Is it possible this year that one or more countries will drop fiat currency and more to BTC? If so what country would do so? With the onset of the global economic collapse many countries will be driven to near financial extinction.
It would be great to see two or three smaller countries convert to BTC as a national currency. Even better if North Korea and Iran are not in the top 20 to do so. However most governments aka central banks will fight the move of a country to use BTC as a national currency.
I think Argentina would be a good candidate to do so, however there are several huge obstacles to a BTC national currency. Let's explore this a little.
The Argentine people have suffered 70 years of currency instability since dropping the gold standard in 1970. Many people are already using cryptocurrency and paying a premium for US dollars.
A 2018 GDP of 519.9 billion USD would fit well in the BTC network with daily remittances operating on second layer solution such as the Lightning Network.
Peso ley, 1970–1983
Peso argentino, 1983–1985
Austral, 1985–1991
Peso convertible, 1992–present (with 40% inflation so far in 2020)**
So how would a country transition to BTC? If you are dropping your fiat it would have no value to buy BTC. I am certain there are already written plans on how this transition would occur. Here are a few thoughts.
Argentina’s Gold Reserves was reported at 2.9 USD bn in Mar 2020. However their gold reserves are dropping this year. It's possible the government is using their gold to purchase essentials during the pandemic.
Develop a state owned BTC mining farm
Sell gold for BTC
Sell other state owned assets
Distribute BTC to the population from the sale of gold and state assets
What will the effect on the BTC market be when nations start to use bitcoin? If BTC follows other models of growth it could quickly pust up to a very high market capitalization and then flatten over time. While many whales are setting on large stacks of bitcoin as the price get high and there are a billion plus people using it, it will become much more stable.
The economic hardships that will be coming in the months and years ahead will change behaviours that in many cases will drive more people away from fiat currencies and trust in government's.
The fiat bubble to bust cycle has happened in more places that Argentina and was very well explained by Chico Crypto.
