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Monday, June 7th 2021 - Issue #1007

Nation States have entered the room 

I’m writing this rag from the back of an Uber as I head to the airport to hop on a flight home after a hell of a week in Miami for the Bitcoin 2021 conference. There are many things to reflect on after a week of festivities with a group of freedom loving bitcoiners, but I think there is one event that has the potential to end up being remembered as one of the most pivotal moments in Bitcoin’s history; Jack Mallers announcing that El Salvador plans to make bitcoin legal tender for its citizens and will begin accumulating sats on their Treasury’s balance sheet. 

If there is material follow through behind this announcement it will mean that the (public) mad dash for bitcoins between nation states has begun in earnest. This means the world has changed forever. As you can see from the thread above written by El Salvador’s president, Nayib Bukele, the move to adopt bitcoin as legal tender is a direct reaction to the obscene amount of US dollars that are being printed ex nihilio and making El Salvadorian citizens worse off due to the fact that they are a dollarized country themselves. El Salvadorans have depended on the dollar to provide a form of economic stability and it seems they are not so sure it will be able to provide that form of security into perpetuity. And since they have no say when it comes to monetary policy in the US, there is no way they could affect the changes necessary to bring back that sense of stability. As a result, the government is forced to seek out more stable options. President Bukele has postured that Bitcoin seems to be the best of those options.

Again, we will see if there is any follow through with this announcement, but for the sake of today’s rag let’s assume that this follow through materializes. What does it mean? 

It means the downtrodden are beginning to stick up for themselves. It means a country that has been beholden to monetary forces outside of its control for a long period of time feels confident that it can take control of its own destiny by opting in to a money driven by the free market instead of a cabal of governments and central banks. It means that Bitcoin is providing the utility to the world that it set out to provide when Satoshi launched the protocol in 2009. It means that the mad dash for bitcoins and talent building on bitcoin or talent with the desire to live in a world in which bitcoin is accepted between nation states has begun in earnest. 

If bitcoin is treated as legal tender and citizens are encouraged to accumulate and spend bitcoin without the fear of overbearing taxes, it is not hard to see many bitcoiners begin to migrate to El Salvador to preserve their stack and build in relative peace from the tax man. Even better, it means that millions of people in El Salvador have an increased chance of becoming “banked” via bitcoin. Unleashing an unfathomable amount of economic activity that is impossible under the status quo banking situation within the country. 

Beyond that, it puts the pressure on and gives confidence to other countries in similar situations to adopt similar legislation. Inciting a wave of momentum moving in favor of bitcoin and against the dollar reserve system.

Many, like that tone deaf douche Jason Calacanis, will deride the El Salvadoran government as nothing more of a marketing ploy that will have an inconsequential impact on the incumbent monetary system. However, these feckless armchair critics do not understand the power a small move like the one Bukele has made can have on the rest of the world. The first domino has fallen. It may be a relatively small domino, but it can lean on bigger dominos that begin to tip into even bigger dominos. The movement has started. You’d be very naive to think it will stop here. 

It would be beautifully poetic if the western elites snickered and sneered for years on end as the emerging economies of the world adopted bitcoin and began to thrive as a result. 

There is no stopping this momentum. You cannot blame sovereign nations for deciding to take their fate into their own hands by adopting bitcoin as central banks controlling the predominate fiat currencies around the world run mad with printing power. 

Get on the train or get left behind. I’m happy that the people of El Salvador appear to be hopping on the train. I wish them much success. 
Final thought...

A couples massage was a great way to end that marathon of a week. 
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