I ran into this article today explaining how Bitcoin is a threat to US National Security.
I have read many articles like this over the years, conveying that Bitcoin is a terrible thing because it has:
- Volatility.
- It's not backed by a central authority.
- It's not regulated.
- It doesn't have intrinsic value.
- It’s a threat to the dollar's reserve currency status.
- China controls all of it.
- And it threatens the habitats of unicorns and rainbows...OK, this last one I made up, hehe.
Seriously though, let me break down the article and fill in some facts.
Satoshi Nakamoto...
“Satoshi Nakamoto, a brilliant Japanese software engineer, invented Bitcoin back in 2008…”
Someone needs to tell the authors that Satoshi is a PSEUDONYM! No one knows who Satoshi is or are. With a false statement like this, you know you’re about to wade through some bullshit.
“Not surprisingly, Nakamoto has done well, possibly enjoying a personal fortune exceeding $30 billion..”
No bitcoin has ever moved from the addresses we think Satoshi’s block rewards were originally deposited in. Whoever controls those private keys, controls that Bitcoin. But to imply that Satoshi intentionally scammed the entire world in accepting Bitcoin so he/she/them can walk away with the biggest bitcoin stash ever, is a big freaking stretch of the imagination, but I guess anything is possible (rolling my eyes).
Bitcoin as a medium of exchange...
“If Bitcoin becomes a major, or possibly even the primary, medium for the purchase of goods and services, the U.S. dollar will be looking at an inflationary nightmare with the Federal Reserve struggling to maintain price and interest stability through control of the money supply.”
There's no real danger of bitcoin becoming a primary medium of exchange in the United States domestically in the near future, a FED Coin maybe, but not Bitcoin. Because its being used as a store of value, and no one is wanting to depart with it.
“With soaring U.S. deficits and multi-trillion spending programs, investors could gradually come to prefer storing value in Bitcoin over U.S. dollars...”
This statement is highly misguided and not relevant. Even before Bitcoin, people didn't have the vast majority of their assets in dollars, they had it in real estate, stocks, bonds, gold, etc... Why in the hell would anyone have the majority of their assets in US dollars or any other fiat, there's no value appreciation there.
China...
“Today, over 65 percent of Bitcoin global market supply originates in China. This situation leaves the Chinese Communist Party in the cat bird’s seat. It can covertly influence matters to suit its own purposes, potentially manipulating Bitcoin supply to corrode, attack and disrupt confidence in the dollar.”
This statement screams a misunderstanding of Bitcoin. But let me indulge this a little. If China "decided" to initiate a 51% attack or change the code in some way, everybody would know about it, and Bitcoin would just hard fork.
Now you would have China Bitcoin and World Bitcoin, and everybody would move on. And everyone would have twice as much coin. And if both chains have value, then everybody is happy.
Bitcoin was created to be peer to peer and flexible. If the “peers” don't like it, then they split off into something that they do like. Nuff’ said. It's not the cataclysm that the authors are making it out to be.
Whiny entitled Americans...
"Bitcoin could grow into a favored global reserve currency, unfettered by concerns over national debt burdens, fiscal/monetary policies, or authoritarian controls."
If the authors are so concerned about the loss of the United States reserve currency status, they should place a bit more blame on the US policy itself, rather than on a technology that works better for people.
It sounds like a couple of whiny entitled Americans bemoaning the loss of an empire, but didn't have the monetary and fiscal discipline to make sure it worked for most people.
Not to mention there have been three world reserve currencies in the past 400 years (Dutch, UK, US). And the Dutch and British are doing just fine now. And if the United States loses some of its reserve currency status in the future, it will be just fine too.
In Conclusion...
If you read the article, most of it is about the high valuation of Bitcoin, the threat it poses to the US, and how its great for “our adversaries.”
The underlying tech, the cryptoeconomics, or the tens of millions of people it helps everyday was not mentioned. This tells you the article didn't have much substance to support its premise.
One thing is certain, change is inevitable. Time is peppered with innovations that work better than the systems they are changing. Bitcoin is no exception. Governments, corporations, and people will all get their say on how Bitcoin and crypto will integrate into our lives. But no one will get all the say.
To imply that the United States must ban bitcoin for national security reasons just to keep things the way they are is a ridiculous and unrealistic statement and the author's should know better.
Bitcoin is for humanity and humanity will get the final word on Bitcoin's future.
Stay frosty people.
