US: The Collapse of the Status Quo. Part III. Crypto and Purchasing power.
It was another cloudy day in London. I rolled out of bed on a Saturday, stumbled hungover downstairs and proceeded to drag my feet down to the corner store to replenish nutrients. As I was passing my bank, my eyes still half closed, I had a thought. I was a month away from graduating and looking at $60k in student loan debt. I thought I could withdraw all the money I had left at that moment and invest it in Bitcoin. I read that it was going to half in a few days and that always increased the price. Risky fuck all thinking, I judged, and immediately dismissed it and went for a safer choice-eggs. That April 2015 Bitcoin was worth $232. Now it is worth nearly $8,000. In the past month Bitcoin price index jumped $2,000, sending investors into a buying frenzy and journalists publishing stories of a crypto utopia. A crypto economy can only be called a utopia when it is free from government control which is only possible if crypto proliferates in the digital world and does not take place of hard currency to purchase physical goods.
Currently Bitcoin can be used to make purchases online and in person. Hardware companies like Microsoft, Dell, and Steam have implemented Bitcoin payments. Coinmap lets a shopper find stores that accept crypto. Gyft allows one to use cryptocurrency to purchase gift cards for Amazon, Target, Walmart, and other major retailers. Wirex’s crypto debit cards can be used all over the world with no extra fee. Expedia accepts crypto currency for making flight and hotel reservations. Several online casinos embraced crypto after Visa started blocking transactions that it suspected were gambling.
The growth of value of Bitcoin, birth of 1,1000 others tokens, and utilization of cryptocurrency to make purchases has created a massive unregulated and volatile market. In an attempt to shield investors from risk, the government now requires identity verification to purchase cryptocurrency. Major banks, led by Chase, to protect their float, blocked their credit cards from being used to purchase coins. The state of New York just opened its own crypto currency exchange.
When designing a crypto utopia, the relationship between the government, cryptocurrency, and the market is key. A successful marriage between crypto and the market will use crypto as a means of payment not just for digital goods but for services. Platforms, like Minds, that build their internal economies on crypto can benefit not only from the revenue received but from it being an investment. No conversion process necessary. With key crypto players, like Ethereum, it’s like being paid in stock. The value is guaranteed to increase over time. Services which are built on cryptocurrency will flourish across borders.
Cryptocurrency should not be used to purchase physical goods. The government has a firm grip on the consumer market. The fed currently classifies crypto as a security and the greater the market penetration, the more crypto can be regulated. The fall of the Silk Road is a prime example. If the government has a physical good that they can track down through means of distribution that they control or oversee, they can assert their power to get the outcome they want. Exposure of packages was the first lead that the government followed to ultimately shut down the illicit goods marketplace. Several others popped up and many are still active but it’s not a revolution, it’s a merely a battle, a question of time.
Buying coffee with Bitcoin is a cause of celebration to an investor, not a rebel. A rebel will keep crypto out of the physical world and use it to buy virtual goods and services. Crypto’s speed, volume, and diversity in function is suitable only for the digital world. So, let’s keep the government out of our wallets and build our own utopia, centered on freedom.