{"id":26630,"date":"2021-04-21T09:22:50","date_gmt":"2021-04-21T13:22:50","guid":{"rendered":"https:\/\/www.megalextoria.com\/wordpress\/?p=26630"},"modified":"2021-04-21T09:25:18","modified_gmt":"2021-04-21T13:25:18","slug":"the-conservative-case-for-cryptocurrency","status":"publish","type":"post","link":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/2021\/04\/21\/the-conservative-case-for-cryptocurrency\/","title":{"rendered":"The Conservative Case for Cryptocurrency"},"content":{"rendered":"<p><a href=\"https:\/\/www.megalextoria.com\/wordpress\/wp-content\/uploads\/2021\/04\/bitcoin_conservative_thomas-jefferson.jpeg\" class=\"keychainify-checked\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.megalextoria.com\/wordpress\/wp-content\/uploads\/2021\/04\/bitcoin_conservative_thomas-jefferson-1024x538.jpeg\" alt=\"\" width=\"802\" height=\"421\" class=\"aligncenter size-large wp-image-26633\" srcset=\"https:\/\/www.megalextoria.com\/wordpress\/wp-content\/uploads\/2021\/04\/bitcoin_conservative_thomas-jefferson-1024x538.jpeg 1024w, https:\/\/www.megalextoria.com\/wordpress\/wp-content\/uploads\/2021\/04\/bitcoin_conservative_thomas-jefferson-300x158.jpeg 300w, https:\/\/www.megalextoria.com\/wordpress\/wp-content\/uploads\/2021\/04\/bitcoin_conservative_thomas-jefferson-768x403.jpeg 768w, https:\/\/www.megalextoria.com\/wordpress\/wp-content\/uploads\/2021\/04\/bitcoin_conservative_thomas-jefferson-229x120.jpeg 229w, https:\/\/www.megalextoria.com\/wordpress\/wp-content\/uploads\/2021\/04\/bitcoin_conservative_thomas-jefferson.jpeg 1200w\" sizes=\"auto, (max-width: 802px) 100vw, 802px\" \/><\/a><\/p>\n<p>If you listen to defenders of the US dollar, you might get the idea that cryptocurrencies are only good for funding terrorism and hard drugs. And when you consider that cryptocurrencies represent a pretty clear break with tradition, a conservative might be inclined to stick with what\u2019s familiar.<\/p>\n<p>That\u2019s understandable. One of conservatism\u2019s hallmarks is skepticism of change that happens too quickly or threatens well-established institutions. In this way, many conservatives think the US dollar is good enough: <em>If it ain\u2019t broke, don\u2019t fix it.<\/em><\/p>\n<p>But I want to make the case that the dollar is broken. Indeed, I want to persuade you that adopting cryptocurrency is an act of patriotism.<\/p>\n<h2 id=\"link-0\">Yellen\u2019 at Bitcoin<\/h2>\n<p>\u201cTo the extent it is used,\u201d <a rel=\"nofollow\" href=\"https:\/\/www.cnbc.com\/2021\/02\/22\/yellen-sounds-warning-about-extremely-inefficient-bitcoin.html\" class=\"keychainify-checked steem-keychain-checked\">said<\/a> Treasury Secretary Janet Yellen of bitcoin, \u201cI fear it\u2019s often for illicit finance.\u201d<\/p>\n<p>We can expect more of this kind of rhetoric from those who see cryptocurrencies as a threat to the dollar\u2019s hegemony. This sort of rhetoric almost always precedes regulatory zeal. In this case, regulation would be designed to keep people locked in the dollar\u2019s matrix. Otherwise, how will authorities make the people clean up their messes?<\/p>\n<p>Remember, politicians created the money for the recent $1.9 trillion \u201cstimulus\u201d package out of thin air. This sent US debt to GDP <a rel=\"nofollow\" href=\"https:\/\/tradingeconomics.com\/united-states\/government-debt-to-gdp\" class=\"keychainify-checked steem-keychain-checked\">well past 100 percent<\/a>. To pay off this debt, the choices are taxation or inflation.<\/p>\n<p>But <em>nevermind the debt.<\/em> Yellen wants you to look over there, instead.<\/p>\n<p>Bitcoin is \u201cextremely inefficient\u201d as a transaction medium, she says, as if bitcoin were the only cryptocurrency, and the US Treasury and Mastercard are one and the same. She neglects to compare bitcoin transmission to shipping stacks of dollar bills, which also happens to be a method preferred by terrorists and drug dealers. Yellen certainly doesn\u2019t want to talk about bitcoin\u2019s utility as an investment vehicle\u2014particularly as a hedge against inflation.<\/p>\n<p>Fealty to the dollar is fealty to her appointers.<\/p>\n<h2 id=\"link-1\"><strong>Centralization Means Inflation<\/strong><\/h2>\n<p>\u201cAs measured by the Consumer Price Index,\u201d says monetary economist Lawrence H. White in an interview, \u201ctoday\u2019s $1 buys no more than what 3.7 cents bought in 1913. The dollar has lost 96.3 percent of its purchasing power.\u201d<\/p>\n<p>In 2021, some estimates have prices rising by 2.5 percent, but inflation doesn\u2019t just show up in almond milk and toothpaste. Asset prices seem to be in <a rel=\"nofollow\" href=\"https:\/\/www.reuters.com\/article\/us-global-stocks-bubbles\/toppy-stock-markets-spark-more-bubble-chatter-idUSKBN2AJ1IL\" class=\"keychainify-checked steem-keychain-checked\">bubble territory<\/a>, as well.<\/p>\n<p>Despite its volatility, bitcoin hasn\u2019t lost value. Yet throughout its eleven years of existence, skeptics have argued that the world\u2019s first cryptocurrency is just a fad or worse, a <a rel=\"nofollow\" href=\"https:\/\/cointelegraph.com\/news\/is-bitcoin-a-ponzi-scheme-pick-your-side-in-the-latest-cointelegraph-crypto-duel\" class=\"keychainify-checked steem-keychain-checked\">Ponzi scheme<\/a>. Others claim bitcoin has no \u2018intrinsic value.\u2019 Fed Chairman Jerome Powell, without a hint of irony, recently said of cryptocurrencies that \u201c<a rel=\"nofollow\" href=\"https:\/\/www.cnbc.com\/2021\/03\/22\/cryptocurrencies-are-not-useful-stores-of-value-says-feds-powell.html\" class=\"keychainify-checked steem-keychain-checked\">they\u2019re not backed by anything<\/a>.\u201d<\/p>\n<p>Trouble is, nothing has intrinsic value. <a rel=\"nofollow\" href=\"https:\/\/fee.org\/articles\/subjective-value\/\" class=\"keychainify-checked steem-keychain-checked\" data-toggle=\"popover\">Value is subjective<\/a>. Even if we agree that people <em>tend<\/em> to value gold or silver, which might justify staying with a gold-backed dollar, the dollar hasn\u2019t been on a gold standard since 1933. Anyone waiting for the dollar to return to a gold standard will be waiting a long time. That includes Jerome Powell.<\/p>\n<p>\u201cOur monetary system today is too centralized and too political,\u201d says Lawrence H. White. \u201cThe supply of money depends on a single committee of political appointees at the Fed. They have no crystal ball and are subject to fads in macroeconomic thinking.\u201d<\/p>\n<p>White thinks we\u2019d be better off with a private monetary system similar to that envisioned by <a rel=\"nofollow\" href=\"https:\/\/nakamotoinstitute.org\/static\/docs\/denationalisation.pdf\" class=\"keychainify-checked steem-keychain-checked\">F. A. Hayek<\/a>. He adds: \u201cA better alternative is a decentralized commodity standard with competition among private money issuers.\u201d<\/p>\n<h2 id=\"link-2\">What Slinks at the Bottom of the Red Ink Ocean<\/h2>\n<p>Progressives created the Federal Reserve in 1913, purportedly to stabilize the financial system. Whether the mandarins achieved that stability is arguable, they succeeded in concentrating on outsized financial power in Washington and New York. The Federal Reserve is thus tangled in an unholy relationship with the federal government. That fact enables political authorities to <a rel=\"nofollow\" href=\"https:\/\/fred.stlouisfed.org\/series\/GFDEGDQ188S\" class=\"keychainify-checked steem-keychain-checked\">spend beyond their means<\/a> and tax people surreptitiously through inflation.<\/p>\n<p>So, when I say the dollar is broken, I mean both the federal government and the Federal Reserve systems are broken. In <a rel=\"nofollow\" href=\"https:\/\/www.amazon.com\/After-Collapse-America-Rebirth-Ideals\/dp\/1732039410\/ref=tmm_pap_swatch_0?_encoding=UTF8&amp;qid=1612456216&amp;sr=1-1\" class=\"keychainify-checked steem-keychain-checked\">my latest book<\/a>, I thus argue that the United States is headed for collapse.<\/p>\n<p style=\"text-align: center;\"><iframe style=\"width: 120px; height: 240px;\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\" frameborder=\"0\" src=\"\/\/ws-na.amazon-adsystem.com\/widgets\/q?ServiceVersion=20070822&amp;OneJS=1&amp;Operation=GetAdHtml&amp;MarketPlace=US&amp;source=ss&amp;ref=as_ss_li_til&amp;ad_type=product_link&amp;tracking_id=feeonline-20&amp;language=en_US&amp;marketplace=amazon&amp;region=US&amp;placement=1732039410&amp;asins=1732039410&amp;linkId=f233fa7f348cd0f711fa5fc0f54eaf38&amp;show_border=true&amp;link_opens_in_new_window=true\"><\/iframe><\/p>\n<div style=\"clear: both;\">\n<div id=\"om-fqmeg7lcejd7fy5oro5r-holder\">\n<\/div>\n<div id=\"om-lxkcubhhqwmdm0lkjkbp-holder\">\n<\/div>\n<\/div>\n<p><em>Ah, but surely we shouldn\u2019t underestimate the resilience of the mighty US economy. Can\u2019t we grow our way out of the <\/em><em><a rel=\"nofollow\" href=\"https:\/\/fee.org\/articles\/trillions-in-debt-and-were-just-scratching-the-surface\/\" class=\"keychainify-checked steem-keychain-checked\" data-toggle=\"popover\">US debt and unfunded liabilities<\/a><\/em><em>?<br \/>\n<\/em><\/p>\n<p>Here\u2019s Lawrence White for an encore:<\/p>\n<blockquote>\n<p style=\"padding-left: 18.75px;\">Even if Congress were to balance the federal budget, which it won\u2019t, it would take decades for economic growth to bring the debt\/GDP ratio (currently 130 percent of GDP) down to where it was 20 years ago (54 percent of GDP). It\u2019s mathematically impossible to grow our way out of the national debt when federal budget deficits are so large on average as to make the stock of debt grow faster than the real economy.<\/p>\n<\/blockquote>\n<p>Unlike central banks, private issuers can\u2019t afford to get things wrong. And this is precisely the insight understood by the creators of cryptocurrencies. All of them are competing to provide the properties people want to see in 21st century assets.<\/p>\n<h2 id=\"link-3\">Programmable Properties<\/h2>\n<p>The dollar\u2019s defenders tend to pick on bitcoin, say, for its volatility. But myriad alternatives offer different properties, many of which have pre-programmed price stability. Some have higher transaction speeds, including <a rel=\"nofollow\" href=\"https:\/\/www.investopedia.com\/tech\/history-bitcoin-hard-forks\/\" class=\"keychainify-checked steem-keychain-checked\">hard forks<\/a> of bitcoin. Consider, for example, the average transactions per second (tps) for each:<\/p>\n<ul>\n<li>Bitcoin (<a rel=\"nofollow\" href=\"https:\/\/alephzero.org\/blog\/what-is-the-fastest-blockchain-and-why-analysis-of-43-blockchains\/\" class=\"keychainify-checked steem-keychain-checked\">BTC<\/a>) &#8211; 7 tps<\/li>\n<li>Bitcoin Cash (<a rel=\"nofollow\" href=\"https:\/\/alephzero.org\/blog\/what-is-the-fastest-blockchain-and-why-analysis-of-43-blockchains\/\" class=\"keychainify-checked steem-keychain-checked\">BCH<\/a>) &#8211; 300 tps<\/li>\n<li>Bitcoin SV (<a rel=\"nofollow\" href=\"https:\/\/alephzero.org\/blog\/what-is-the-fastest-blockchain-and-why-analysis-of-43-blockchains\/\" class=\"keychainify-checked steem-keychain-checked\">BSV<\/a>) &#8211; 224 tps<\/li>\n<\/ul>\n<p>All of these options have sprung up in the last four years. Imagine if you could fork the US dollar and give users the choice of a gold-backed version. A lot of people would quite happily choose that forked dollar. Alas, no such option is available. So we criticize by creating.<\/p>\n<p>None of the versions of bitcoin are themselves a static system. Instead, each evolves and improves. If higher transaction speeds were all anyone was looking for in a property, one might choose <a rel=\"nofollow\" href=\"https:\/\/alephzero.org\/blog\/what-is-the-fastest-blockchain-and-why-analysis-of-43-blockchains\/\" class=\"keychainify-checked steem-keychain-checked\">other blockchains<\/a>. But a lot of people are happy with \u201c<a rel=\"nofollow\" href=\"https:\/\/bitcoinmagazine.com\/culture\/genesis-files-bit-gold-szabo-was-inches-away-inventing-bitcoin\" class=\"keychainify-checked steem-keychain-checked\">digital gold<\/a>,\u201d at least for now.<\/p>\n<p>The thing about cryptocurrencies is this: Nearly any property is programmable. People want myriad features in their tokens, though sometimes these properties require tradeoffs one against another. Yet these decentralized systems are continuously improving. Here are some of their key features:<\/p>\n<ul>\n<li>Sovereign and permissionless<\/li>\n<li>Anonymous<\/li>\n<li>Secure<\/li>\n<li>Medium of exchange<\/li>\n<li>Transaction speed<\/li>\n<li>Deflationary<\/li>\n<li>Stable<\/li>\n<li>Low transaction fees<\/li>\n<li>Store of value<\/li>\n<li>Liquid<\/li>\n<li>Smart contracts<\/li>\n<li>Tokenization<\/li>\n<\/ul>\n<p>With each passing day, programmers are developing new properties. That means each offers people more of exactly what they\u2019re looking for in an asset. In this way, the systems <em>themselves<\/em> have instrumental value, depending on what properties you want and the emergent network effects they give rise to. The dollar has legacy network effects, to be sure. Still, it is tied to the capricious nature of politics\u2014a fact which America\u2019s Founders would surely have despised.<\/p>\n<h2 id=\"link-4\">Jeffersonian Patriotism<\/h2>\n<p>Thomas Jefferson didn\u2019t want a central bank. And in an 1803 letter to Albert Gallatin, he wrote:<\/p>\n<blockquote>\n<p style=\"padding-left: 15px;\">The Bank of the United States is one of the most deadly hostilities existing, against the principles and form of our Constitution. An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government.<\/p>\n<\/blockquote>\n<p>Jefferson tried to warn us, and yet his worries turned out to be only half the story. The government and the central bank are mutually corruptive.<\/p>\n<p>Jefferson would have been happy to water the tree of liberty with a bleeding US dollar. I bet he would have cheered the rise of cryptocurrencies, even if only because they represent a popular revolt against political elites in collusion with central bankers.<\/p>\n<p>So, is cryptocurrency for conservatives?<\/p>\n<p>Patriotism should never be confused with nostalgia. While some conservatives might be willing to settle for a system that props up the political class and their profligacy, most understand Russell Kirk\u2019s <a rel=\"nofollow\" href=\"https:\/\/kirkcenter.org\/conservatism\/ten-conservative-principles\/\" class=\"keychainify-checked steem-keychain-checked\">Seventh Law of Conservatism<\/a>, which says that freedom and property are linked:<\/p>\n<p>\u201cSeparate property from private possession, and Leviathan becomes master of all,\u201d Kirk wrote. \u201cUpon the foundation of private property, great civilizations are built. The more widespread is the possession of private property, the more stable and productive is a commonwealth.\u201d<\/p>\n<p>Cryptocurrencies are designed to create financial sovereignty for everyone. If conservatives continue to stay locked in the dollar\u2019s matrix, they will be playing into the hands and plans of people they most oppose.<\/p>\n<p>&#8211;<\/p>\n<p>Max Borders is author of <em><a rel=\"nofollow\" href=\"https:\/\/www.amazon.com\/After-Collapse-America-Rebirth-Ideals\/dp\/1732039410\/ref=tmm_pap_swatch_0?_encoding=UTF8&amp;qid=1612456216&amp;sr=1-1\" class=\"keychainify-checked steem-keychain-checked\">After Collapse: The Death of America and the Rebirth of Her Ideals<\/a><\/em><em>. <\/em>Support his work with cryptocurrency <a href=\"https:\/\/social-evolution.com\/\" class=\"keychainify-checked steem-keychain-checked\">here<\/a>.<\/p>\n<div>\n<h5><a href=\"http:\/\/fee.org\/people\/max-borders\/\" class=\"keychainify-checked steem-keychain-checked\"><br \/>\nMax Borders<br \/>\n<\/a><\/h5>\n<p class=\"brief-bio\">\n<p><span>Max Borders is author of&nbsp;<em><a rel=\"noopener\" href=\"https:\/\/www.amazon.com\/Social-Singularity-decentralization-prosperity-apocalypse\/dp\/1732039402\/ref=tmm_pap_title_0?_encoding=UTF8&amp;qid=&amp;sr=\" target=\"_blank\" data-saferedirecturl=\"https:\/\/www.google.com\/url?q=https:\/\/www.amazon.com\/Social-Singularity-decentralization-prosperity-apocalypse\/dp\/1732039402\/ref%3Dtmm_pap_title_0?_encoding%3DUTF8%26qid%3D%26sr%3D&amp;source=gmail&amp;ust=1529501320688000&amp;usg=AFQjCNEkMFohEjCQqEqYuhvnS7n4cuxVag\" class=\"keychainify-checked steem-keychain-checked\">The Social Singularity<\/a><\/em>. He is also the founder and Executive Director of&nbsp;<a rel=\"noopener\" href=\"http:\/\/social-evolution.com\/\" target=\"_blank\" data-saferedirecturl=\"https:\/\/www.google.com\/url?q=http:\/\/social-evolution.com&amp;source=gmail&amp;ust=1529501320688000&amp;usg=AFQjCNHkF9n44rAXQf767G4QDIgPjnQtLQ\" class=\"keychainify-checked steem-keychain-checked\">Social Evolution<\/a>\u2014a non-profit organization dedicated to liberating humanity through innovation. Max is also co-founder of the&nbsp;<\/span><a rel=\"noopener\" href=\"http:\/\/voiceandexit.com\/\" target=\"_blank\" data-saferedirecturl=\"https:\/\/www.google.com\/url?q=http:\/\/voiceandexit.com\/&amp;source=gmail&amp;ust=1529501320688000&amp;usg=AFQjCNFzM7-yakReQkORcI6iGYue5TjyUA\" class=\"keychainify-checked steem-keychain-checked\">Voice &amp; Exit<\/a><span>&nbsp;event and former editor at the Foundation for Economic Education (FEE). Max is a futurist, a theorist, a published author and an entrepreneur.<\/span><\/p>\n<\/div>\n<p style=\"font-style: italic;\">This article was originally published on FEE.org. Read the <a href=\"https:\/\/fee.org\/articles\/the-conservative-case-for-cryptocurrency\/\" class=\"keychainify-checked\">original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you listen to defenders of the US dollar, you might get the idea that cryptocurrencies are only good for funding terrorism and hard drugs. And when you consider that cryptocurrencies represent a pretty clear break with tradition, a conservative might be inclined to stick with what\u2019s familiar. That\u2019s understandable. One of conservatism\u2019s hallmarks is skepticism of change that happens too quickly or threatens well-established institutions. In this way, many conservatives think the US dollar is good enough: If it ain\u2019t broke, don\u2019t fix it. But I want to make the case that the dollar is broken. Indeed, I want to persuade you that adopting cryptocurrency is an act of patriotism. Yellen\u2019 at Bitcoin \u201cTo the extent it is used,\u201d said Treasury Secretary Janet Yellen of bitcoin, \u201cI fear it\u2019s often for illicit finance.\u201d We can expect more of this kind of rhetoric from those who see cryptocurrencies as a threat to the dollar\u2019s hegemony. This sort of rhetoric almost always precedes regulatory zeal. In this case, regulation would be designed to keep people locked in the dollar\u2019s matrix. Otherwise, how will authorities make the people clean up their messes? Remember, politicians created the money for the recent $1.9 trillion [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[2196,512,2253],"class_list":["post-26630","post","type-post","status-publish","format-standard","hentry","category-news-and-politics","tag-crypto","tag-cryptocurrency","tag-politics"],"_links":{"self":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts\/26630","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/comments?post=26630"}],"version-history":[{"count":0,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts\/26630\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/media?parent=26630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/categories?post=26630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/tags?post=26630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}