By SERKAN AYDIN
That lack of central authority is the fundamental reason why cryptocurrencies, particularly Bitcoin, terrorize governments and institutions. In order to better understand the gist of this phobia, it is crucial to familiarize oneself with how governments and conventional currencies function.
Leading political figures are skeptical and stunned by the fear that Bitcoin might be employed to endanger capital controls, misused for money laundering or financing global terrorism, and could pose a risk to people that don’t have sufficient financial education. Despite this skepticism and antagonism, plenty of people have still put their faith in Bitcoin – especially people of color, minorities and under-banked communities in the U.S., Africa and Latin America.
A vivid legitimate theoretical argument exists in favor of cryptocurrencies. This argument relies on the notion that central banks have messed with the capita supply to the extent that recessions have been triggered and unemployment has worsened, in turn generating a global banking system characterized by nepotism, corruption and inequality.
However, the worsening antagonism directed at Bitcoin has led to the emergence of many harsh, vocal figures in the political arena. Former Greek Finance Minister Yanis Varoufakis has posited that that Bitcoin forms “a kind of feudalism run by the early adopters” and that it would be literally “catastrophic” if it replaced fiat currencies.
Nevertheless, he also added that digital assets do have some positive aspects that can heal the world. In fact, the former minister bravely questioned and attacked the democratic nature and essence of Bitcoin, asserting that “given its fixed supply and given the fact that there is no democratic mechanism to determine who gets how many Bitcoins, it creates a kind of feudalism run by the early adopters of Bitcoin.”
The European Central Bank (ECB) made a very significant announcement that it had taken a major step toward launching its own sovereign digital currency.
Within this scope, the investigatory phase that will last two years has been approved to delve into the numerous tenets of a central bank-issued digital currency. The ECB, in its official statement, fervently argued that the bank is committed to privacy and being environmentally friendly.
The ECB has made it a point to emphasize that the carbon footprint of the “digital euro” would be much less than that of Bitcoin. In Asia, war is also being waged on cryptocurrencies. Chinese authorities have lashed out at exchanges and investors in an attack on crypto trading and use.
But, things began to worsen by the end of May as the goal changed to root out the crypto mining industry entirely. Amid the ensuing chaos, some Bitcoin bulls began abandoning the leading cryptocurrency as JPMorgan suggested that the bear market could be expected for a very long time.
On July 7, prominent crypto skeptic Sen. Elizabeth Warren penned a letter to the U.S. Securities and Exchange Commission (SEC) informing the regulatory institute that it had until July 28 to have the final say about its role in cryptocurrency regulation.
In the letter, Warren refers to the sudden boom in trading volume on main crypto exchanges, especially Coinbase, which witnessed an increment of over $300 billion (TL 2.53 trillion) between the first quarter of 2020 and the first quarter of 2021.
Despite the rigid criticism and blossoming hatred of cryptocurrencies, there are still outspoken proponents of Bitcoin, who never miss an opportunity to defend the controversial ecosystem. The meteoric rise of Bitcoin was breathtaking. Bitcoin has formed a sense of belonging and a tribe-like community since its inception in 2009. As a currency, Bitcoin is not supported by any government, but by the hype around it.
The intrinsic value of Bitcoin is the adamant faith of those who believe in its future. With the fanatical commitment of its followers, its mystic and mysterious creator, its rituals and holidays, Bitcoin is akin to a religion. If Satoshi is deemed a prophet, then the Bitcoin whitepaper is the sacred text, and the exponents worship the whole system.
Many early adopters of Bitcoin made the change in protest of corrupt governments and central banking systems and their sinister manipulations of currencies and money supplies. But is Bitcoin really a utopic system spurred by fanaticism, or does it have another function? Namely, can it generate a revolution that produces a new system of financial socialism, unlike the corrupt systems lead by central banks, oligarchs and institutions?
During the pandemic, many minorities, especially the U.S.’ black community, realized the truth that they should no longer engage with a system that does not treat undervalued subgroups of society equally.
Many black politicians, entertainers and academics are of the opinion that the government should act to improve policies, or they are willing to take the future into their own hands.
Unlike many crypto skeptics, the black community has discovered the benefits of the Bitcoin ecosystem. It must now change its entrepreneurial mindset and use cryptocurrencies as a tool for economic freedom in order to lay the foundation for future generations.
The community is well aware of rising racism, and George Floyd was the solid proof of this. According to a Global Strategy Group survey, just 12% of black and Latino business owners who made an application for financial aid received what they asked for. Some 26% said that they obtained only a fraction of what they had requested. Half of the applicants say that they can’t envisage their business six months from now.
It is a well-known fact that the purchasing power parity (PPP) prioritizes applicants from wealthier clients, most of whom are white, at the expense of black business owners who don’t have existing banking relationships. This data unveils the historically racist attitudes that Black business owners have suffered from the traditional financial system for centuries.
The famous crypto investor Travis Kling claims that historical colonial exploitation is still alive, and institutional racism is evident in the disparities in wealth, income, criminal justice, employment, housing, health care, political power and education.
Kling believes that Bitcoin can fix this inequality, defining Bitcoin as a “non-sovereign, hard-capped supply, global, immutable, decentralized, digital store of value. Bitcoin is also a censorship-resistant hedge against inflation and the most significant monetary experiment in human history.”
Author of the outstanding book “Bitcoin & Black America,” Isaiah Jackson says that by continuing to deposit money into banks, black people are feeding a system that doesn’t care about them. He writes that: “All those deposits would enrich banks which encouraged redlining, denied loans to qualified applicants, and even beyond race, bankrupt the entire financial system in 2008.”
Jackson believes that history will serve as evidence of how Bitcoin will couple finance and technology to ensure the economic survival of black communities in America, as Bitcoin offers the opportunity to start amassing generational wealth and leverage. And we all know that black communities have a rich history of entrepreneurship.