Once unleashed, the Domino Effect is unstoppable
Bitcoin adoption is happening fast. Only 12 years into its existence, the digital currency has already been adopted as legal tender by the first nation-state. Shortly after, politicians from Brazil, Argentina, Paraguay and Panama signaled their support. Nigeria leads the world in Peer to Peer payments, using bitcoin’s 2nd layer, the Lightning Network, and this is true even after The Nigerian government tried to ban it. A group calling itself Project Mano is currently lobbying Ethiopia’s government to mind and hold bitcoin, with billionaire Jack Dorsey promoting their efforts.
In the U.S., bitcoin adopters tend to skew overwhelmingly white, male, and libertarian. It’s gaining traction around Republican politicians though. Texas Senator Greg Abbott and the Texas Department of Banking made Texas the 2nd state after Wyoming to empower state-chartered banks to custody bitcoin. Wyoming’s Senator Cynthia Lumis, a Bitcoiner herself, is evangelizing other US Senators, on the Senate floor. Meanwhile, my favorite Senator, Elizabeth Warren, has missed the forest for the trees, and is rampaging against bitcoin on the misinformed and plainly wrong assertion that bitcoin will destroy the environment.
On the contrary, Bitcoin mining will drive a global rush to adopt renewable energy. Speaking of billionaire Jack Dorsey, his company Square is developing 100% renewable Bitcoin mining operations right now. So is Norweigan billionare Kjell Inge Rokke. The billionaire class is adopting Bitcoin as an investment strategy, too. Famed investor Paul Tudor Jones allocates 5% of his wealth to bitcoin, with potential plans to add to his position.
Here’s the thing: There will only ever be 21 million Bitcoin. Unlike any fiat currency, or even gold, bitcoin’s supply is capped. Over the coming decades, the Bitcoin network will absorb the monetary energy of our entire global economy, transforming the geopolitical playing field beyond our imaginations. El Salvador was the first domino to fall, but the Domino Effect, once unleashed, is unstoppable.
Progressives have so many reasons to cheer the adoption of bitcoin. But if we don’t get our heads out of our proverbial asses, we will forfeit the opportunity to have a voice in the decentralized monetary system of the 21st century. Furthermore, if the communities Progressives purport to care about-women, people of color, LGBTQ communities, immigrants, and low income workers- are dissuaded from adopting bitcoin, they will see their purchasing power erode disproportionately over the coming decade, buying into a universally accepted, scarce resource at much higher prices. Bitcoin adoption is Game Theory in action, and Progressives are losing.
Bitcoin, like the telephone and Facebook, benefits from the Network Effect. Essentially, a phone is useless if there is no one to call, but it’s very useful when you can call everyone you know. Like the telephone, bitcoin becomes more valuable with increased adoption. Like all early adopters to any network, the earliest to adopt the network gain the largest increase in value from the network. Bitcoin is a monetary network, and money is the largest social network of all. The kind of power it may yield is boundless.
Facebook was just a contentious Harvard experiment when it first started in the Winkelveii Twins and/or Mark Zuckerberg’s dorm room. As use of its network spread across college campuses and beyond, Facebook quickly dominated the online social space, leaving Myspace, its predecessor, in the dust. Seventeen years into its existence, Facebook has the power to sway multiple democratic presidential elections.
The question I pose to my fellow Progressives is this: What happens if North Korea, Russia, China and Iran are next nation states to adopt Bitcoin? There is already speculation that their governments are secretly mining and holding it to bypass US sanctions. In China’s case, its government likely credibly views bitcoin as a more viable threat to China’s economic dominance than the US dollar. While the Chinese government is cracking down on mining operations, we do not know for certain that they’re not simultaneously mining their own bitcoin to monopolize power. We do know that despite several “bans” the Chinese government has never once, for even a second, successfully shut down the Bitcoin network.
Furthermore, what happens if, in the US, Bitcoin is viewed through a partisan lens, and only Republican led states adopt bitcoin friendly laws? El Salvador is already seeing an unprecedented surge in business and real estate interest, just one week after passing its bitcoin legislation. Meanwhile, Austin, Texas and Miami, Florida are competing to be the next Silicon Valley. Miami Mayor Francis Suarez has gone so far as to allocate city resources to explore the feasibility of paying city employees in bitcoin.
Do “blue states” want to lose out on attracting the best emerging talent, and all the job creation that comes with it? Speaking of job creation, the International Brotherhood Electrical workers Union was instrumental in blocking the passage of an anti-mining bill that passed in the New York senate. Progressives have been fighting to retain its Union support. Legislating the elimination of high wage jobs in an emerginc industry is not going to win them any votes.
While these questions may seem like hypotheticals for the distant future, the future is here. At the very least, it’s quickly approaching. The world is adopting Bitcoin at nearly twice the speed it adopted the internet. Ironically, New York Times’ Paul Krugman is lodging the same complaints against bitcoin that he once lodged against the internet. And we all know how the internet turned out.
Progressives can adopt Bitcoin now, collectively owning a larger stake in the world’s decentralized, censorship resistant, monetary network, or forfeit that stake to dictatorships, and opportunistic domestic politicians, some of whom never abandoned Trump. The clock’s ticking.