The fourth scenario: the spark

In an excellent article, Yorick de Mombynes explains 3 possible scenarios for the economic future around bitcoin. Privileging like him the scenario of chaos, assuming the Bitcoin reaches $ 200,000 in 2025, as the most plausible, I did not find myself exactly in the description, so here is mine, for the reader to judge.

2008. Highway for the Bitcoin

We are at a breaking point. The global economic model is primarily financial, and like finance, a healthy economy is primarily a growing economy. Gold being in limited quantities, it was first necessary to deindex the currency to leave a space of freedom and madness. It’s now done.
But this growth is alas! limited today by the simply material possibilities of our good planet Earth.
“Never mind, you just need to financialize the environment so it grows too”, think our economy experts with a sigh of relief. Technology, which can be called upon today like the Holy Spirit, will do the rest.
So let’s get into debt around the clock, financial engineering and population control are here to hold the edifice. What ? Are interest rates unsustainable? Well let’s go to negative interest rates. About what ? Do people use tricky ways to circulate value? Let’s ban cash and gold as a means of payment and enforce anti-money laundering and anti-terrorist financing (AML / FT) rules. Besides, one wonders why to have added terrorism in all this, if not for a soft power communication operation. “Watch on TV how nasty it is to use cash or claim the right to privacy! This is all terrorism in disguise, as the CNN fact-checker brilliantly demonstrated. “

In front of these barrels of powder wisely stored in the world’s financial shed, Bitcoin messianically appears, an out-of-frame thing that does not meet any classic criteria. Is it money, an asset, a store of value, digital gold, a means of payment, terrorist financing, a new legal UFO that breaks double-entry bookkeeping? A little bit of everything.

Bitcoin and the cryptocurrencies that follow in its wake with less success have turned into stones in the financial shoe. First of all a small pebble, it is only a speculative bubble without foundation, a new tulip without intrinsic value. Then in front of the rise in the price, we say to ourselves that there is something, and the actors of the finance rush, pinching their noses to buy the new digital black gold with bundles of hundreds of millions of dollars borrowed from the markets. Ten year later, the lifeline that did not exist in 2008 during the ‘too big to fail’ era is gently mooring in the real economy, gradually turning the banking world into ‘too big to sail’.

2021. Have small ladle of stable coin

Panicked, the central banks, feeling the tide, also decide to bypass the commercial banks by anchoring their currency to the real economy.

The Office of the Comptroller of the Currency (OCC) is first allowing commercial stablecoins to be used for payment activities between banks. Everybody get excited about this expecting a huge adoption of cryptocurrencies in return. The legal tender of fiat currencies via a stable coin is supposed to be maintained by imposing it in the hands of users, because be aware, the problem with fiat money is that your legacy commercial banking application is not very practical and a little old school. With the stable fiat you can shop in the blink of an eye. This same eye that will observe all your transactions to ensure that you are no longer black or terrorizing the government using other means than the trash ballot system, otherwise you will be seized of your assets in the blink of the other eye.

And above all, it will go much faster than bitcoin and much cheaper!

No, bitcoin users don’t do it for the smoothness of their user experience — it wouldn’t be! — or the fact that it is fast. Why the hell?

In the meantime, the fiat currencies are in turmoil.

2025. The new deal or the great merger

Alas, governments are going to release their last card. The ban ? Be serious ! the requisition? Let’s be more subtle! Furthermore, the population has understood it, the property value of bitcoin is incredibly high, which makes it very difficult to confiscate.

MicroStrategy still enjoys good notoriety among bitcoiners and the population of developed countries. It is no longer the company that owns the most bitcoins, but it has started the movement and skyrocketed the price of bitcoin to all-time highs above $ 200,000, equivalent in practice to the capitalization of gold. The population has rediscovered the benefits of stacking satoshis for the hardest days, and are not shy to use it in parallel to the economy, thus escaping the tax and transforming every person on earth as a terrorist in a yellow vest. The situation is no longer tenable.

Certainly, a few countries have tried to set up a mining infrastructure. But with the competition to scavenge after the 4th halving, most states threw in the towel. You might as well force miners on national soil to resell the mined bitcoins to the central bank.

The United States of America have lost much of its supremacy over China and Russia with the dollar’s general distrust. They can no longer finance wars useful for peace in the world, which is on fire. Europe is reduced to 12 countries. The others have joined UK and form the European Common Wealth. The coronavirus has become the new flu. Vaccines are developed for the 2–3 covid strains that dominate in early fall each year, and states vaccinate only a portion of their population that can afford it. Borders are closing and air traffic is collapsing for good.

On a beautiful day in February 2025, the President of the US summons Michael J. Saylor the CEO of MicroStrategy, Jack Dorsey the world king of payments after he bought LN-Strike few years ago, and Elon Musk now at the head of the largest amount of Bitcoin he bought with the financial cash generated by Tesla in 2021. Also present, Google, Apple, Microsoft and Amazon, Coinbase, Bittrex and Kraken. At their side, the president of the FED. The proposal is simple, either the DOJ confiscate their bitcoin by suing their companies for illegal activities related to terrorist countries, or they enter the game of the new deal to fight against economic terrorism.

The deal? Be part of the actors who are launching a new annex of the Federal Reserve, called the Decentralised Federal Reserve (DFR). In exchange for securing their bitcoins within the DFR, it wrapped them into digital fiat-bitcoin vouchers secured by the blockchain which will have the sole right of circulation on US territory. Of course the US looks forward to facilitating their legal or illegal activities as long as they are aligned with the interests of the United States of America! Our saviors of mankind will clean up the ecosystem of bitcoin holders themselves.

Europe follows by vassalizing itself in the Decentralized Atlantic Alliance. What else can Europe do? No longer any company in its territory has substantial bitcoin ownership and the euro-bitcoin exchange companies are all Headquartered in US. China and Russia are independently taking the same path with their own DFR.

Coinbase and Kraken now no longer deliver bitcoin or only at prohibitive costs because AML / FT procedures are expensive. Instead, they advise users to use a DFR account for fiat-bitcoin, simplifying the travel rule enforcement as recommended by FATF. Binance is reluctant, but following the complete change of management after the repeated sex and racism scandals of its founder Changpeng Zhao, the company decides to join the DFR. This makes its centralized layer 2 technology available for all cryptocurrencies. Fast, inexpensive and guaranteeing privacy thanks to the blockchain based on Liquid Network developed by Blockstream and LN-Strike infrastructure provided by Jack Dorsey, which runs in a secure black box on servers located in Fort Knox.

Privacy coins like Monero and Dash are listed back on exchanges again together with Ripple, once they are wrapped to DFR platform. The DFR platform is so powerful that listing a new token to any exchange is just a matter of being listed by the DFR platform, in return of applying a few KYC/AML/travel rules defined by FATF.

The new policy is working very well, bitcoin’s UTXO base (unspent transactions, an indicator of bitcoin activity) is drastically shrinking, which is welcome. This period is recalled thus as the great merger. A vast communication campaign to highlight the success of this DFR platform, in particular capable of banking the unbanked, is a real success.

At the same time, the gasping dollar is being reindexed to gold, although there has been some bitter internal discussion to index it to bitcoin. The president ruled in favor of gold, which remains a sure tangible value, especially in terms of popular acceptance. Moreover, like silver, we see that the price of bitcoin increasingly correlates with that of gold.

Coup de grâce

Despite the growing activity of the main instigator of the decrease in the size of blocks, the ‘small blocker’ Luke Dashjr, to save time and develop a Bitcoin scalability solution, the bitcoin blockchain saturates over 1 terabyte, gradually pushing the unfortunate owners of bitcoin nodes to abandon maintenance. More out of spite because they note that in fact, the DFR has done more to lighten bitcoin than Lightning Network. Certainly by giving up its soul, but what to do with a population that has never really been interested in cryptographic security and even less in the cypherpunk manifesto, and throwing itself like a lamb into the mouth of the wolf of the DFR. The price of Bitcoin is slowly falling, its volatility is sagging. Peter Schiff is not happy because he has been full bitcoin recently! Qanon sites explain that DFR issues far more bitcoin-fiat than it owns underlying bitcoin, quoting the compromising sentences of new Coinbase CEO Francis Suarez, the former mayor of Miami, also previously a DFR minister. Nobody is even sure the transactions on DFR are really private after a few court cases against European companies indicating the NSA is likely plugged into it!

Marketplaces offer many financial derivatives from bitcoin. A big communication campaign has made it possible to call bitcoin what is in fact fiat-bicoin. True bitcoin is now called the ‘decentralized digital underlying asset’ according to the new doxa of world leading economists.

The community of maximalists is tearing itself apart. Each group of maximalists sometimes comes together around their own fork. There are maximalist traders led by Max Keiser now CNN anchorman, who do not take a bad view of being able to legally enjoy their earnings. After all they were there for that! There are libertarian maximalists, led by Adam Back. Even stuck with their bitcoins, they compete in ingenuity on the darknet to be able to use them. But their leader get caught and join Ross Ulricht in prison. Finally, the technological maximalists, led by Peter Wuille and Gregory Maxwell, who work hard to counter the DFR. But it is clear that we need a new Satoshi Nakamoto.

Bitcoin is dead, long live bitcoin!

However, a group of anonymous cyber activists are learning from this fiasco. The technology is there. There have been several bitcoin forks, one of which, bitcoin-punk, almost succeeded, but why bother, it could only just roll back the deadlines.

No, we should create something that is effective from the start against the attempt to hoard the tokens, as institutions have done with bitcoin, that was the Achilles heel that the United States aimed at with the arrow of the DFR.
A new whitepaper is published on bitcointalk describing a new technology, the Phoenix, and soon after, the source code for the technology is made available. In fact, the code was developed before the whitepaper, old-fashioned, like in the good old days.

On January 3, 2030, 21 years to the day after its famous predecessor, the Phoenix genesis block is published including on the headline of The Times of the day:

Scientists discover new strain of coronavirus.

But this is another story.