In a commentary published by The Wall Street Journal, John O. McGinnis, a law professor at Northwestern University, and Kyle W. Roche, a lawyer at Boies Schiller & Flexner, argue that Bitcoin is booming because it’s become a trusted alternative when fiat money’s value is corrupted by politics. I totally agree.
“[Bitcoin] is thriving,” note McGinnis and Roche. “A prime reason is the distrust many citizens have in their government’s currency. They want to use bitcoin as a hedge or an alternative mechanism of payment and transfer when government currency doesn’t efficiently perform such basic functions. It’s no surprise that millennials, many of whom understand the digital currency much better than their baby-boom forbears, are investing in bitcoin at far greater rates.”
One important lesson from Brexit, the election of Donald Trump to the presidency of the US, the almost-victory of Bernie Sanders in the US Democratic primaries a few months earlier, and the rise of “populist” political movements all over Europe, is that people everywhere are fast losing trust in the establishment.
“Unlike national currencies, bitcoin does not depend on a regime that can be corrupted by politics,” continue McGinnis and Roche. “Money has been described as a social contract, but politicians charged with enforcing that contract often have incentives to advance their own interests or those of particular political factions at the expense of their legal duties.”
Bitcoin and other cryptocurrencies represent an alternative.
It’s no mystery that governments and central banks are warming up the potential of blockchain technology to make mainstream financial systems faster, cheaper and better. In fact, financial press headlines are packed with news of this or that official institution developing or piloting some form of “sanitized blockchain” able to offer the benefits of Bitcoin without troublesome crypto-anarchy aspects (privacy, anonymity and all that).
But the bankers and the bureaucrats are missing an important point: We-the-People are adopting crypto because we want to get away from the establishment in the first place. Cryptocurrencies controlled by the establishment won’t persuade us.
“National and international crises will continue to fuel bitcoin’s rise,” conclude McGinnis and Roche.
This is not limited to Bitcoin and blockchain technology (hence the more general “crypto” in the title. Many people are becoming persuaded that mainstream news are politically-motivated fake news, and look for alternatives. Similarly, more and more people assume that everything we read or say online is monitored by the bankers and the bureaucrats, and switch to Tor, VPNs and strongly encrypted communication channels.
Finally, we want to take the internet back from the greedy hands of the bankers and the bureaucrats, and build a new decentralized web that works like BitTorrent and Bitcoin. Fortunately, some promising decentralized web prototypes are in the works.
Picture from Pixabay.