Back in March I wrote a post on legitimacy and how it is the community that legitimizes behavior.
The other day, Trump questioned the legitimacy of Bitcoin.
“Bitcoin, it just seems like a scam,”
And then contradicted himself.
“I don’t like it because it’s another currency competing against the dollar. I want the dollar to be the currency of the world. That’s what I’ve always said.”
If Bitcoin is a scam, how can it compete with something like the US dollar?
This all comes down to the process of legitimization, which requires some kind of authority to make something "legal", but don't question who that authority may be. Legitimization doesn't have to come from a centralized entity, it can come through the normalization of thought or behavior of a group, a community. In the case of Bitcoin, the thing that makes it not a scam is that a growing community of users legitimize it through their investment and usage.
Because of its not a scamminess, it has the potential to "compete against the dollar", which further legitimizes it to the point that for instance, El Salvador can pass a bill to make it legal tender in their country, effectively legitimizing it as legal tender globally in the same move. Interestingly, El Salvador has used the US Dollar as its fiat currency since 2001, meaning they have now directly pitted Bitcoin against the Dollar at the local level.
Bitcoin is now, legit.
As more countries start to make similar moves and potentially expand the scope out to other or maybe all crypto currencies, this further legitimizes crypto, but only from the sense of the centralized authority, as it has already been seen as legitimate by crypto enthusiasts for years.
Interestingly, while most people globally still laugh at the idea of crypto and the people who back it, much of what they/we have predicted is coming to pass. This doesn't just legitimize crypto, but also puts pressure to legitimize the community itself. When governments are worried about Bitcoin becoming a global reserve currency and stripping away their power, the community that backs it are becoming powerful.
The current economy and conditions has been developed through hundreds of years of decisions to increasingly put the power in the hands of a few to the point that challenging that economic power seemed a fool's errand. In thirteen years, fools have not only made the attempt, but built enough capability to threaten the modern economy at its core. What will thirteen more years bring to the argument?
But, they are looking to further legislate cryptos to maintain control of the economy, but doing so further legitimizes them and in time, will result in the further (and potentially speed) erosion of exactly what they are trying to protect.
Not only this, the governments who are struggling to get access to economic value from companies due to global accounting practices, will be vying for the wealth generated on decentralized blockchains to be spent locally. This results in them having to tread a fine line, as while they want control of the value of the assets, they also need people with those assets. If they overcontrol, the people with will find locations that are more welcoming of them and their crypto.
What is actually changing globally is the paradigm of who has economic control, with the lie that it is in the hands of the governments being perpetuated for years. Control has always been in the hands of the consuming masses through the decisions they make and, that includes what "tokens of trade" they choose to legitimize in the marketplace. If the demand for fiat currencies drop and the demand for crypto increases, the digital economy not only takes economic weight, it also disperses ownership of those currencies across the entire userbase, fundamentally changing the functioning of economies and therefore, the societies that enable them.
The kinds of social movements that we have seen in the past have shifted culture, but have been slow and largely ineffectual in changing the makeup of the economy or affecting the increasing wealth gaps. The reason is that despite all the protests, they are appeals for change to the same authorities that benefit from the economy being as it is now. With crypto, rather than appealing to change laws and institutional habit, it is targeting the source of control itself, the economy.
Not only this, it hasn't done it with some kind of attack or protest, it has done it using a peaceful, opt-in process, where starting from nothing, it has increasingly brought people into the fold, with no force, no ultimatum. Because of this, while no one is forced to change, people will eventually have to make a decision on which economy they think is going to be the most valuable for them and this decision will be made more clear, once userbase increases in crypto and businesses follow the money, as they always do. Businesses don't care what that money is called, as long as they can use it to represent value and have purchasing power with it. It is the same for all users - no one cares what their currency is called, as long as they can use it to trade.
We are entering into interesting times in regards to the economy, as there are so many disruptions that are taking place simultaneously, including the massive increase in supply of money in the traditional economy, which will eventually lead to high inflation. This will put more social pressure on governments, as well as force the governments to find ways to rein-in the inflation rates, leading to more disillusioned people who are questioning the legitimacy of the centralized authorities, and the way they manage control people.
The questions being raised are not going to go away and as more people build their financial literacy as they opt-in to alternative economies, an increasing number of people are not only going to have the understanding, but also the economic capabilities to pressure the authorities to provide answers, or risk being made illegitimate by society.
Taraz
[ Gen1: Hive ]