Letter #64: Bitcoin - A Destabilizing Force For Good
Read to learn how political attacks against Bitcoin reveal how afraid politicians are of Bitcoin’s success and what it means for their own corruption.
It is a common belief in democracies around the world that politicians are meant to serve their country and their constituents with little thought for themselves, their livelihoods, or their own proclivities. Citizens in democracies are commonly enabled to elect some politicians after all. If you believe in someone’s agenda and vote them into a position of power, shouldn’t you then have some expectation that they will use that power to represent and protect you and your family?
While there are certainly some politicians in the world who put their own interests aside in favor of their country and their constituents, we are bombarded with nearly constant examples of politicians who say one thing and do another, no matter the consequences. Who can forget when U.S. Senator Elizabeth Warren was caught flying to an event in a private plane after making environmentalism and the “Green New Deal” a chief cornerstone of her ideological platform? Another similar example came just last week when U.S. President Biden chose to blatantly ignore a store’s mask mandate, even after he and his administration have spent months begging all Americans, including those who are vaccinated against COVID-19, to wear masks in public spaces. Actions speak louder than words, and these actions show that many politicians prefer to serve their own interests at the expense of everyone else’s.
There is perhaps no greater example of political self-dealing than in financial markets. Day after day, politicians mortgage their respective countries’ financial futures for generations by taking out debts that they have no hope of paying off and by inflating away the value of citizens’ savings by expanding the money supply at an ever-quickening pace. Their ability to completely control the money supply and their desire to ingratiate themselves with citizens through easy money policies is a toxic combination. It should come as no surprise then that Bitcoin, which is wholly resistant to political machinations, has received vitriol from some of the most recognizable politicians around the world, even quite recently.
Bitcoin: A Political Pariah?
The most recent Bitcoin critic to come out of the political fold was none other than life-long politician Hilary Clinton. For those who don’t know, Hilary Clinton has had a significant impact on U.S. politics, from her roles as First Lady and Secretary of State, to her multiple failed presidential campaigns and her stranglehold influence on the U.S. Democratic Party. It seems safe to say that when Hilary speaks, millions listen.
Her comments came during an economic forum put on in Singapore by Bloomberg. She criticized Bitcoin and cryptocurrency as an attack on the sovereignty of the U.S. dollar as the world’s reserve currency and as being capable of destabilizing nations of all sizes. Her comments echo the sentiments of politicians around the world who in recent years have expressed severe concerns about the impact that “crypto” is having on their ability to control their constituencies and their financial markets.
There’s no sense in trying to argue with them in my opinion. Hilary, and those critics who came before her, are absolutely correct on both counts, at least as far as Bitcoin is concerned:
Bitcoin Will Be The World’s Next Reserve Currency
The U.S. dollar has been the world’s reserve currency for nearly a century and that status has afforded the United States an extensive amount of privilege and control over countries large and small. It is no secret, nor should it come as a surprise, that nation-states like China and the European Union would love for their own currencies to take the U.S. dollar’s place in the financial spotlight. Indeed, history has shown a preference for toppling reserve currencies every hundred years or so:
All of the global reserve currencies so far have been completely controlled by their issuing government. Bitcoin, on the other hand, is totally free from control by any government, corporation, or individual, no matter how much power such entities may have elsewhere in the world. No wonder politicians who are used to people hanging onto their every word and command fear Bitcoin so deeply.
Perhaps the most enticing feature that will drive Bitcoin’s candidacy as the world’s next reserve currency is the fact that its supply is completely locked at twenty-one million coins. No more will ever exist. Why does this matter? Because prior global reserve currencies typically have met their ends after questionable monetary policies enacted by their respective governments led to the collapse of the currencies through rampant inflation, and even hyper-inflation in some instances. Bitcoin is inflation-proof. In other words, it’s simply impossible that inflation could kill Bitcoin.
Bitcoin Will Destabilize Governments
Governments and the politicians running them would like you to believe that political instability is inherently a bad thing. After all, if they can convince you that the evil you know is better than the (supposed) evil you don’t know, you’re much less likely to rock the boat and try to change things. Corrupt governments stay in power by convincing citizens to accept the status quo.
So how will Bitcoin change that? Bitcoin takes control of money, one of the most powerful tools in humanity’s history, out of the hands of governments and puts it in the hands of the people. And people will be able to retain that power indefinitely. Self-custodied Bitcoin are extremely resistant to confiscation and the Bitcoin network, the strongest computer network in the world, has passed its entire existence without a successful protocol-level attack.
A government that can’t control its people’s money is a government that is controlled by its people rather than the other way around. In that sense, Bitcoin will help to destabilize the overbearing, nearly omnipotent governments that exist today and will replace them with governments that finally govern in the interest of their people.
Will Bitcoin lead to a better world? That certainly is the hope.
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Crypto Roundup 🤠
Bitcoin ETFs: An Australian fund management company has launched an ETF that tracks companies who either drive 75%+ of their revenue from Bitcoin or hold 75%+ of their assets in Bitcoin. Read more
Mr. Bitcoin: Bitcoin proponent Jack Dorsey has stepped down from his role as CEO of Twitter, with many believing that he will use the extra time to focus on Bitcoin projects at his other company, Square. Read more
Bitcoin Corporations: Many multinational corporations are using cryptocurrencies to facilitate cross-border money transfers, with Bitcoin being the most commonly used. Read more
Into the Twitterverse 🐥
Our monetary system doesn’t need to be fixed. It needs to be replaced:
We are still early to Bitcoin:
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This is not financial advice. This newsletter and related content are for informational purposes only. Cryptocurrencies and digital assets can be risky. Always do your own research before making any sort of investment.