This is an opinion editorial by Robert Hall, content creator and small business owner.
What is the most likely path to hyperbitcoinization? This is a question that has come up in my mind over and over again. Will it be a top-down implementation like we saw in El Salvador last year? As for world leaders, Nayib Bukele is the rare exception to the rule. Most world leaders think within a predefined box of fiduciary options.
Will adoption be more people-driven like in Nigeria, where Bitcoin was integral to the funding of the youth-led protest against the Special Anti-Theft Squad (SARS) in October 2020, after the bank accounts of many people were frozen? protesters?
Bitcoin adoption in Nigeria has continued to grow despite its central bank prohibiting legacy financial institutions in Nigeria from interacting with Bitcoin at all. P2P Bitcoin trading in Nigeria increased 27 percent despite the ban.
Bitcoin adoption in Nigeria and El Salvador are two examples from opposite sides of the adoption spectrum. Both work despite legal hurdles and educate more people about Bitcoin.
What will widespread adoption look like in developed countries like the United States, Europe, and developed countries? The dynamic in the West differs significantly from that in developing countries. Western countries have the rule of law, regulated markets, a population that has access to bank accounts, and a currency that doesn’t degrade as quickly as other currencies.
The adoption of Bitcoin in the West will take a fundamentally different path than the path that other parts of the world will take. This needs to be recognized and informed by how Bitcoiners talk about adoption in the Western world.
If you live in the West, you live in an economic and political panopticon. Your government knows who you are, where you live, and how much money you make. They can also collect your phone records, transaction history, and online activity with impunity through third-party providers.
If you have money in a bank account, Western governments can call your bank, tell them you are a terrorist, and seize your bank account. Don’t you think it can happen to you? It happened in Canada to ordinary citizens who were protesting government policies they disagreed with and were campaigning for change. Canadian truckers were not violent thugs with guns; they used well-established protest tactics to make their voices heard.
What did the Canadian government do in response? They froze their assets and used violence against them.
Do you think this is an isolated incident? Authorities in the Netherlands opened fire on a farmer who was protesting against government plans that would cut nitrogen oxide and ammonia emissions by 70 percent in seven years. The state doesn’t give a shit about your life if it gets in the way of their plan, plain and simple. You know it, and I know it. There is no need to sugarcoat anything here.
The idea that we are free is crazy. Bitcoin is our best hope for changing our current circumstances, but it starts with the people who buy and own Bitcoin.
Where do people in the West buy Bitcoin?
For a vast majority of people new to Bitcoin, their first interaction with Bitcoin will be through exchanges like Coinbase, Kraken, Binance, and OkCoin. It’s not ideal, but these are the facts.
When someone new to Bitcoin searches for “how to buy bitcoins,” the first page results will show them where they can buy bitcoins on exchanges.
According to a recent article, 46.5 million Americans have never owned crypto and plan to buy it in the next year. 32 percent believe that cryptocurrency will replace fiat currency over time. Presumably, a large part of these new buyers will be looking to buy bitcoin. They will buy your bitcoins on exchanges.
These entities comply with the Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations established by their jurisdictions.
People new to Bitcoin will have no problem handing over their personal information to these companies because they see it as normal and it is something they have done all their lives. This is a fact of life that is not going away any time soon.
This is an unpopular opinion, but I’ll say it anyway. The mass adoption of Bitcoin in the western world will be with Bitcoin KYC. I wish it wasn’t, but I don’t see how it won’t. There is even an implied realization of this fact on Bitcoin Twitter.
The new people coming into Bitcoin will not be the anarcho-capitalist type who wants nothing to do with the state. The next wave of people entering the space will be the mom-and-pop store owner down the street, the trucker, the postman, or a teacher looking to save their hard-earned money that the government can’t demean.
Many people see the government and the laws and regulations they enact as a form of security. They may see KYC as a good thing. KYC is now a fact of life, and this creates information traps for hackers to target. We have dealt with this problem in the fiat world; we’ll also have to deal with that in a bitcoin standard. I didn’t make rules; I am looking at the facts as they are now. That doesn’t mean none of this can’t change.
Still, I think advising newcomers on different privacy methods is the way to go. There are many great articles here on how to make your Bitcoin more private.
“How CoinJoin, CoinSwap Enable Basic Bitcoin Privacy”
“A Complete Guide to Bitcoin CoinJoin”
“Follow Me If You Can: How Bitcoin’s Forward-Looking Anonymity Sets Work”
“How to use Whirlpool on desktop with RoninDojo”
“How to maintain privacy when spending mixed Bitcoin”
“Federated Chaumian Mints: The Future of Bitcoin Privacy?”
In addition to teaching newcomers about privacy methods, we should all be working on creating a bitcoin-powered parallel economy where we don’t need fiat offsets. This is the ultimate goal.
El Zonte in El Salvador and other communities have shown us how we can follow in their footsteps.
“On the coast of El Salvador, Bitcoin is becoming the standard”
“Bitcoin Ekasi: The municipality a year later”
“Bitcoin Beach Brazil: Inspired by El Salvador”
“‘Bitcoin Valley’ hub launched in Honduras”
The future of bitcoin is bright if we can get enough people in the bitcoin lifeboat. We shouldn’t argue about which path they took to get there, but rather educate them about the more private ways of doing it.
Stay focused on the mission. Educate others. Satellite stack.
This is a guest post by Robert Hall. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.