I love this thread:
1/ Mass adoption of Bitcoin is inevitable
2/ Bitcoin is first perceived as an internet toy by cypherpunks.
3/ Its rapid price increase makes a small group of people rich and brings media attention.
4/ The media, the financial and tech establishment (Wall St. and SV), having failed to buy Bitcoin early and capture the growth, denounce it as a Ponzi scheme/bubble/MySpace of blockchain etc.
5/ A large number of scammers jump onto the Bitcoin hype-train and create their own cryptocurrencies claiming to be superior though lacking critical qualities including decentralization, security, credibility of monetary policy, immutability, distribution, infrastructure & others
6/ The retail, VCs, HFs, lacking understanding of monetary economics and applying inappropriate valuation models, invest into the shams that all other cryptocurrencies are, creating more noise and confusion as the prices of these altcoins increase at a rate higher than Bitcoin.
7/ Well connected VCs/HFs are given discounts on the investments only to then dump much of what they bought onto the retail.
8/ The world watches as the bear markets continue to wipe out more and more altcoins as these fail to deliver any useful product and constantly show cracks with regards to all crucial properties of a “cryptocurrency”.
9/ Bitcoin, meanwhile, is able to retain its value best and its price continues to increase steadily in the long run.
10/ People, burned in the altcoin craze, witness and learn about Bitcoin’s undisputed superiority across all characteristics.
11/ On the eve of and during the next bull markets, Bitcoin’s unshakable and antifragile record exacerbates the chronic fear of missing out.
12/ Hyperinflating fiat currencies are further contributing to the adoption of Bitcoin as it becomes the only means of preserving wealth for many people.
13/ Investors and high net-worth individuals are convinced to allocate a portion of their portfolio (1-5%) to Bitcoin to capture further growth, as well as increase Sharpe ratio of their traditional portfolios.
14/ Such speculation facilitates a ‘speculative attack’ on ““stable”” fiat currencies as the increase in demand for Bitcoin necessarily involves a reduction in demand for fiat currency causing higher expected fiat inflation (see
@ pierre_rochard Speculative Attack article).
15/ Central banks, in an attempt to adapt to the new conditions, start to accumulate Bitcoin (somewhat similar to gold today) causing the price to increase more and “legitimize” Bitcoin even further.
16/ Bitcoin’s market capitalization is now in the tens of trillions. One of the greatest monetary wealth transfers in human history has occurred. Most of the investors are reaping large profits and are willing to part with some of their Bitcoin to pay for their purchases.
17/ Bitcoin’s volatility subsides as both the market cap and the liquidity are larger than ever.
18/ More and more people demand to be paid in Bitcoin now that it has proven to be a good store of value given its disinflationary (later deflationary) nature.
19/ Bitcoin’s use as a medium of exchange becomes a widespread practice.
20/ Bitcoin is now also increasingly used as a unit of account.
21/ Due to the emergence of a superior, uninflatable, new monetary standard, people increasingly store their wealth in Bitcoin rather than fiat currencies. Central banks’ power is reduced and previous local monopolies on money are described by historians as a relic of the past.