Friday, September 25th, 2020
In crypto, everyone talks about the eventual downfall of fiat money. But that seems to be all we do. We talk. We talk about fiat money being the reason for wars, how fiat money leads to the accumulation of debt, and how fiat money can lead to the kind of hyperinflationary events that destroy entire countries and the people who live in them.
We probably talk about these things because for the first time in history we have a potential solution to the fiat money problem. A solution that makes it so we no longer have to be beholden to governments and central banks for the money we use. Because we now have an alternative in the form of cryptocurrencies like Bitcoin Cash that allows us to send and receive money without having to rely on a third party. It is a new form of digital cash that is cheap, easy to use, and could open up all kinds of possibilities.
The problem is hardly anyone is actually using cryptocurrencies like BCH as money today. But that might be because there's no reason for anyone to use it.
I once tried to onboard a merchant and he told me he wasn't interested because there was nothing in it for him. And I had to admit he was right. It wasn't as if I could expect this donut shop owner, a typical family man, to suddenly become interested in fighting a revolution against the central banks.
"You grow big by solving people's problems. It is the only way," -Amaury Sechet
I had no argument when talking to that shop owner because at the time he didn't have a problem that needed solving. But what if businesses like his suddenly find themselves in a situation where they do have a problem? What if one day the dollars they've trusted their entire lives suddenly kept losing its value?
As you can see in the above chart, no reserve currency stays that way forever. In the past, we could never break the cycle because we never had an alternative. A new form of money that had both the properties of gold, and the properties of cash. A form of money that could be both a great store of value, and a medium of exchange. Money that was sound, and inflation proof, while also being infinitely portable, divisible, and easy to store.
It's no secret that in 2020 central banks have been printing money at unprecedented rates. In the past few months, more US dollars have been printed than in the previous three years combined. And in the last ten, more USD has been printed than in the fifty years before that.
All signs point to the fact that the world has entered the fiat end-game, and this is why it's important we be prepared with an alternative to the traditional financial system.
For a long time, I thought Bitcoin Cash would only go mainstream after someone created a killer app built on top of BCH. But now I realize that BCH as world money is the killer app.
But we're not going to just magically become world money by running in place. The window to become world money is opening now, and if we want to take advantage of that opportunity, we must quickly improve our infrastructure in order to provide confidence that Bitcoin Cash is a credible alternative. We must also seed the global economy with merchant adoption so that BCH becomes increasingly visible, so that people are aware of the potential solution to their problems.
Let me end this article with a snippet from Coinfugazi's recent interview of Deadalnix. The entire conversation deserves your attention, but I wanted to highlight just a few minutes that I found particularly relevant:
Amaury: "This is malinvestment at a scale that has rarely been seen in western civilizations."
Kelso: "Yeah, and so you have this weird impact where politicians are insulated, at least immediately, from their decision making so they shut down economies, whole world economies, and naturally in a freer market there would be just complete devastation, but they print themselves this pad, and then people become sort of falsely confident, and it sends the wrong signal. And maybe this is one of the lessons of 2008 is that all that funny money being pushed into say mortgages or wherever else, had businesses building too many houses, too many cars, and so on, and you kind of see this domino effect going on. And I think we're in the weird spot where you and I and others are kind of sounding this alarm again and we seem a little nuts, but less nuts than we might have seemed in 2006."
A: "Well, I remember in 2006, 2007, I was talking to people about that and ..."
K: "And you were seen as a weirdo, right?"
A: "Yeah, yeah it was like completely out of the scope of what they were thinking about, you know, but it's not as much the case now."
K: "And we're hoping I think, that by this point in 2020, that crypto would have an answer."
A: "I mean yes and no, I mean like BCH, this is what we're working on, but I see a lot of crypto is focused on yield farming, and digital gold, and whatever, and all of that is like, in many ways it's cool, but it's not civilization changing the way hard money that scales is. Because that's actually how you end that cycle, right? You want something that has the good property of fiat money and the good property of hard money. To me, that's where something big is happening. Something worth looking at. Everything else is cool, like that's cool technology, and there's definitely a lot of interesting stuff going on there. I don't want to denigrate that, but that's not civilization changing, or at least potentially civilization changing."
K: "And it just doesn't seem to answer what looks to be inevitable, or that is coming in the sense that ..."
A: "Yeah I don't see how yield farming is going to change anything to the huge economic crisis that is coming for instance. That's definitely a really interesting fundamental, right, because they want to do those dex, and they want to attract liquidity, and they build all those systems to attract liquidity. I mean that's cool, that's interesting, I don't want to, once again you know, I don't want to sound like a crazy maximalist, because I'm not, really. It's cool that some people are working on that. It's interesting stuff. There's definitely a use for that, but it's not where my attention is."
Wow