In 2009, a new alternative to traditional finance emerged — Bitcoin — a cryptocurrency that marked the beginning of the digital revolution.
What if Satoshi Nakamoto's article 'Bitcoin: A Peer-to-Peer Electronic Cash System' had never seen the light of day? Would the digital asset revolution have been inevitable, and would the world of finance have taken a different path to fill this gap? What would the world be like without Bitcoin?
In this article, we will examine two main questions regarding this hypothetical scenario: would the cryptocurrency revolution have arisen without Bitcoin and how would the absence of Bitcoin have affected the development of the global economy?
Was a decentralized digital currency inevitable?
Bitcoin, recognized as the first modern cryptocurrency, did not emerge in isolation. Long before its appearance, there were projects attempting to create digital currency.
One of the predecessors of modern crypto is the DigiCash project, founded by David Chaum in 1990, which presented cryptographic payment systems aimed at ensuring privacy and security. The centralized nature of DigiCash raised distrust, so the system was not widely adopted, and the company eventually went bankrupt.
The next was the e-gold project, founded by Douglas Jackson and Barry Downey in 1996. Funds in this system were backed by physical precious metals: gold, silver, palladium, and platinum. However, by the end of July 2008, under pressure from the U.S. authorities and facing regulatory crackdowns, the e-gold payment instrument effectively ceased to function.
The closest precursor to modern Bitcoin is the concept of decentralized digital currency Bit Gold, proposed by Nick Szabo in 2005. Although the idea itself was not realized, it is considered a forerunner to Bitcoin's architecture.
So, if Bitcoin had never emerged, it is likely that this revolutionary role would have been taken by another similar project.
If Bitcoin had never emerged: possible alternatives
The absence of BTC could have significantly impacted the development of traditional financial technologies. Mobile payment platforms like Apple Pay, Google Pay, or PayPal would have become the main drivers of change in cashless transactions. Fintech startups might have received much more investment, which, in turn, would have accelerated the implementation of innovative technologies — for example, the expanded use of biometric identification, artificial intelligence, and automated asset management.
Without an alternative challenge in the form of decentralized cryptocurrencies, banks and financial institutions could have integrated centralized digital currencies much faster and implemented their technologies based on them. The role of central bank digital currencies (CBDCs) would likely have increased.
How would the finance sector change?
In the absence of Bitcoin, the momentum to explore and integrate blockchain solutions could have been significantly weaker. This means that the global trend towards the decentralization of finance might not have started at all. Thus, the absence of Bitcoin would have significant consequences:
The absence of decentralized finance (DeFi). Banking services would have remained traditional, and innovations would have developed more slowly. Without decentralized platforms, alternatives to lending would not have emerged, and all loans would have remained in the hands of large banks.
Less investment in blockchain technologies. In the absence of Bitcoin — and the confirmation of blockchain's effectiveness — financial institutions would not have rushed to invest in decentralized technologies. Perhaps blockchain would have found wider applications in other sectors. We are used to associating it only with Bitcoin, but distributed ledger technology is used in many fields: logistics, healthcare, education, document management, etc.
A more stable financial market. The absence of Bitcoin would reduce risks for investors and also weaken speculative activity, which often leads to sharp crashes or surges in asset values. Investors would have been forced to look for other ways to generate profits — traditional stock, bond, or real estate markets.
Was the emergence of Web3 impossible without BTC?
Web3 — a concept based on the ideas of using DeFi and blockchain — would have developed much more slowly without the push that Bitcoin provided. Other cryptocurrencies, such as Ethereum and Litecoin, might not have been created or would have appeared much later and looked different from today.
Would NFTs and metaverses be so popular?
Without Bitcoin, the NFT market would hardly have achieved such rapid development. It was crypto assets that became the foundation for unique digital assets and trading platforms.
Regarding metaverses, without the creation of cryptocurrency, they might have remained just ideas without a real economic component.
What would they invest in instead of Bitcoin?
Venture capital plays a key role in financing innovations, directing significant funds into high-risk but promising startups. Without Bitcoin, venture investors might have focused on other sectors:
Development of fintech. Fintech, which transforms the financial services sector through mobile banking, online payments, and peer-to-peer lending, could have developed much faster if it had received more active investments.
Development of AI: Similarly to fintech, artificial intelligence technologies would have gained momentum in their development and could have been integrated into society more quickly.
Development of biotechnology: A greater amount of investment in biotechnology, such as genetic engineering, could have led to accelerated scientific breakthroughs in medicine and improvements in the healthcare system.
Development of green energy: Environmental issues and the need for alternative energy sources — for example, in the use of wind or solar energy — could have attracted investors to invest more capital.
Certainly, investments in all these areas exist now, but without Bitcoin, they might have been more lively and initiated some more noticeable changes in one sector or another.
Social and political consequences
The absence of Bitcoin could have affected not only the financial sector but society as a whole.
First of all, without cryptocurrency, people would have less financial freedom. Bitcoin allowed people to own assets without intermediaries, banks, or governments. Cryptocurrencies enabled reduced costs for international transfers and allowed financial operations in countries with unstable economies.
The absence of Bitcoin would also mean stricter financial censorship. In a world without BTC, it would be harder for people to bypass sanctions and restrictions, as banks could more closely control how money is spent and to whom it is transferred. For example, blocking accounts for political reasons would have been much more effective.
Cryptocurrencies have also forced the banking system to evolve — to introduce new laws, develop their own digital currencies, and change approaches to financial control. Without Bitcoin, regulators would have acted more slowly, and CBDCs likely wouldn't have developed as much.
Conclusions
A world without Bitcoin would be radically different from what it is today. In fact, Bitcoin launched the idea of financial freedom and decentralization. Without it, the world could have remained completely without an alternative financial instrument, under the control of state and banking structures.
Perhaps we would have witnessed a faster development of traditional financial instruments, but with a complete centralization of the financial system. DeFi and NFT technologies would not have launched, and blockchain would have remained just a niche technology used limitedly in corporate sectors.
Ultimately, one can discuss this history for a long time, making hundreds of assumptions, but Bitcoin has already become a reality that has forever changed the financial landscape. Its impact has gone far beyond the cryptocurrency market, transforming approaches to financial independence and asset decentralization.