already integrated into the legacy system. One risk is holding paper bitcoin, which can be confiscated much easier than real bitcoin, which is why self-custody education is important.
The problem with all of these “solutions” is they don’t solve the problem in fiat world, and in fact they draw more attention to the problem and the obvious solution. In the centralized world of the 20th century, perhaps the state could get away with these kinds of controls. In the decentralized and peer-to-peer 21st century, I find it highly doubtful these tactics will be effective.
The hard part of these predictions is the timing. Confidence in the fiat system has been degrading slowly for some time now. But the epochal shift may follow the “gradually, then suddenly” model. The “suddenly” part would likely be a triggering event, like a bank run (see the 2023 collapse of Silicon Valley Bank), a policy change (see the 2025 stock market collapse after tariff announcements), a failed bond auction, or a failure to resolve a debt ceiling standoff. As the US debt piles up, the system becomes more and more fragile and susceptible to smaller events wreaking greater and greater havoc on the sovereign debt bond market. Once the trigger happens and confidence in the fiat system, capital will flood into bitcoin as a safe haven. Like a game of musical chairs, those holding dollars last will lose when the music stops.
The Next Monetary Epoch
So what does the world look like once it completes the switch from fiat to bitcoin? I believe profound economic and social changes will follow. First, as mentioned before, the world will be repriced in bitcoin. Everyone will understand that bitcoin represents value, but very few will understand how it works. This is similar to how everyone understands how to search the internet, but very few understand how the internet itself functions. Second, debt — which is currently the foundation of the fiat system — will become less important for individuals, corporations, and governments. Right now, the fiat system perversely incentivizes a far higher debt burden than is rational. A bitcoin standard will place hard assets at the core of the new system: tangible, scarce, and valuable assets. Organizations will have to operate within real economic constraints — no more free lunch for governments. If they want to pay for something, they will have to tax their citizens directly, not print money.
Those who failed to prepare, saved their wealth in dollars, or are living on a fixed dollar income will suffer the most. However, even these people will ultimately benefit from a new system where their money cannot be debased. Early bitcoin adopters will become extraordinarily wealthy, especially those who had significant dollar wealth and transferred it before the world woke up to bitcoin. The wealth transfer described here is a scale and speed that is unprecedented in the history of the world.
In the end, bitcoin’s destiny will be realized as the new neutral, decentralized, and global standard of value. It will have grown from a humble cyberpunk research project to holding the weight of most global wealth on its shoulders, which is truly immense to think about. It will have proved critics wrong, humbled traders and speculators, and bent the knee of governments and corporations around the globe. It will have been victorious. Vires in numeris.