Fate or Falter: Can Bitcoin rise to become the global currency of the world?
Time and tide wait for none.
Change is inevitable, and the digital assets market know that better than anyone else. From volatility to price movements, to proponents switching camps and even to a change in principles, the first decade of Bitcoin has been tumultuous, to say the least.
But, has the goal changed?
Curated as a currency for the world, Bitcoin was seen as universal, ubiquitous, authority-resistant and censorship free. While it was built to resist ‘government tyranny,’ in the maiden decade this ‘goalpost’ has shifted more often than one can count, while the ‘investment’ aspect of the digital asset has seeped to the fore.
Granted there have been rapid developments over the past few years on the adoption front and recognition among lawmakers, regulators, mainstream media and the general public is off the charts, actual use cases are not as much as its adherents like to believe. Additionally, the number of countries that have not taken to cryptocurrencies due to its nature of being the currency for the dark trenches of the web, has affected its use as well.
Bitcoin, as a medium of exchange, is faltering. Fate on the other hand, may have other ideas.
With active BTC addresses on high, hash rate increasing, and dominance correlating with the price rally, proponents are looking towards healthy fundamentals as a breath of ‘real’ life for Bitcoin. But, can Bitcoin sustain this rise to become the global currency of the future?
The Art of Defense
Many cryptocurrency-stalwarts, especially BTC-maximalists, have thrown their hat into the ring, suggesting this “global reserve currency” pipe dream can manifest sooner than one thinks. Anthony Pompliano, Co-founder and Partner at Morgan Creek Digital and one of the foremost voices in the field, has called this aim as the coin’s “Department of Defense.”
In a recent interview, Pompliano stated that Bitcoin can take the path to become the top global currency, and it can do this without the threat of violence and war. In a power-hungry world, Bitcoin can become the currency-leader in the ‘absence of guns.’ He added that Bitcoin, deviating from the currency leaders of yesteryear, operates on “defence,” rather than “offence.”
“What we are seeing with Bitcoin, it’s the first time a currency is focusing on defence rather than offence. So, there is no weaponry, there is no attacking other currencies or countries in order to attain global reserve status. Instead, it is just completely defensible.”
In an era where the mind trumps matter, where skill can surpass brute force, where knowledge can upend might, power is no longer the sole deciding factor. From a diplomatic standpoint, military prowess cannot be the sole determinant of a country’s standing, as economic and technological armies also need to be mustered.
The Art of War
Calling it an ‘indirect use of power,’ American political scientist Joseph Nye in his 2011 piece aptly titled “Has Economic Power Replaced Military Might?,” reiterated the above and now Pompliano, the BTC-opportunist, has reiterated Nye’s theory, with a heralding role for Bitcoin and the larger cryptocurrency world.
In a blog post published earlier this week, the Bitcoin enthusiast added not only to his own ‘defensive’ defiance of Bitcoin, but to Nye’s predicament of the nature of international relations. Pompliano questioned a country’s options if military power, economic capabilities, or the ability to restrict the same, and cyber warfare were thrown out the window. He stated,
“There is one problem with this military, economic, and cyber strategy though — what happens if we can’t attack a country through military firepower, economic sanctions, or cyber warfare?”
Bitcoin, according to the Morgan Creek Digital executive, is a manifestation of the Internet and its creators did something that it “counter-intuitive” and “misunderstood.” Reiterating his point of Bitcoin pegging defence over offence, Pompliano said that the king coin has curated a “plan to gain superiority by attacking other countries or currencies.”
Listing the three options and its natural response if Bitcoin is thrown into the mix, Pomp stated that the prospect of Bitcoin emerging as a ‘global reserve currency’ runs deep. Firstly, in terms of military power, Bitcoin is uncontrollable and its “decentralised nature” would deem firepower “irrelevant.” Secondly, Bitcoin cannot be restricted either by a single party or to an enemy. Hence, unlike the US Dollar, Bitcoin cannot be used as a means of economic sanctions. Finally, given the strong fundamentals of Bitcoin, the lucrative billion dollar reward if the BTC network is hacked into has not resulted in a breach therefore, leading to cyber attacks also being ruled out.
Hence, according to Pompliano, Bitcoin’s defensive capabilities can overtake the three core pre-requisites that build a global reserve currency, with the same transpiring soon in the future. He concluded,
“The world is changing quickly. Nation-states are behind the curve. And Bitcoin is the sleeping giant that is well-positioned to be the first currency to achieve global reserve status without ever having to engage in conflict.”
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