The more I learn about bitcoin, the more clear it becomes that the bitcoin story is not about greed, malice and waste like some would have you think. It’s not really about volatility or price, either. Sure, it has all of those elements but at the core it’s about a system change towards a more inclusive and egalitarian envisioned future. The nature of change at this scale, however, is that it’s really hard. They don’t call it creative destruction for nothing.
This week, the cases for the old system and the potential future (i.e., “The Bitcoin Standard”) are being showcased side by side.
Wednesday, the U.S. Senate held a hearing on central bank digital currencies (CBDCs) with a panel of people who have been exploring the potential for a CBDC, or digital dollar. Elizabeth Warren (I’m a supporter) echoed some of the standard anti-bitcoin sentiments (environmental impact, money for criminals, you know the ones). I don’t think she’s making a fair connection between transaction cost and energy use (see: Jack Mallers and lightning network) and her argument is missing some context (see: Nic Carter), but that’s for another post. Here she is:
Twelve hours prior to this hearing, the President of El Salvador was invited up during an impromptu Twitter Spaces chat to speak about their new law making bitcoin legal tender (he had to hop out of the middle of the conversation to witness the vote). Some of the prominent innovators of today were listening; Jack Dorsey, Mark Cuban, many of the leading voices in bitcoin and 22,000 others. At the time, Nayib Bukele admitted they didn’t really have a plan for mining bitcoins. The next day, he tweeted this:
Having listened to Bukele and seeing this enthusiasm, I’m impressed. He spoke about worthwhile reasons and measured decisions. He acted immediately towards exploring sustainable mining. I have little background context of the country or of Bukele himself, but was inspired by how well he held up speaking off the cuff to some of the most prominent names in the bitcoin community. Here’s the recording:
As I finish this post, I’m listening to a leader of the country of Tonga (@LordFusitua) speak about how bitcoin aligns well with their principles and culture. Another impressive, unscripted discussion. Word is that he has the Finance Minister of Fiji hopping on to chat in a little while. The cherry on top? Listening alongside me is Saifedean Ammous, author of The Bitcoin Standard, watching the thesis of his book coming to life in real time.
It’s a little mind-blowing when you consider the likelihood of this scaling across Brazil, Mexico, Argentina, and a number of other countries who have already signaled interest in holding bitcoin in reserves or adopting as legal tender.
I hope the US finds a way to get involved vs. trying to isolate. It doesn’t seem like our leaders have stepped back far enough yet or asked the right questions to fully grasp the purpose, potential and momentum of bitcoin.
Change is hard, and it’s here.
Thanks for reading, stay tuned for part III.
Andrew
@agbegin
PS: If you’re new to bitcoin, My Notes on Bitcoin Part I might be a helpful read.
PS2: This should go without saying, but nothing in here should be construed remotely as investment advice.
Great read, Andrew! Love the breakdown. I had 2 thoughts come to mind when reading this:
1. I'm also a fan of Senator Warren, but I also feel like she is failing to make a connection between the power of bitcoin (and other crypto) to serve as a financial services solution for the underbanked/unbanked in the US. This is particularly ironic because she is such a fierce fighter for the rights of the lower-income population in the US.
2. The use of geothermal is a very interesting angle. If this is indeed feasible, I wonder when our Icelandic friends will join the party? There's no other area on the entire globe with a greater concentration of geothermal energy. I believe it fully powers ~65% of all homes in Iceland, with much to spare. Without any way to export the excess geothermal, I think it just kinda sits there unused. Given the state of the Iceland economy (it has yet to come fully back since the complete crash of the economy in '09), it might also be a great way to lift the nation's financial situation.