Blistering economic sanctions that threaten to ruin the ruble may leave Putin with little choice but to ally himself further with China and challenge the dollar head-on.
What is not pointed out (or very widely known) is that the BRICS (Brasil/Russia/India/China/South Africa) economies are ready to move away from SWIFT and onto the Chinese-created CIPS platform. This was agreed at the 2015 BRICS summit, and further moves made and agreed in September 2021 at BRISCS13.
These economies also 1) suffer from "dollar deficit" in trade with US and EU, and 2) have almost all global reserves of un-mined gold with which to back non-dollar central banks. This terrifies those who rely of the current inequities of the dollar system, and when the moves are made these will be the "1st world" economies, not the ones currently top of the pile.
Putin never feared Ukraine joining NATO. If you believe this garbage you believe anything. Putin is looking toward legacy building before he checks out. He thought Ukraine would roll over. I’m sure you believe Crimea was a threat too?
It's fashionable to crap on America because we don't trust our decaying institutions (and rightly so), but Russia and China are in far worse institutional shape. Anyone with boots-on-the-ground experience will tell you. While certain states are shedding population in the US, Russian emigration will continue and only accelerate. The divide between rich and poor there is horrendous. Their demographics are the worst by far. The deaths of despair have been catastrophic for decades (although we're catching up rapidly with 100k opiate deaths annually!). The propaganda painting Putin as some sort of savior of the country only functions on the backdrop of rightful criticism of US Imperialism and CIA abuses, which has been honed since Soviet times. They are not interested in building up alternative systems or strengthening the financial position of their countries. The elites have fled and continue to flee to the West. These arguments assume these leaders have some sort of grand motive beyond greed and realpolitik. Xi at least is an open Communist/Marxist, so maybe some of that is true. Which raises the question of why anyone would trust him with their money.
+ countries rich in natural resources NOT just gold by order (might find a reshuffled list, but the mix is the same)
1. China
2. Saudi Arabia
3. Canada
4. India
5. Russia
6. Brazil
7. US
8. Venezuela
9. Congo
10. Australia
Push comes to shove, US straightens up Canada. Now US has 1. largest gold and BTC reserves. and 2. sizable natural resource pool. US was recently world’s #1 energy exporter and COULD return to that position if need be. Russia has a GDP smaller than California and Texas. China makes stolen IP, terribly crafted products—proof in that, even as the world’s largest exporter, they’re a net importer of cars 😆.
This is true. As an example, all that whining about "rare earths" is a bunch of garbage. Yes China exports a ton of them, but we could also start producing as much as we would ever need from piles and piles of waste products. It's just not cost-effective BUT the biggest hurdle is the regulation on thorium byproduct processing. It's only mildly radioactive, but there's not much to do with it so regulations cost a lot to deal with thorium byproduct.
Not only that, as you pointed out to us in earlier articles, China has been under-reporting/hiding the amount of gold reserves it has. Why do you need to do that if you’re China? What benefit of hiding outweighs the economic bump/shore up from displaying it?
I did note that. I went back and re-read that article today. It's amazing what it looks like in the light of current events, versus what it looked like just months ago. We'll see. I hope I'm wrong.
To me it's pretty obvious that they want to keep the price down while they accumulate more and more Gold. They are looking long term compared to the west. Let's see how well they planned it.
China and Russia de dollarization is just an excuse for the Fed to create a digital based currency. The fix is in by the crazy leftists in our government. The excuse will be, "if they can do it why shouldn't we?
The outcome of this is very simple -- Bitcoin will become the world's reserve currency. There is no other international, permissionless, global, neutral money in existence. Therefore it is the only solution available to anybody in the world who wants to transact freely -- including Russia or any other Nation-State (despite the fact that Nation-States will be an barely understood relic of the past by the end of the century).
Bitcoin is the only good money that exists in the world. No other money makes sense. And it is the greatest technological development mankind has ever known.
Gold is a useless money technology. You cannot send it anywhere in the world 24/7 with the push of a button. You cannot travel with it across any international border. You always have to trust someone to store it for you. Governments lie about how much they have and end up producing more currency than they have backed up.
NOBODY WANTS TO USE A GOVERNMENT CURRENCY ANYMORE. Especially seeing as how Governments use their currency to control people (and other Governments) literally nobody in the planet Earth wants to use a Government currency. Nobody.
And because people can literally work from anywhere in the world that they feel like -- nobody wants to use a money that cannot be used anywhere in the world.
Well -- as I have said above -- ONLY ONE MONEY in all the world fixes this problem / addresses these needs. Bitcoin.
Therefore there is only one single outcome that could possibly conceivably occur -- everyone on Earth will default to Bitcoin and it will become the global reserve.
Not because some country decided so -- but because nobody wants to use a Nation's currency anymore.
It's outdated tech and everyone hates it.
You think anybody born after the year 1970 will ever use gold over Bitcoin?
Give me a break.
You think subsequent generations born into the digital age are even going to understand the concept of Governments controlling currency or paper notes backed by a hunk of metal?
The long arguments over Bitcoin being 'real money' continue to exist for a justifiable reason. Bitcoin is excellent and has its place. But it's just not the answer to everything.
Gold literally is money, and You'll always be wrong about gold until you put a few ounces of it in your hand.
I have more than a few ounces because it's fun to collect like...books...or old records.
But guess what I cannot do with my "gold money"..
* I cannot sent it anywhere in the world
* I cannot travel with it across any international border (or even in the United States as it will be grounds for confiscation just like large amounts of cash are).
* It's extremely easy to confiscate or steal
* It's supply is unknown
* It's extremely easy to manipulate (paper gold market for example)
The drawbacks are evident across the board. I cannot do ANYTHING with my gold.
Yet with my Bitcoin I can carry it anywhere in the world across any international border.
I can send it anywhere in the world, 24/7 with no third parties involved.
Nobody can ever find a new deposit of Bitcoin, nobody can ever "fake" more BTC on the market than exist...etc.
Bitcoin is a superior money across the board.
I am an international traveler -- I have gold in the USA, Thailand, and London vaults.
I cannot access my gold easily EVER. I cannot use it. I cannot travel with it. I cannot buy things with it.
It just sits in safes with trusted third parties. If shit hits the fan -- it'll be a miracle if I could even access it.
Yet with my Bitcoin I can easily escape anywhere in the world and access my wealth.
If Bitcoin solves all of these problems then how can anybody in their right mind look at this comparison and still conclude gold has any value as a money rather than just a jewelry or collectable at this point?
1) This is an old, tired argument that has been proven demonstrably false. First of all -- Bitcoin's blockchain has continued to adapt to growing demand perfectly in-line with the scale that's required. But that's actually neither here nor there -- because money has latyers.
For example -- take gold. Gold is a "Layer 1 Money Technology." It is incredibly expensive to store, ship, carry, and transact with in every day life. In other words, to use the same logic, you'd have to look at gold and say that it could "never scale to be an international money."
Except that Layer 2 technologies were built on top of gold to facilitate quick international transfers. For example -- bank notes and Government-provided currencies. The gold was stored in large vaults and the value of the gold exchanged hands and was even transferred over large distances, while large international settlements took much longer in the gold itself.
We're seeing the same thing with Bitcoin -- it's called the Lightning Network. Bitcoin stays on chain, while the Lightning Network facilitates international payments off-chain (settled later on chain in Bitcoin). These payments are faster than any current payment technology in existence today.
And the can be done for a fraction of a penny in fees per transaction. It is the greatest development in payment technology the world has ever seen.
For example, what most people don't understand is that when you swipe your Visa card -- that money isn't moving right away. It takes days or even weeks for the bank to settle all of those transfers.
Yet, those same international settlements could be done in Bitcoin far faster and far cheaper. I'm talking about settling BILLIONS upon BILLIONS of dollars worth of payments in about 10 minutes for about $10.
So you're missing the mark on this one. This argument has been thoroughly debunked and the only people that still use are the ones parroting talking points from people who don't understand monetary history or what's happening with Lightning Network and other layer 2 protocols.
2) Completely incorrect. By "any individual or entity" you mean a cooperative collaboration between ALL the world's Governments to singlehandedly orchestrate a 51% attack.
Possible? Yes. Probably? No. If you imagine that you can get the United States, Russia, China, India, Australia, all European countries, and all South American countries and all Middle Eastern countries to spend trillions upon trillions upon trillions of dollars to facilitate a 51% attack -- you're living in a fantasy world.
By all accounts -- the Bitcoin monetary network is the most secure monetary network that has ever existed in human history with no central point of failure.
So this argument is thoroughly debunked as well (and has been so for some time -- this argument really would only have been relevant around 2011 - 2013 when Bitcoin was still in its absolute infancy).
3) Oh no -- here we go again "VoLoTiLiTY" just stop. Bitcoin is not volatile -- the dollar is. It is the dollar measured against Bitcoin that is "volatile." Have you ever seen a chart of the gold prices denominated in Weimer Marks during the German hyperinflation period?
Oh wow!! Look how VOLATILE gold is! You could NEVER use THAT for an International money -- it's just all over the place!
Doesn't make much sense does it?
It's not gold that is volatile -- its the currency gold is denominated in.
The dollar is volatile -- and it's volatile in one direction -- DOWN. All you do is see Bitcoin appreciate in price over time.
If you denominated OTHER things IN Bitcoin -- then the volatility of Bitcoin literally goes away over night.
Because, unlike the dollar, the monetary policy of Bitcoin is not a mystery. The world does not wait upon baited breath for one man to emerge from his Ivory Tower several times a year and explain to the world how he is going to dictate the dollar's monetary polilcy over the next few weeks.
No -- there is no mystery regarding the monetary policy of Bitcoin. Everyone knows how much is currently in circulation, it's 100% transparent, everybody knows how many blocks will be produced and in what amount of time, everybody knows the total amount that will ever be released and so on.
With that kind of rock-hard certainty -- that is completely unquestionable -- there is no volatility when things are denominated in it.
4) Wrong again -- there are no "better blockchains." All other cryptos are essentially securities. They all pass the Howey Test. They are securities released to raise money for a project, which has a defined goal. They are all centralized. They all have headquarters. They all have development teams behind them.
That means none of them are decentralized, none of them are money, and none of them are secure.
Bitcoin is the only crypto in the world that does not pass the Howey Test, therefore it is not a security. There was no pre-mine. No single person released it to raise money for a specific purpose or project. The founder(s) are anonymous. There is no central headquarters.
Furthermore, it is the most widely decentralized blockchain in the world with the greatest network effect and the most nodes. Therefore it is the most secure.
The market has chosen Bitcoin -- and Bitcoin is the best money that mankind has ever known.
Also -- you now know there is no such thing as a "scalability problem" with Bitcoin.
I hope this shed some light on a lot of the stuff you're getting wrong.
All roads lead to Bitcoin. They lead nowhere else.
We've heard this argument about "centralized collection of miners" before -- namely that was the primary argument about China for the better part of half a decade. I constantly heard that Bitcoin wasn't "truly decentralized" because most of the miners were in China.
Well China banned all the miners and....nothing happened. The network automatically adjusted its difficulty settings as it is programmed to do, and the monetary network kept on operating exactly as it should.
Now -- as far as some big giant miner orchestrating a 51% attack.....why?
Okay so you're a miner right? You're spending all of this money on mining equipment to mine Bitcoin. You're spending absurd amounts of money on electricity. You NEED Bitcoin to go up over time to see a return on your profit.
But if you orchestrate some 51% attack and destroy the security of the network...then Bitcoin goes to zero.
You lose all your money, all your Bitcoin is worthless, and you spent upwards of tens of billions of dollars to orchestrate the attack....none of which you will get a return for.
So where even is your incentive as far as that is concerned?
The only group of people who would have an incentive to orchestrate a 51% attack would be Governments -- because they're not interested in getting a "return on investment" for the attack, they're interested in destroying a competing monetary system outside of their control. They don't care if the price of Bitcoin goes to zero in the process.
For any individual actors who are not Governments -- where is the incentive to driving the price of Bitcoin to zero and spending absurd amounts of time, money, and effort tot do so?
AS FAR AS BANNING:
You can't ban Bitcoin. It's literally impossible unless you propose to shut off your country's Internet.
Again -- look at Nigeria, a perfect case study.
Nigeria banned Bitcoin. It is illegal. The banks are prohibited from allowing customers to buy it. They also have the world's first (and ONLY) 100% rolled-out, fully operational CBDC.
Guess what? Nigeria is the second largest user of Bitcoin in the world outside of the United States.
Making it illegal did nothing. Because Nigerians simply use peer-to-peer anonymous networks to buy it.
I wanted to find out about this myself so I actually WENT to Nigeria (I'm a US citizen, but I have lived in Southeast Asia now for almost ten years).
Here's what I learned...
* The Government banned Bitcoin because they saw it as a competing currency system. They didn't realize that people mainly use Bitcoin -- not to spend -- but to preserve the value of their wealth. They'd rather spend the Government fiat and save in Bitcoin.
The ban had no affect on people's ability to buy, sell, or trade Bitcoin.
* Bitcoin is easier for Nigerians to get than dollars
* Bitcoin is the best way Nigerians can transact globally. Those who freelance outside of the country (online) get paid in Bitcoin. It's easier for them to be a "global citizen" and access global financial networks with Bitcoin than with dollars.
* Nobody uses the e-Naira (CBDC). In fact, I was laughed at several times for asking. The common response was "I forgot they even rolled that out -- this is the first I'm anybody's talked about it months."
In fact most of them don't even understand what the point of the e-Naira .
So of course it makes Governments obsolete. In 100 to 200 years it's going to fucking BLOW people's minds that a thing called a "Government" ever issued its own money and people were forced to use it.
That's going to sound absolutely bonkers.
So some Governments will try to stop it -- but they can't. First of all, they're too stupid and they cannot compete with the free market. Secondly, they're too slow and by the time they figure out their "attack plan" it'll be too late. Thirdly -- other countries will NOT ban it, which means that you can either just go to those countries (which creates competition) or use exchanges (peer-to-peer) in those countries.
As Game Theory plays out, it will become an economic disadvantage to be the only one of a few countries who have not legalized Bitcoin -- and trying to keep it illegal will lose you enormous public support.
This is literally out of Klaus Schwab's book "COVID-19: The Great Reset." Reading your post made me go 😳
Here's the relevant section, sub-titled, "The fate of the US dollar." On page 74:
"Are there any viable alternatives? The US remains a formidable global financial hegemon (the role of the dollar in international financial transactions is far greater, albeit less visible, than in international trade), but it is also true that many countries would like to challenge the dollar's global dominance. The Chinese renminbi (RMB) could be an option, but not until strict capital controls are eliminated and the RMB turns into a market-determined currency, which is unlikely to happen in the foreseeable future. …As for a global virtual currency, there is none in sight yet, but there are attempts to launch national digital currencies that may eventually dethrone the US dollar supremacy. The most significant one took place in China at the end of April 2020 with a test of national digital currency in four large cities. The country is years ahead of the rest of the world in developing a digital currency combined with powerful electronic payment platforms; this experiment clearly shows that there are monetary systems that are trying to become independent from US intermediaries while moving towards greater digitization."
Given how much Schwab and Jinping seem to be buddies, I would not put it past them. I think your sources and perspective help indicate there are some shady dealings occurring and Russia seems to be looped in. It's scary to think about.
Another EPIC blunder by leaders in the West, more damaging if not worse than their Covid policy blunders. These sanctions have more issues than National Geographic and need to be dialed back.
What a spot-on turn of events to what some of us have feared is an eventuality. Global warming might not be such a huge concern with what seems to be coming. Thanks for all the insights Chris.
I’m skeptical that China would go down this path with Russia. China’s owns >$1 trillion in US treasuries and who knows how much in other dollar denominated assets. Doesn’t this give them a massive stake in the USD’s reserve currency status?
Also, Russia is a glorified gas station with a smaller GDP than California. Their demographic outlook is horrendous and productive immigrants aren’t desperate to live in Russia either. So Russia has virtually nothing to offer China some additional leverage in negotiations with the US and Europe. I bet China would gleefully sell Putin down the river for lower trade tariffs.
My point is that I’m not sure Russia is nearly important enough to China to justify a massive joint effort to reconstruct global finance. The existing one has worked out splendidly for China so far.
What is not pointed out (or very widely known) is that the BRICS (Brasil/Russia/India/China/South Africa) economies are ready to move away from SWIFT and onto the Chinese-created CIPS platform. This was agreed at the 2015 BRICS summit, and further moves made and agreed in September 2021 at BRISCS13.
These economies also 1) suffer from "dollar deficit" in trade with US and EU, and 2) have almost all global reserves of un-mined gold with which to back non-dollar central banks. This terrifies those who rely of the current inequities of the dollar system, and when the moves are made these will be the "1st world" economies, not the ones currently top of the pile.
This piece gives, what I believe, to be the most accurate breakdown of why Russia is acting -- https://www.tabletmag.com/sections/news/articles/ukraines-deadly-gamble
Putin never feared Ukraine joining NATO. If you believe this garbage you believe anything. Putin is looking toward legacy building before he checks out. He thought Ukraine would roll over. I’m sure you believe Crimea was a threat too?
Crimea was central to Putin's naval strength.
It's fashionable to crap on America because we don't trust our decaying institutions (and rightly so), but Russia and China are in far worse institutional shape. Anyone with boots-on-the-ground experience will tell you. While certain states are shedding population in the US, Russian emigration will continue and only accelerate. The divide between rich and poor there is horrendous. Their demographics are the worst by far. The deaths of despair have been catastrophic for decades (although we're catching up rapidly with 100k opiate deaths annually!). The propaganda painting Putin as some sort of savior of the country only functions on the backdrop of rightful criticism of US Imperialism and CIA abuses, which has been honed since Soviet times. They are not interested in building up alternative systems or strengthening the financial position of their countries. The elites have fled and continue to flee to the West. These arguments assume these leaders have some sort of grand motive beyond greed and realpolitik. Xi at least is an open Communist/Marxist, so maybe some of that is true. Which raises the question of why anyone would trust him with their money.
+ countries rich in natural resources NOT just gold by order (might find a reshuffled list, but the mix is the same)
1. China
2. Saudi Arabia
3. Canada
4. India
5. Russia
6. Brazil
7. US
8. Venezuela
9. Congo
10. Australia
Push comes to shove, US straightens up Canada. Now US has 1. largest gold and BTC reserves. and 2. sizable natural resource pool. US was recently world’s #1 energy exporter and COULD return to that position if need be. Russia has a GDP smaller than California and Texas. China makes stolen IP, terribly crafted products—proof in that, even as the world’s largest exporter, they’re a net importer of cars 😆.
This is true. As an example, all that whining about "rare earths" is a bunch of garbage. Yes China exports a ton of them, but we could also start producing as much as we would ever need from piles and piles of waste products. It's just not cost-effective BUT the biggest hurdle is the regulation on thorium byproduct processing. It's only mildly radioactive, but there's not much to do with it so regulations cost a lot to deal with thorium byproduct.
This is why I pay the subscription fee. This article alone makes the annual fee worth it.
Will China want to seriously damage the ability of the USA to import goods made in China?
Not only that, as you pointed out to us in earlier articles, China has been under-reporting/hiding the amount of gold reserves it has. Why do you need to do that if you’re China? What benefit of hiding outweighs the economic bump/shore up from displaying it?
I did note that. I went back and re-read that article today. It's amazing what it looks like in the light of current events, versus what it looked like just months ago. We'll see. I hope I'm wrong.
You aren't wrong, but rather have understated how bad things will get.
To me it's pretty obvious that they want to keep the price down while they accumulate more and more Gold. They are looking long term compared to the west. Let's see how well they planned it.
Russia options wane? What have you been drinking? I want some of that too. Look for yourself. Civil war is coming to US.
China and Russia de dollarization is just an excuse for the Fed to create a digital based currency. The fix is in by the crazy leftists in our government. The excuse will be, "if they can do it why shouldn't we?
dozod-sa@yahoo.com saw your tweet for that free lifetime sub!
The outcome of this is very simple -- Bitcoin will become the world's reserve currency. There is no other international, permissionless, global, neutral money in existence. Therefore it is the only solution available to anybody in the world who wants to transact freely -- including Russia or any other Nation-State (despite the fact that Nation-States will be an barely understood relic of the past by the end of the century).
Bitcoin is the only good money that exists in the world. No other money makes sense. And it is the greatest technological development mankind has ever known.
Gold is a useless money technology. You cannot send it anywhere in the world 24/7 with the push of a button. You cannot travel with it across any international border. You always have to trust someone to store it for you. Governments lie about how much they have and end up producing more currency than they have backed up.
NOBODY WANTS TO USE A GOVERNMENT CURRENCY ANYMORE. Especially seeing as how Governments use their currency to control people (and other Governments) literally nobody in the planet Earth wants to use a Government currency. Nobody.
And because people can literally work from anywhere in the world that they feel like -- nobody wants to use a money that cannot be used anywhere in the world.
Well -- as I have said above -- ONLY ONE MONEY in all the world fixes this problem / addresses these needs. Bitcoin.
Therefore there is only one single outcome that could possibly conceivably occur -- everyone on Earth will default to Bitcoin and it will become the global reserve.
Not because some country decided so -- but because nobody wants to use a Nation's currency anymore.
It's outdated tech and everyone hates it.
You think anybody born after the year 1970 will ever use gold over Bitcoin?
Give me a break.
You think subsequent generations born into the digital age are even going to understand the concept of Governments controlling currency or paper notes backed by a hunk of metal?
No -- that concept is going to sound insane.
Buy Bitcoin. It's the only thing you have left.
The long arguments over Bitcoin being 'real money' continue to exist for a justifiable reason. Bitcoin is excellent and has its place. But it's just not the answer to everything.
Gold literally is money, and You'll always be wrong about gold until you put a few ounces of it in your hand.
I have more than a few ounces because it's fun to collect like...books...or old records.
But guess what I cannot do with my "gold money"..
* I cannot sent it anywhere in the world
* I cannot travel with it across any international border (or even in the United States as it will be grounds for confiscation just like large amounts of cash are).
* It's extremely easy to confiscate or steal
* It's supply is unknown
* It's extremely easy to manipulate (paper gold market for example)
The drawbacks are evident across the board. I cannot do ANYTHING with my gold.
Yet with my Bitcoin I can carry it anywhere in the world across any international border.
I can send it anywhere in the world, 24/7 with no third parties involved.
Nobody can ever find a new deposit of Bitcoin, nobody can ever "fake" more BTC on the market than exist...etc.
Bitcoin is a superior money across the board.
I am an international traveler -- I have gold in the USA, Thailand, and London vaults.
I cannot access my gold easily EVER. I cannot use it. I cannot travel with it. I cannot buy things with it.
It just sits in safes with trusted third parties. If shit hits the fan -- it'll be a miracle if I could even access it.
Yet with my Bitcoin I can easily escape anywhere in the world and access my wealth.
If Bitcoin solves all of these problems then how can anybody in their right mind look at this comparison and still conclude gold has any value as a money rather than just a jewelry or collectable at this point?
Allow me to explain what you're missing.
1) This is an old, tired argument that has been proven demonstrably false. First of all -- Bitcoin's blockchain has continued to adapt to growing demand perfectly in-line with the scale that's required. But that's actually neither here nor there -- because money has latyers.
For example -- take gold. Gold is a "Layer 1 Money Technology." It is incredibly expensive to store, ship, carry, and transact with in every day life. In other words, to use the same logic, you'd have to look at gold and say that it could "never scale to be an international money."
Except that Layer 2 technologies were built on top of gold to facilitate quick international transfers. For example -- bank notes and Government-provided currencies. The gold was stored in large vaults and the value of the gold exchanged hands and was even transferred over large distances, while large international settlements took much longer in the gold itself.
We're seeing the same thing with Bitcoin -- it's called the Lightning Network. Bitcoin stays on chain, while the Lightning Network facilitates international payments off-chain (settled later on chain in Bitcoin). These payments are faster than any current payment technology in existence today.
And the can be done for a fraction of a penny in fees per transaction. It is the greatest development in payment technology the world has ever seen.
For example, what most people don't understand is that when you swipe your Visa card -- that money isn't moving right away. It takes days or even weeks for the bank to settle all of those transfers.
Yet, those same international settlements could be done in Bitcoin far faster and far cheaper. I'm talking about settling BILLIONS upon BILLIONS of dollars worth of payments in about 10 minutes for about $10.
So you're missing the mark on this one. This argument has been thoroughly debunked and the only people that still use are the ones parroting talking points from people who don't understand monetary history or what's happening with Lightning Network and other layer 2 protocols.
2) Completely incorrect. By "any individual or entity" you mean a cooperative collaboration between ALL the world's Governments to singlehandedly orchestrate a 51% attack.
Possible? Yes. Probably? No. If you imagine that you can get the United States, Russia, China, India, Australia, all European countries, and all South American countries and all Middle Eastern countries to spend trillions upon trillions upon trillions of dollars to facilitate a 51% attack -- you're living in a fantasy world.
By all accounts -- the Bitcoin monetary network is the most secure monetary network that has ever existed in human history with no central point of failure.
So this argument is thoroughly debunked as well (and has been so for some time -- this argument really would only have been relevant around 2011 - 2013 when Bitcoin was still in its absolute infancy).
3) Oh no -- here we go again "VoLoTiLiTY" just stop. Bitcoin is not volatile -- the dollar is. It is the dollar measured against Bitcoin that is "volatile." Have you ever seen a chart of the gold prices denominated in Weimer Marks during the German hyperinflation period?
Here it is: https://www.reddit.com/r/Wallstreetsilver/comments/noy7da/volatility_of_gold_price_during_developing/
Oh wow!! Look how VOLATILE gold is! You could NEVER use THAT for an International money -- it's just all over the place!
Doesn't make much sense does it?
It's not gold that is volatile -- its the currency gold is denominated in.
The dollar is volatile -- and it's volatile in one direction -- DOWN. All you do is see Bitcoin appreciate in price over time.
If you denominated OTHER things IN Bitcoin -- then the volatility of Bitcoin literally goes away over night.
Because, unlike the dollar, the monetary policy of Bitcoin is not a mystery. The world does not wait upon baited breath for one man to emerge from his Ivory Tower several times a year and explain to the world how he is going to dictate the dollar's monetary polilcy over the next few weeks.
No -- there is no mystery regarding the monetary policy of Bitcoin. Everyone knows how much is currently in circulation, it's 100% transparent, everybody knows how many blocks will be produced and in what amount of time, everybody knows the total amount that will ever be released and so on.
With that kind of rock-hard certainty -- that is completely unquestionable -- there is no volatility when things are denominated in it.
4) Wrong again -- there are no "better blockchains." All other cryptos are essentially securities. They all pass the Howey Test. They are securities released to raise money for a project, which has a defined goal. They are all centralized. They all have headquarters. They all have development teams behind them.
That means none of them are decentralized, none of them are money, and none of them are secure.
Bitcoin is the only crypto in the world that does not pass the Howey Test, therefore it is not a security. There was no pre-mine. No single person released it to raise money for a specific purpose or project. The founder(s) are anonymous. There is no central headquarters.
Furthermore, it is the most widely decentralized blockchain in the world with the greatest network effect and the most nodes. Therefore it is the most secure.
The market has chosen Bitcoin -- and Bitcoin is the best money that mankind has ever known.
Also -- you now know there is no such thing as a "scalability problem" with Bitcoin.
I hope this shed some light on a lot of the stuff you're getting wrong.
All roads lead to Bitcoin. They lead nowhere else.
We've heard this argument about "centralized collection of miners" before -- namely that was the primary argument about China for the better part of half a decade. I constantly heard that Bitcoin wasn't "truly decentralized" because most of the miners were in China.
Well China banned all the miners and....nothing happened. The network automatically adjusted its difficulty settings as it is programmed to do, and the monetary network kept on operating exactly as it should.
Now -- as far as some big giant miner orchestrating a 51% attack.....why?
Okay so you're a miner right? You're spending all of this money on mining equipment to mine Bitcoin. You're spending absurd amounts of money on electricity. You NEED Bitcoin to go up over time to see a return on your profit.
But if you orchestrate some 51% attack and destroy the security of the network...then Bitcoin goes to zero.
You lose all your money, all your Bitcoin is worthless, and you spent upwards of tens of billions of dollars to orchestrate the attack....none of which you will get a return for.
So where even is your incentive as far as that is concerned?
The only group of people who would have an incentive to orchestrate a 51% attack would be Governments -- because they're not interested in getting a "return on investment" for the attack, they're interested in destroying a competing monetary system outside of their control. They don't care if the price of Bitcoin goes to zero in the process.
For any individual actors who are not Governments -- where is the incentive to driving the price of Bitcoin to zero and spending absurd amounts of time, money, and effort tot do so?
AS FAR AS BANNING:
You can't ban Bitcoin. It's literally impossible unless you propose to shut off your country's Internet.
Again -- look at Nigeria, a perfect case study.
Nigeria banned Bitcoin. It is illegal. The banks are prohibited from allowing customers to buy it. They also have the world's first (and ONLY) 100% rolled-out, fully operational CBDC.
Guess what? Nigeria is the second largest user of Bitcoin in the world outside of the United States.
Making it illegal did nothing. Because Nigerians simply use peer-to-peer anonymous networks to buy it.
I wanted to find out about this myself so I actually WENT to Nigeria (I'm a US citizen, but I have lived in Southeast Asia now for almost ten years).
Here's what I learned...
* The Government banned Bitcoin because they saw it as a competing currency system. They didn't realize that people mainly use Bitcoin -- not to spend -- but to preserve the value of their wealth. They'd rather spend the Government fiat and save in Bitcoin.
The ban had no affect on people's ability to buy, sell, or trade Bitcoin.
* Bitcoin is easier for Nigerians to get than dollars
* Bitcoin is the best way Nigerians can transact globally. Those who freelance outside of the country (online) get paid in Bitcoin. It's easier for them to be a "global citizen" and access global financial networks with Bitcoin than with dollars.
* Nobody uses the e-Naira (CBDC). In fact, I was laughed at several times for asking. The common response was "I forgot they even rolled that out -- this is the first I'm anybody's talked about it months."
In fact most of them don't even understand what the point of the e-Naira .
So of course it makes Governments obsolete. In 100 to 200 years it's going to fucking BLOW people's minds that a thing called a "Government" ever issued its own money and people were forced to use it.
That's going to sound absolutely bonkers.
So some Governments will try to stop it -- but they can't. First of all, they're too stupid and they cannot compete with the free market. Secondly, they're too slow and by the time they figure out their "attack plan" it'll be too late. Thirdly -- other countries will NOT ban it, which means that you can either just go to those countries (which creates competition) or use exchanges (peer-to-peer) in those countries.
As Game Theory plays out, it will become an economic disadvantage to be the only one of a few countries who have not legalized Bitcoin -- and trying to keep it illegal will lose you enormous public support.
You can't put this toothpaste back in the tube.
This is literally out of Klaus Schwab's book "COVID-19: The Great Reset." Reading your post made me go 😳
Here's the relevant section, sub-titled, "The fate of the US dollar." On page 74:
"Are there any viable alternatives? The US remains a formidable global financial hegemon (the role of the dollar in international financial transactions is far greater, albeit less visible, than in international trade), but it is also true that many countries would like to challenge the dollar's global dominance. The Chinese renminbi (RMB) could be an option, but not until strict capital controls are eliminated and the RMB turns into a market-determined currency, which is unlikely to happen in the foreseeable future. …As for a global virtual currency, there is none in sight yet, but there are attempts to launch national digital currencies that may eventually dethrone the US dollar supremacy. The most significant one took place in China at the end of April 2020 with a test of national digital currency in four large cities. The country is years ahead of the rest of the world in developing a digital currency combined with powerful electronic payment platforms; this experiment clearly shows that there are monetary systems that are trying to become independent from US intermediaries while moving towards greater digitization."
Given how much Schwab and Jinping seem to be buddies, I would not put it past them. I think your sources and perspective help indicate there are some shady dealings occurring and Russia seems to be looped in. It's scary to think about.
Another EPIC blunder by leaders in the West, more damaging if not worse than their Covid policy blunders. These sanctions have more issues than National Geographic and need to be dialed back.
What a spot-on turn of events to what some of us have feared is an eventuality. Global warming might not be such a huge concern with what seems to be coming. Thanks for all the insights Chris.
Most Sunday afternoons I read the blogs and the news and enter orders for the next week.
Was a bit surprised that they (whoever "they" is) have yet to list strike prices <$5.00 in RSX puts.
I’m skeptical that China would go down this path with Russia. China’s owns >$1 trillion in US treasuries and who knows how much in other dollar denominated assets. Doesn’t this give them a massive stake in the USD’s reserve currency status?
Also, Russia is a glorified gas station with a smaller GDP than California. Their demographic outlook is horrendous and productive immigrants aren’t desperate to live in Russia either. So Russia has virtually nothing to offer China some additional leverage in negotiations with the US and Europe. I bet China would gleefully sell Putin down the river for lower trade tariffs.
My point is that I’m not sure Russia is nearly important enough to China to justify a massive joint effort to reconstruct global finance. The existing one has worked out splendidly for China so far.