What if Trump and Elon make Bitcoin and Dogecoin legal tender in America?

Imagine waking up in an America where Bitcoin and Dogecoin have replaced the dollar. The President tweets, "Farewell, Federal Reserve," while Elon Musk, clutching a Dogecoin plushie, heralds a new financial epoch.

While this may seem like a fantasy, it appears disconcertingly plausible, given Donald Trump's return to the White House and Elon Musk's growing influence.

Elon's Visions, Trump's Actions

Trump, known for his disruptive nature, appears intent on establishing the U.S. as the "crypto capital of the world." His administration is considering establishing a Bitcoin reserve to supplant gold.

And Elon? He now leads a government agency known as the Department of Government Efficiency (DOGE). If you find that coincidence striking, you haven't been paying close attention.

Bloomberg reports that Musk was the driving force behind Trump's critical decision to oppose government funding.

Cryptocurrency markets naturally surged following Trump's election victory. Bitcoin reached $108,000 on December 17, more than doubling in value since the beginning of the year. Dogecoin has also seen a significant rise, reaching approximately $0.30.

Elon's tweets are no longer merely memes; they are policy teasers. For the first time, I have his notifications turned on. Everyone is watching this man's every move.

With DOGE as the face of a government efficiency department, speculators have invested billions in Dogecoin futures. Open interest has skyrocketed from 7 billion to 8.3 billion tokens in a matter of weeks.

However, it's not all smooth sailing. Cryptocurrency markets are experiencing wild fluctuations. Bitcoin prices have been more volatile than Wall Street in 2009. A single statement from Fed Chair Jerome Powell sent Bitcoin tumbling from around $106,000 to $95,000 at the time of writing.

Envision if Crypto Became America's Legal Tender

Let us indulge in some speculation. Suppose Bitcoin and Dogecoin replace the U.S. dollar as official currencies. It would undoubtedly send shockwaves through the global economy. The U.S. dollar, the world's go-to reserve currency and America's formidable weapon, would lose its dominance.

Countries and businesses holding dollars would engage in panic selling, destabilizing entire economies. Bitcoin and Dogecoin, on the other hand, would be burdened with responsibilities they are ill-prepared for. Their prices would need to stabilize, a daunting task given Bitcoin's notorious swings of thousands of dollars within hours.

Inflation as we understand it would be irrevocably changed. Traditional economic principles would become largely obsolete. We know that Bitcoin has a hard cap of 21 million coins, preventing it from being inflated into oblivion like fiat currencies. Dogecoin, on the other hand, continues to mint coins, albeit at a reasonably predictable rate.

These mechanisms would redefine inflation rates, but at what cost? The average American would struggle to navigate the volatility, and businesses would demand more transparent pricing frameworks for goods and services.

Speaking of frameworks, how would cryptocurrency taxation work? Trump has remained silent on this matter. Blockchain transactions are decentralized, meaning the government would lose its grip on taxation.

And what of hacking? According to recent reports, North Korea has stolen more cryptocurrency than ever before this year.

Moreover, let's not assume this transition would be seamless. Cryptocurrencies are notoriously inconvenient for everyday spending. Imagine buying a cup of coffee with Dogecoin—its value could swing so dramatically that its price could double or halve before you finish your sip.

Salaries, rent, groceries—everything would be enveloped in a nightmare of conversions. People might resort to using the dollar as a shadow currency to interpret prices, similar to how unstable economies unofficially rely on the dollar. How disheartening would that be?

But then again, convenience is not the primary goal, is it? Revolutions seldom are.