Bitcoin, Currency for the Cancelled

If 2020 has taught us anything, it’s that institutions cannot be fully trusted and Western governments can be trusted to spend money they don’t have.

Back in February, the same institutions and officials who today complain about an insubordinate populace were advocating for us minions to do the exact opposite of what they’re advocating for today.

https://twitter.com/surgeon_general/status/1233725785283932160?lang=en

The Surgeon General wasn’t the only flip flopper. The mainstream media spent February making fun of those taking Covid precautions, only to later pivot to fearmongering about the risk of its spread. At minimum, this should result in some head scratching by the general public along with enhanced suspicion about present and future “Expert” edicts.

What is also worth noting is how uniformly Big Tech has aligned itself with so-called “Authoritative Sources.” Google is prioritizing information from the World Health Organization. Twitter has banned Covid “misinformation,” which is essentially information that contradicts what their designated “Experts” are saying.

https://twitter.com/TwitterSafety/status/1240418440982040579

But if our anointed “Experts” flip flopped, and tech platforms prioritized the spread of their “Expert” opinion over “non-expert” advice, then that means both Big Tech and the “Authoritative Sources” they relied on shielded the population from “truth” back when the truth as they see it today would have been classified as misinformation.

Now imagine if there were controversy over a truth that took much longer to gain authoritative acceptance. Take being gay, which was considered by “Authoritative Sources” to be a mental disorder until 1973. Would that content be allowed by Big Tech if their “Authoritative Sources” hadn’t changed their position? It probably would, unless its message were threatening to the Big Tech bottom line.

Now imagine controversial content that does actually pose a threat to the Big Tech business model. Content relating to costs or externalities of the free movement of labor, issuance of H1B visas, antitrust law, or the words of politicians who may be seen as financial obstacles. Does Big Tech want this content to get out? Probably not. And if their desires happen to align with “Expert opinion” then they have the cover they need to remove this content from their platforms under the guise of “protecting their communities.”

And the cancelation doesn’t end with social media. It continues to financial service providers like PayPal. And don’t for one second think that the cancellations will stop with Alex Jones. Why? Because “hate speech,” the premise for his ban, has no static definition. “Hate speech” will conveniently encapsulate speech that poses the biggest threat to those in power, and you can watch over the next few years how the definition of what constitutes “hate speech” grows to absorb content that is presently considered plausible but inconveniently inhibits Big Tech profits.

Now just because this speech may be banned by our mainstream power brokers, does not mean the general public will have no interest in its consumption. However, because the general public will face challenges accessing or paying for this content using traditional financial mechanisms, alternative payment mechanisms will arise and gain popularity.

Enter Bitcoin. Now at the time of my writing, its price is near its all-time high. And no, it isn’t because its buyers are hoarding up magic internet money to hedge the possibility of an InfoWars or 4Chan ban.

But also realize, as the currency becomes more widely sought after and adopted, it or other alternatives will be used to service industries that traditional finance has shunned or will shun in the near future, which one can cynically project to be solutions to or explanations for problems that challenge the power or profitability of those presently in power.

So if cancellation currency is mainly a future use case for Bitcoin, what’s been driving its meteoric rise in 2020?

Certainly institutional adoption has been a contributor, and as institutional contribution grows, it may actually weaken my previous forecast of Bitcoin being a viable “currency of the cancelled.”

But what’s driving greater institutional adoption now? Well, just a couple months following the Coronovirus outbreak, the Fed & US Government were keen to commit over $6 trillion to stemming the economic impact of Coronavirus, basically matching the entire War on Terror budget or roughly equaling 3 Iraq Wars.

You might wonder where this $6 trillion will come from, and the likely answer is from a computer in New York. The Fed will print more money that will be used to subsidize the purchase of US government debt by acting as a buyer of last resort for US treasury bonds and realistically the corporate bond market as well.

Additionally, as economies face a second round of lockdowns, governments will face a second round of tax base shrinkages. Reduced income for the people means limited revenue for many corporations, states and local governments. Covid is the perfect excuse they can use to beg for money without ever having to fess up to prolific historical fiscal mismanagement.

Every crisis will be used by those in power to increase the permanence of their power, and fiat currency enables this far more easily than a currency with limited supply. After all, we no longer need to mine 100,000 tonnes of gold (12x our stated supply) to create $6 trillion — the Fed can do it with a single key stroke. And because we are seeing that it’s infinitely easier to create a dollar than a Bitcoin, it’s easy to see a future where the value of Bitcoin increases to protect holders against the increase in supply of US dollars that will be used to secure the power of special interests whose lobbying power massively exceeds their contribution to society.

Bitcoin is a hedge against institutional incompetence. And as this incompetence becomes more widely acknowledged, dinosaur institutions will seek to aggressively disintermediate those who shed light on it. I expect this to create a flywheel effect supporting demand for the cryptocurrency in the future as the world as we know it becomes crazier and more detached from the reality we grew up with.