After a decade of launching, bitcoin may well be starting to serve the cash function at some scale across the world for global trade.
For countries like South Africa for example, which have significant capital controls, you’d think bitcoin could easily be a useful tool.
Here it would be more small players. If Turkey and South Africa for example want to do trade, then they can just go through the official channels and fill all the paperworks which would probably get approval.
But if a small South African business wants to import figs from Albania, then it would probably cost them a lot to do all this paperwork, so they can just send bitcoin.
The latter has been the primary story for bitcoin international trade. Individuals or small businesses gaining efficiency by bypassing official or traditional channels usually to the benefit of the economy because there is a bit too much red tape everywhere.
A relatively new and developing story however is at a different scale because if Iran and South Africa for example agree to trade (ignoring the politics here with these being just examples), then they can’t officially do so because the American banks won’t let them.
So from the perspective of Iran and South Africa, by using bitcoin they would gain efficiency and bypass ‘red tape’ to the benefit of their economy.
In addition for this fig farmer, now that he has developed a pipeline of bitcoin trade, he has gained certain capabilities.
It’s not always better than the capabilities he had in fiat, which generally is safer to custody, non volatile, and you can buy bread with it at the shop instead of having to convert it first. But it is a capability that can sometime be better in being much faster to transfer for example and in being irreversible so you’re sure you won’t be scammed.
Likewise at an institutional level, although the capability may arise out of necessity or just desire, a pipeline has been built and that can have other uses, both expected and potentially unexpected like for example you’re holding a hard asset and a global asset, so if you need to prop up your fiat, you could potentially use it presuming more bitcoin are coming in then out.
That’s not an effect you’d think of, but just like an actual pipeline has knock on effects, so does this one.
The best part of this story is what happens after, or what actually happened. We’ll start with Russia 2017 when Putin heard of bitcoin. The rest is fiction and a narrative because we don’t know, but it’s probably what happened.
As a noob he went to Venezuela, said look at this cool new thing. They launched Petro, a complete failure. Iran was thinking of doing the same, but that wasn’t quite a use case at least for the time, so China maybe told them they been doing this bitcoin trading thing, why don’t you.
China set up those pipelines first organically and at the market level with the state probably having no clue of it as otherwise they wouldn’t have been so stupid as to ban crypto exchanges.
Such pipeline may well have been with Brazil, years after the first international trade in bitcoin between London and New York we now know as pizza day.
With one pipeline established, we’ll simplify here to say Iran is establishing a new one. Three being a crowd, we may well get certain network effects of a developing alternative global payment system for trade.
That fig farmer therefore is not just accepting bitcoin (he’s a complete fiction by the way, we don’t know of any fig farmer in Albania accepting bitcoin). He is instead a node or a connection point in a newly emerging global payment system.
Every new node that is added, and for good reasons rather than gimmickly, is an expansion of the bitcoin payment system, and thus increases its value to the power of two because both traders benefit as otherwise they’d use something else.
This gradual addition of new connection points then leads to the full integration of bitcoin within all relevant systems to the point it’s no longer a developing story, but a developed one with our kids not quite knowing that bitcoin was ever a new thing in the way we know it.
This network effect further gives bitcoin a head start as an alternative to it would have to go through the same process which would take years or decades.
For something like BCH or eth to be used for this purpose instead of bitcoin, you’d think there would need to be a good reason as well because setting up such new pipeline would take time and would cost as if you are not a coder for example, you’d need to pay someone to integrate it.
New additions however are easier as they piggy back on the same pipeline, but that also creates barriers in as far as why change the current set-up or habit?
But ethereum has a different use case in dapps and defi, so if you have eth, then there would be some pressure on the other side to accept it because why should you change it to bitcoin.
Yet for an alternative to compete in this use case would be difficult because bitcoin serves it fairly well.
So one can see a path to growth for it and at global scale for actual usage, with bitcoin now more and more becoming a tool for international trade.