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TIME recently published a great column on Bitcoin.
In the piece, Alex Gladstein (Chief Strategy Officer at the Human Rights Foundation) lays out an argument for the importance of the decentralized digital currency when it comes to freedom for millions of people around the world. He articulates how Bitcoin can have a material impact for those living in Venezuela, China, Russia, Zimbabwe, and a number of other countries.
I highly recommend you read the entire article (Click here). Gladstein’s piece got me thinking about a number of nuances — here are the ones I’ve spent time on so far:
Bitcoin has enormous growth potential — The article states that ~1% of people (40 million or less) have used Bitcoin globally, yet more than 50% of the world’s population live under authoritarian regimes. This means 3.81 billion of the 3.85 billion people that are the ideal users of the digital currency haven’t adopted it yet. As more of them do, the network effects and virality of money should accelerate the adoption rate. It is almost overwhelming to think about how big Bitcoin could be.
Bitcoin is the first weapon of the people — Governments, particularly authoritarian ones, use central banks, monetary policy, and capital controls to keep populations in line. Previously, the citizens of a country could only create change by (1) voting a regime out of office or (2) protesting/revolting through any means necessary. Bitcoin provides a new, nonviolent option that becomes incredibly powerful for those citizens where democracy is nonexistent.
Decentralized software will be a standard defense tactic — Most future wars won’t be fought with bullets and bombs. Instead, disagreements between nations are likely to be fought in cyberspace. As more governments realize the defensibility of truly decentralized systems, it should be expected that they will begin to default to semi-decentralized or fully decentralized systems. For example, imagine the advantages gained by operating a decentralized power grid or communications network. Sometimes the best offense is a great defense.
The first government to embrace Bitcoin will win big — Governments, just like corporations, face the innovator’s dilemma. It would be nearly impossible to abandon a fiat currency in exchange for Bitcoin because the leaders of a country see too much benefit from the fiat currency to move away from it. With that said, the first country to fully cross over and accept Bitcoin as their national currency will have a meaningful head start on everyone else. Remember, there are only 21 million Bitcoin ever created and the capital investment required to obtain a material amount of the digital currency would be relatively small for a nation state.
Bitcoin is the most disruptive technology in our lifetime — The more time that passes, the greater the likelihood that Bitcoin could successfully achieve global reserve status. If this happens, the addressable market for the global money supply is over $80 trillion. Combine the large market opportunity with the potential for numerous governments to be brought to their knees and you have something so powerful that it is actually widely underestimated. Disruption is historically painful for the incumbents and there is no reason to believe Bitcoin would be any different.
It is easy for many of us in the Western world to get distracted with Bitcoin’s price movements. It is discussed daily in newspapers, magazines, blogs, and newscasts. We must not lose sight of the bigger picture though — the decentralized digital currency has the potential to stop authoritarian governments in their tracks, create a new world of financial freedom for billions of people, and ensure there are greater degrees of equality globally.
There are few times in history where a group of people can organize resources in a way that shakes the very foundation of governments, nations and geopolitics. This road won’t be easy, but it is definitely worth it.
If software is eating the world, Bitcoin is equalizing it.
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