War on Bitcoin

Bitcoin is not yet in the mainstream media on a daily or weekly basis, but it is growing in worldwide awareness, technological development/infrastructure, and integration. As Bitcoin grows it will begin to challenge the modern monetary system. If you thought that the Internet was disruptive, just wait until Bitcoin takes off its gloves.

For a quick refresher on Bitcoin, visit my post “What is Bitcoin and How Does It Work?

The current monetary system is a government/private fiat enterprise that is largely regulated and manipulated to fulfil the interests of large corporations and big governments. That sounds very conspiracy-theory-ish, I know. Consider the fact that the Federal Reserve prints all USD fiat money, and it is a PRIVATE company, NOT controlled by the government. However, the US government can heavily influence it.

Fiat money printing and issuance (especially with debt created by large banks) gives power and influence to the issuers and entities publishing interest rates. Money printing (inflation), debt issuance, and interest rate setting all highly influence the world economy. Government officials have been known to manipulate these factors to make things appear rosier than they are, in order to get reelected.

Enter Bitcoin – sovereign Internet money that no one can control, with an algorithmic monetary policy known to all. A bearer asset that cannot be seized and can be used to transact anywhere in the world. A deflationary currency that will hold its value against the USD and any other fiat.

Fiat currencies have always been under the control of the government and used as a method of control. Bitcoin represents a way of removing this control from the government. This is going to ruffle some feathers. Politicians and corporations will not idly sit by as Bitcoin gives financial independence back to the people, diminishing their own grips on their citizens and customers.

We will see a war on Bitcoin over the next few years. Regarding the war on Bitcoin timeline, for years many bitcoin enthusiasts have used the expression:

First, they ignore you, then they laugh at you, then they fight you, then you win.

This is a general guideline as to the phases of the war against Bitcoin that is being waged worldwide. The phrase has been adapted with a Bitcoin theme…

The War On Bitcoin

  1. First They Ignore Bitcoin (Denial Phase)
  2. Then They Laugh at Bitcoin
  3. Then They Fight Bitcoin
  4. Then Bitcoin Wins

We are currently at step three – governments and banks are fighting Bitcoin. They do not want to lose control of the money supply and the power/influence that comes with that control.

First They Ignore Bitcoin (Denial Phase)

Bitcoin can’t possibly work, its not real money, it doesn’t really exist, it has no value, it will never survive.

Then Bitcoin was used to buy a pizza in 2010. One of, if not the first Bitcoin transaction. Approximately $30 worth of pizza was paid for with 10,000 Bitcoin, putting Bitcoin’s price at ~ $0.003 (a third of one cent).

One Bitcoin has any sort of monetary value we pretty much left this phase, especially once Bitcoin hit $1 USD/BTC.

Then They Laugh At Bitcoin

Bitcoin initially was an Internet Nerds’ money. Not real, of very little value and highly technical/difficult to use.

Banks, companies, governments and many people dismissed Bitcoin as silly play internet money. Particularly when Bitcoin’s price exploded from less than a dollar up to $30/BTC, and came crashing back down to $2/BTC, back before 2013.

… that phase did not last long.

Then They Fight Bitcoin

Governments aren’t very tolerant of competition

Rep. Ron Paul

Bitcoin has appreciated over 84,000% against the USD over the last 7 years. It is not unreasonable to presume that various national governments will aim to protect their national money. They might do this by taxing Bitcoin heavily, implementing restrictive regulations, or banning Bitcoin outright.

I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated crypto assets can facilitate unlawful behaviour, including drug trade and other illegal activity…

Donald Trump, President of the United States.

President Trump’s simple acknowledgement of Bitcoin was an admission of its challenge to the USD financial power and influence on the world stage.

Furthermore, Mr. Trump’s tweet regarding Bitcoin will bring the topic of Bitcoin in front of his millions of Twitter followers, mainstream media outlets and national news stations. Despite the negative light he poses Bitcoin under, it still will get a number of people (influential and not) investigating the cryptocurrency industry and likely get them involved.

We can see nations around the world trying to compete against Bitcoin. India has mentioned the idea of having their own national fiat cryptocurrency, as has the Chinese government, the Russian government and the Venezuelan government. We know that the IMF has discussed the possibility of central bank-backed stable coins, and some articles have even coined the term “fedcoin” – an idea for a US Federal Reserve stable coin that would replace the USD.

One common easily falsified rhetoric against Bitcoin that many bankers, regulators and politicians will use is that Bitcoin is used by criminals, terrorists and money launderers. However, we now know very well that Bitcoin is a terrible idea for criminals, terrorists and money launderers to use as it is completely trackable once you leave one bread crumb of identity linked to your BTC address. So that argument is invalid.

In fact, the US Dollar is the most commonly used currency to commit crime and fund terrorism.

Then Bitcoin Wins

Bitcoin is being used in many countries around the world by the citizenry as well as the government. In countries where there is currency pressure or a poor economy that cannot support a strong government-backed fiat, or in countries with political unrest, Bitcoin and Bitcoin bonds can and do solve currency solutions and asset shielding (i.e. Afghanistan, Uzbekistan, Tunisia and Argentina).

Moreover, countries such as Russian, Iran, Iraq, Egypt, and Venezuela, use Bitcoin to circumvent American economic sanctions. Since those nations have restrictions on USD use, and gold is cumbersome to move (or even locked up and stored in a western nation’s vaults), these countries resort to Bitcoin.

I’ve heard arguments that these are bad use cases for Bitcoin. That it only shows that Bitcoin is “a little better than the worst currencies”. I completely disagree. There are hundreds of millions, likely billions of people in aggregate who these sanctions effect and who’s currencies are being destroyed. Bitcoin is the escape route, the road to financial sovereignty.

Bitcoin is beginning its take over with smaller national currencies and coming to the rescue to those who need it most initially. Then it will grow in its network effect out of those countries, making it stronger, and able to compete with the Euro, Great British Pound, USD etc.

The world that Satoshi Nakamoto, author of the Bitcoin whitepaper envisioned, and others are building is an unstoppable force… Governments cannot stop this innovation (Bitcoin) and those that have tried have already failed.

Mr McHenry (US Congressman)

While the above quote was made in US congress in the summer of 2019, it is not an admission of defeat nor do I claim that Bitcoin has won its war. The War on Bitcoin is just beginning.

Markshire Crypto Conclusion On The War On Bitcoin

Bitcoin’s global neutrality and growing value network effect will inevitably lead toward its victory over steadily devaluing fiat currencies.

Bitcoin was initially ignored, but not for long. Then it was laughed at for a number of years, and to be honest, there are still people laughing at it. But many governments, banks and big institutions are now realizing the real threat that Bitcoin poses to their dominance and are trying to fight Bitcoin.

These phases are not hard-lined with defined borders. There is a lot of overlap. As I just said, there are many people, banks and governments who are still laughing at Bitcoin, to their own peril. Although, most now seem to be fighting Bitcoin.

Bitcoin will win one battle at a time and it will prove itself over and over and over again to be a trusted network that holds value that can be easily transferred censorship-free. Bitcoin is already winning in more unstable countries such as Venezuela, Egypt, Afghanistan, Uzbekistan, etc. Then it will win in more moderately advanced nations and eventually in the Western world as well.

Please feel free to drop a comment, question, or note for me. I love hearing from my readers

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Author: Markshire Crypto

Millennial cryptocurrency investor, researcher, and writer. Medical professional, avid reader, proud nerd, and intellectual. Founder of Markshire Crypto. Mark has been into cryptocurrency since 2017, following the industry daily and creating content.

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