This is opinion editor Mickey Koss, a West Point graduate with a degree in economics. He spent four years in the infantry before transferring to the Finance Corps.
“First they ignore you, then they laugh at you, then they fight you, then you win”
– Refers to Mahatma Gandhi
At the time of writing, the US Senate has just introduced the Digital Assets Anti-Money Laundering Act of 2022. The bill has many threatening aspects such as KYC laws for self-protecting wallets and licensing requirements for money transmitters.
The bill also comes on the heels of a recent statement by the European Central Bank (ECB) declaring that bitcoin is “artificially gasping for air before the road to irrelevance.” About a week later, a bank official announced that he was considering a ban on Bitcoin and cryptocurrencies to reduce environmental damage.
But as Europe’s energy crisis deepens, don’t you think European regulators have bigger fish to fry, like Germany’s growing use of coal power? Or maybe politicians and officials are beginning to understand Bitcoin and how it tilts the balance of power? On second thought… maybe not.
Below is a transcript of the recent Senate Banking Committee hearing by Level39.
I think this is just the beginning of the “then they’ll fight you” phase and it’s only going to get worse in 2023. Be careful this year. While the ban and many of the regulations are comically impossible to enforce, they will serve as a significant speed bump for widespread adoption. I would listen to the ground (and probably Bitcoin Twitter) for situations where a sea of calls could affect your government elected representatives, like what happened with the infrastructure bill in 2021.
Fortunately, I think more and more people will start to wake up from the matrix and realize how bad things are. The fact is that at this point it becomes quite difficult to hide it.
The graphic above is my new favorite. When people ask me about Bitcoin lately, all I do is show them this chart and they quickly understand the scale of money creation in the 2020 COVID-19 era. What they don’t yet fully understand is that this will continue, and probably at increasing rates and intervals.
The US federal government is projected to run a $1 trillion deficit in 2023 (that’s 12 zeros, folks). Even if the US government were to shut down the entire military and eliminate the Defense Department’s projected $800 billion budget, the budget would still be projected to run in the red for 2023. higher, meaning more debt will have to be issued, and this will be at a time when interest rates are rising due to a tightening Federal Reserve.
The Congressional Budget Office projects that negative growth in GDP equates to lower-than-expected positive growth. Combine that with the expected rise in unemployment and you’ve got yourself a double fiscal hit. First, unemployment and negative GDP growth means less tax revenue for the federal government, which potentially means bigger deficits, meaning more debt. You add that debt is being issued at a significantly higher rate, and you have the ingredients for an accelerating debt spiral.
Even if everything goes perfectly according to plan, a trillion dollar deficit is certainly nothing to celebrate. I think the numbers speak for themselves. People I work with and am friends with are really starting to notice and worry; people who have never been interested in economics before.
And when all the proverbial stuff hits the spinning top, you can bet the Fed will step right in with more money printing. Adding a trillion dollars to the debt at 5% interest? I don’t think that will happen. I’m betting interest rates won’t be higher for a long time. Quantitative easing is three dead. Long live quantitative easing infinity.
Coincidentally, while writing this post, I received the above article from Bitcoin Layer via email. They seem to agree with me. Rate hikes cannot increase much more than they have already risen. They are mostly off the beaten path.
Bitcoin Rekindles Pioneering Spirit
In what was once called America, people took responsibility for their own actions in seeking adventure and opportunity in the West. The Oklahoma Sooners’ namesake comes from the Oklahoma Land Rush of 1889, where approximately 50,000 Americans lined up outside the “Unassigned Lands” to claim their share of the undeveloped wilds that would become Oklahoma.
Like hosting in the 19th century, Bitcoin is both a team sport and a competition. It’s a race in the sense that if you don’t take responsibility to claim your stake in cyberspace before someone else, you might be missing out on the opportunity of a lifetime. It’s a team sport in the sense that successfully implementing Bitcoin into your life will require some degree of help from others.
How many BTC Session videos did you watch before building your first hardware wallet? How long after that did you actually send any UTXOs to your personal control address? How long did it take you to know what UTXO is?
Bitcoin is the new frontier, the digitization of the Uncharted Lands of the old American West. The journey is full of dangers and pitfalls, but the reward is an opportunity that we will never see again in our lifetime. Everyone gets bitcoins for what they deserve, yes, but that doesn’t mean you can’t help them speed up their learning process.
Let’s make 2023 the year we unload the exchanges; checking them for paper bitcoins with sheer blunt force trauma. I challenge you to try and embody the homesteading pioneer spirit to help make this happen; helping your friends and family understand this phenomenon and opportunity. Helping them support themselves and maintain their wealth independently. Help the horse to the water. You can’t save everyone, but you can at least try to see what’s going on with them and stake their claim in the new Wild West of cyberspace.
This is a guest post by Mickey Koss. The views expressed are entirely their own and do not necessarily reflect the views of BTC Inc or Bitcoin Magazine.