As the world’s global economy transforms toward a more digital and interconnected reality, the dinosaurs of the US Government showcase their stupidity and tyrannical impulses yet again. Case and point, Senator Elizabeth Warren of Massachusetts and her critiques of Bitcoin and cryptocurrency. Surprise, surprise, she has called on the totalitarian tentacles of government to tackle the “threat” “head on.” For someone who claims to be for the people, it is amusing she is assailing an emerging financial system that benefits the people rather than big banks and global institutions.
In a recent hearing on banking that was primarily about the prospects of creating a central bank digital currency (CBDC), or a digital dollar, Elizabeth Warren took shots at Bitcoin and other cryptocurrencies peddling falsehoods and lies about the energy consumption of Bitcoin. Proof of work cryptocurrencies do have higher energy usage and transaction fees compared to proof of stake cryptocurrencies, but on the whole, proof of work energy output isn’t as detrimental as the media and ignorant politicians claim. Furthermore, many cryptocurrencies—including Bitcoin—incentivize and use sources of renewable energy. The internet uses more electricity than all cryptocurrencies combined. Yet no one is calling for the banning of the internet to save the planet. This, however, doesn’t stop Senator Warren from spouting falsehoods in the Senate chamber and on national television during interviews. Lastly, the proof of work system is meant to protect the data of individuals—especially from thieves and tyrants like Warren and her big bank and government cronies. (Unsurprisingly, the media, a tool of the current financial system, is giving a platform to all the lying politicians about cryptocurrency and peddle their own lies to the public about cryptocurrency constantly harping on its supposed negative environmental impact, criminal use — something that is lower than criminal use of cash and hard metals — , and calling it a ponzi scheme and scam. The real ponzi scheme and scam is the current financial system they want you to remain part of which is also the largest criminal enterprise on the earth.)
The want for a CBDC comes with pros and cons. Of course, our politicians will only speak of the positives: easier use, direct deposits without paper filing, no fees for transactions. But there are also possible negatives relating to a digital dollar system controlled by central banks.
The Federal Reserve can put a time stamp on digital currency. Basically, use it by the expiration date or lose it. This would, of course, achieve what modern monetary theory believe: spend, spend, spend. (China’s intention to create a CBDC also comes with an acknowledgement of experimenting with an expiration date.) Many Americans may wake up only to find their digital dollar of no use because they didn’t spend it before the expiration date. It should be noted, here, that it remains unknown whether the US would experiment with an expiration date on its CBDCs but that is an ever-present possibility precisely to “encourage” spending and that the Federal Reserve through its CBDC program can add-in an expiration time even if the first iteration doesn’t include one.
Additionally, CBDCs will enhance, not erase, financial and monetary control by central banks. It is rich that liberals supposedly antagonistic toward big bank interests rush to strengthen the power and control of the central banks over our economies. Since CBDCs would be issued by a central bank, rather than an employer-based paycheck which we deposit into our own bank account at discretion, a blockchain ecosystem for CBDCs would be exceedingly—if not entirely—centralized and under central bank control. The argument in favor of this is that it would crack down on money laundering. True. But at what cost? The argument that CBDCs would prevent fraud and laundering masks the fact that it would grant even more control of monetary and fiscal policy to central banks.
CBDC advocacy fundamentally misunderstands the purpose of cryptocurrencies. First, cryptocurrencies seek anonymity and decentralization: the separation of money and state, separation money and banks, separation money and intermediaries. Cryptocurrencies allow individuals to be fully in control of their own finances without the restrictions imposed by banks, financial institutions, and outdated financial ecosystems. While not all will embrace this laissez-faire libertarian approach to finance, many will and those who do not will stand be second-hand beneficiaries of a more decentralized financial system.
Second, many cryptocurrencies are meant to operate blockchain and smart contract ecosystems along with the growing non-fungible token (NFT) industry. They are the fuel, rather than the “digital gold,” which permit an ecosystem to operate. Their role in operating the technology is what gives them value and not their created purpose as an alternative form of currency (even though businesses and countries are beginning to see the value of accepting cryptocurrencies as a form of payment). Without cryptocurrency in the ecosystem, the ecosystem doesn’t operate.
Governments and central banks that think CBDCs will stem the interest of cryptocurrencies do not understand that people are interested in cryptocurrencies not because of they are “digital dollars,” people are interested in cryptocurrencies for the technological promise, the decentralized anonymity of the blockchain and security that comes with it, the financial freedom of being one’s own bank, and, of course, the investment gains. All things that a CBDC doesn’t provide.
Warren is angry that people are fleeing the crumbling fiat central bank system that prop up petty tyrants like herself and her pals. If financial systems aren’t under the suffocating control of central banks, regulatory agencies, and the IRS, then Senator Warren and all her ilk are unhappy that average people are in control of their own finances. How dare common people take control of their own livelihoods without the “protection” of the government! Make no mistake, despite her populist persona, Warren is a petty tyrant and defender of the financial status-quo. (She always has been despite her populist persona.)
While CBDCs are certainly in our future, probably within this decade, the attempt to quash cryptocurrencies through CBDCs will fail because CBDCs are just digitized manifestations of central bank fiat currencies. In fact, CBDC creation will probably spur more people to Bitcoin and other cryptocurrencies to escape the further control of finances that will happen through the creation of CBDCs. CBDCs are just the nightmare of fiat monetary policy gone digital.
CBDCs have no restraint on central bank policy, inflation, or centralized control. Many, but not all, cryptocurrencies have fixed supplies. This provides cryptocurrencies with an intrinsic hedge against inflation. Since cryptocurrencies are not tied to central banks, they retain their independence from central bank policies and centralized control as they operate in their own ecosystems. The more likely scenario is that useless paper fiat and their digital currency variations will exist alongside cryptocurrencies rather than suppress cryptocurrencies. Countries that prioritize blockchain, smart contract, and cryptocurrency industries will also outpace legacy economic systems and likely attract the new capital of the twenty-first century which may cause a geopolitical and political-economic powershift if the dodo birds of developed countries remain tied to a sinking ship.
We can only hope the likes of Elizabeth Warren and Janet Yellen don’t get their way strengthening the current corrupt Federal Reserve banking system (in the name of helping the people, of course) while restricting a genuine hope of individualized financial freedom. Of course, Elizabeth Warren is a shill for the big banks and the Federal Reserve—she always has been despite her leftwing populist and little-person persona. Hopefully more people will see through her façade and prevent her, and her ilk, from stifling innovation and individual freedom. If the IMF, Federal Reserve, and Elizabeth Warren are opposed to Bitcoin and cryptocurrencies, you should be in favor it just on the principle of their opposition to it. As for Senator Warren, only the ideologically blind cannot see the fact that she is, and has been, the Tyrant Queen of the Big Banks and Federal Reserve and its chief thug in the U.S. Government.
Hesiod, Paul Krause in real life, is the editor of VoegelinView and a writer on art, culture, literature, politics, and religion for numerous journals, magazines, and newspapers. He is the author of The Odyssey of Love and the Politics of Plato, and a contributor to the College Lecture Today and the forthcoming book Diseases, Disasters, and Political Theory. He holds master’s degrees in philosophy and theology (biblical & religious studies) from the University of Buckingham and Yale, and a bachelor’s degree in economics, history, and philosophy from Baldwin Wallace University.
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