In theory, Bitcoin could continue to exist even if all fiat currencies in the world disappeared.
Because Bitcoin doesn’t need fiat currencies
In fact, for making payments in Bitcoin no need to use fiat currencies. They are only required for the first purchase on cryptocurrency exchanges, for example, if you do not have other cryptocurrencies.
In a world where fiat currencies no longer exist, each of us will receive income directly in Bitcoin or cryptocurrencies, so in theory we could do without using fiat currencies.
However, it is only a risk theoretical scenario, but unrealistic, given that Bitcoin is a deflationary currency while the current economic system is based on inflationary currencies.
Therefore, a distinction must be made between theory and practice, that is, between possible scenarios, even if they are not very likely, and those that are definitely likely.
A scenario in which fiat currencies disappear, but Bitcoin remains, theoretically belongs exactly to the possible scenarios, but is unlikely.
The role of Bitcoin in the modern economic system
The answer to the question of whether a flagship cryptocurrency could theoretically survive the disappearance of all fiat currencies is definitely yes, but it is probably more interesting to focus instead on the role that Bitcoin can play in the current global economic and financial system. in this sense, it seems that so far we see only prospects in the distant future.
The current economic system in heavily debt-based, that is, on the fact that consumers, companies and governments can borrow money in order to generate expenses or investments that they cannot pay with their current funds.
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In theory, Bitcoin can exist even without fiat currencies.
Debt is sustainable only if the debtor can fully repay it on time, but the real value of the monetary debt changes over time. Its face value always remains the same, even if it decreases as the debt is repaid, but its real value changes all the time.
The fact is that due to price changes, the purchasing power of money is constantly changing year after year. Concerning fiat, inflationary currencies, purchasing power always tends to decrease as prices tend to rise. This is also partly due to the expansionary monetary policies of central banks issuing fiat currencies.
The purchasing power is actually the real value of the currency, so if it goes down, the real value also goes down. Inflationary fiat currencies tend to decrease their purchasing power and hence their real value, and this also applies to debt. Taking inflationary foreign currency debt helps to pay off it, especially in the case of high inflation.
The deflationary nature of a leading crypto asset
Bitcoin, on the other hand, is deflationary, because its monetary policy becomes less and less expansive until at some point it simply ceases to be so. Consequently, its value tends to increase over time, unlike fiat currencies, so collecting debt in BTC seriously risks being a bad idea.
For example, those who borrowed 1 BTC four years ago, when its value was less than $ 7,000, if they returned it today, they would always have to return 1 BTC, but in the amount of almost $ 70,000.
In a debt-based economic system, there is a need for inflationary currencies, while deflationary currencies tend to be not only unhelpful for reducing debt, but risk even doing harm. However, they also have other uses, such as trying to protect savings from the risk of losing purchasing power due to inflation.
In conclusion, we should not ask ourselves if Bitcoin can theoretically survive even without fiat currencies, because the answer is obvious but unrealistic, but it would be better to ask ourselves if fiat currencies will be excluded from Bitcoin.