The Amazingly Unique Perspective About Bitcoin
How Cynthia Lummis, an United States Senator from Wyoming, is innovating the sound of money in the heart of America.
- How big is our potential market?
- Will this market grow or shrink in the future?
- What market share do our competitors own?
When two people make an exchange, a market is formed.
Current technology is always the exchange entity. In the Paleolithic were shells and rare stones; now it is digital money.
The means are constantly changing over time; however, supply and demand are always determinants of price, no matter if the currency used is spices from ancient India or Bitcoin.
Markets are always the expression of human nature. They exist in Western societies but also in opaque countries like North Korea.
What the hell is happening in Wyoming?
Cynthia Lummis is a ranch woman from Wyoming, born near Cheyenne, and has a farm on its west side.
Lummis has a law degree and was in Wyoming state legislator department, worked for the governor of Wyoming, and now is in the US Senate.
In Wyoming, they have permanent funds that are based on extract minerals and gas from the ground. They charge sovereign taxes from that activity and invest it in a permanent fund.
The concept of that permanent mineral trust fund is for when the minerals have gone, they can still have revenue leftover in a diversified portfolio.
It’s fascinating that Loomis’ philosophy goes against the always short-term principles of politicians. Her ingenuity makes her believe in the prospect of a store of value in a long-term perspective.
The parallelism between mining minerals in Wyoming and mining Bitcoin.
Lummis saw two finite resources; the Wyoming minerals and the 21 million Bitcoin. She started to buy Bitcoin in 2013, and still, today, she thinks every person should have some part of Bitcoin in their portfolio.
The dollar is designed to worth less and less every year, she says, and if an ordinary person saves in US dollars for 40 years, that person will end up with fewer savings.
It is the first form of breaking the social and moral protocol with the American people.
Lummis’s mindset is that of a politician with a mental openness to educate and inform colleagues in the American Senate. She wants them to get to know the main concepts about blockchain and cryptocurrencies.
Lummis is fully aware that innovation in the financial industry will only benefit the American people, and the Senate must be fully informed of how this new technology works.
From a political perspective, financial innovation only makes sense if it helps people improve their quality lives, reduce inequality, and improve the tools ordinary people can use to benefit the local and national economies.
Although there are legitimate concerns about the security, privacy, and legality of the new financial instruments added to the blockchain, Senator Lummis is more concerned about China. This country is already at a tremendous advanced level of financial innovation. Meanwhile, the United States of America is used to be the center of innovation worldwide.
Original Bitcoin or regulated CBDCs Bitcoin?
One of the most critical questions about the future of digital money is not about the stable coins, but about politics.
Stable coins will simply be created by central banks worldwide, and the markets will fight each other in the future as they do now. Money is a market like so many others.
Yet, geopolitically, the conversation is different, because money is most important as a way to maintain stability and peace around the world. Hence, the importance of the dollar and the euro as the strongest currencies in the international trade.
The global population’s perception of an outside valuable asset that protects people against the cycles of bursts is increasing worldwide. At the moment, we have analog gold and also the so-called “digital gold”.
The advantages and disadvantages of gold and Bitcoin are already known, but will Bitcoin have the capability to disrupt the financial markets?
At a certain point in time, we’ll have central banks feeling threatened by an outside force. And the question is how will governments and central banks react if they start losing sovereign power.
Will governments and central banks be able to abolish Bitcoin? Will democratic states prohibit citizens from allocating part of their portfolio to an asset outside the financial system?
Or, on the other hand, will central banks and governments further monetize the consumption of money by building remote-controlled digital currencies, as China is doing?
Many questions remain to be answered. Money is being disrupted by technological innovation, but unlike the creation of electric cars, robots, or other gadgets, creating forms of money outside the system interferes with countries’ sovereignty. Rather we wanted or not, it interferes with the protection of citizens against authoritarian governments.
Money is so important for all, that innovation in this sector only makes sense if it reduces inequalities, maintains peace and security, and is a tool to solve problems like global warming, eradicating hunger, and space exploration.
Will the blockchain technology be able to protect us against repressive regimes?
Final Thought
Senate Cynthia Loomis is a fresh mind that can bring a new perspective about defending long-term wealth to the USA.
She shared the examples of Canada, Norway, and Vietnam. They are creating funds to protect citizens from these cycles of boom and bust. Cycles that continue provoking tremendous stress and inequality since central banks started their activity in 1913 by the hand of president Woodrow Wilson.
The world debt reached 277 trillion dollars in 2020. It took 185 trillion dollars of debt in the last twenty years to produce 46 trillion dollars of GDP growth.
Technology advances will pressure on these debts, with artificial intelligence and deep learning causing enormous deflationary stress on the global economy.
What we may be about to see is an unprecedented financial catastrophe.
So, the big question is whether financial innovation will be the salvation of the system or the accelerator for the total collapse.
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