Thread
#Bitcoin is often maligned as shady money, a Ponzi scheme, an energy waste, even as a threat to the US dollar.
Rarely discussed is how it can support U.S. strength by fostering renewable energy, help counter China, and drive innovation. Here's how:
www.realclearpolicy.com/articles/2022/02/01/bitcoin_supports_us_national_economic_strength_814605.htm...
Rarely discussed is how it can support U.S. strength by fostering renewable energy, help counter China, and drive innovation. Here's how:
www.realclearpolicy.com/articles/2022/02/01/bitcoin_supports_us_national_economic_strength_814605.htm...
Shortly after taking office, President Biden issued an Interim National Security Strategic Guidance that described a world at an “inflection point” and stressed the need for democracies to demonstrate they “can still deliver for our people.”
www.whitehouse.gov/wp-content/uploads/2021/03/NSC-1v2.pdf
www.whitehouse.gov/wp-content/uploads/2021/03/NSC-1v2.pdf
Bitcoin is emerging on the world economy at just this moment of inflection and, if properly understood, presents the United States in particular with an opportunity to — again in Biden’s words — “build back better our economic foundations.”
Synthesizing decades of research in cryptography, distributed systems, and peer-to-peer networking (often funded by the U.S. government), Bitcoin is a monetary innovation that offers everyday Americans and institutional investors a new way to transact and save for the future.
A key part of the network's security comes from the energy expended by "miners" using purpose-built computers.
Once dominant in mining due to it's overbuilt hydro coal and cheap coal, China banned the practice in June 2021.
Many of those miners packed up and came to the U.S.
Once dominant in mining due to it's overbuilt hydro coal and cheap coal, China banned the practice in June 2021.
Many of those miners packed up and came to the U.S.
Specific estimates are tricky, but the U.S. now has a plurality of global "hashpower".
Many of the largest bitcoin miners are now publicly listed in the U.S.
Intense competition is driving rapid innovation in hardware, financing, scale, and synergy w/renewables & the grid.
Many of the largest bitcoin miners are now publicly listed in the U.S.
Intense competition is driving rapid innovation in hardware, financing, scale, and synergy w/renewables & the grid.
This augurs a renaissance in the U.S. energy industry:
- Helping incentivize the capture of harmful flared methane,
- Improving ROI for renewable power (wind/solar/hydro/geothermal/nuclear), and
- Serving as a unique form of flexible load that helps stabilize our electric grids.
- Helping incentivize the capture of harmful flared methane,
- Improving ROI for renewable power (wind/solar/hydro/geothermal/nuclear), and
- Serving as a unique form of flexible load that helps stabilize our electric grids.
While it strengthens our energy system at home, #bitcoin is may also help challenge our adversaries abroad. China rightly views #bitcoin as a threat to its authoritarian system and capital controls, aiming to internationalize use of its Digital Currency Electronic Payment (DCEP).
Bitcoin (and USD-pegged stablecoins) present a severe complication for China’s DCEP ambitions, presenting an attractive store of wealth and effective cross-border payment system to those EM nations that China seeks to entangle in its economic and political sphere of influence.
China’s purchases of U.S. Treasuries peaked in 2013 as they redeployed their dollar reserves (from our trade deficit) into western real estate and equity markets and to finance its Belt and Road Initiative, a strategic effort to secure key trade infrastructure and resources.
China and Russia have formed a closer partnership, including direct bilateral trade that bypasses the dollar, increasingly denominated in yuan, ruble, and euros. Meanwhile, global demand for $-pegged stablecoins has exploded, especially by citizens of EM facing currency distress.
As stablecoins get more regulated, they may help maintain dollar dominance and compete against the eRMB. And if backed by cash-equivalent reserves, stablecoin growth increases demand for USTs, helping the Federal Reserve keep interest rates low in the face of inflation pressures.
There are likely now over 150 million bitcoin holders in the world, including over 47 million Americans.
Given that a large amount (potentially a majority) of Bitcoin is held by U.S. residents, we stand to disproportionately benefit from its monetization.
Given that a large amount (potentially a majority) of Bitcoin is held by U.S. residents, we stand to disproportionately benefit from its monetization.
Over 500 U.S. start-ups have raised over $6B in seed funding, building strong businesses, attracting talent, capital investment, and consumer demand.
Already boasting some of the biggest brands in the industry, our deep capital markets and rule of law make it safe to innovate.
Already boasting some of the biggest brands in the industry, our deep capital markets and rule of law make it safe to innovate.
America stands on its wealth, but stands for freedom.
At the heart of our national ethos is a professed commitment to essential human rights like individual liberty, freedom of speech, privacy, and democratic choice.
At the heart of our national ethos is a professed commitment to essential human rights like individual liberty, freedom of speech, privacy, and democratic choice.
These values, under threat by illiberal & authoritarian states, sit at the center of our interest in promoting liberal democracy and protecting civil societies around the world.
Anything that helps advance the cause of freedom thus helps advance this core national interest.
Anything that helps advance the cause of freedom thus helps advance this core national interest.
As the Human Rights Foundation calls it, Bitcoin is freedom money.
Bitcoin is a highly effective & practical tool being used now by refugees, by democracy activists, by those facing runaway inflation, and by the unbanked billions that don't share our financial privileges.
Bitcoin is a highly effective & practical tool being used now by refugees, by democracy activists, by those facing runaway inflation, and by the unbanked billions that don't share our financial privileges.
To the extent that U.S. national strength rests on our energy resilience, technology innovation, capital growth, and liberal values, #bitcoin gives us a clear advantage over our adversaries, for whom an open, global, borderless, and neutral monetary system is threat.
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