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Iran adopts bitcoin to their reserves
Bullish? Bearish?
I have seen arguments for both and each have sensible grounds
Iâll start with some basic background, then my opinion
THREAD/
(it is long, so grab a coffee or tea) https://www.coindesk.com/iran-amends-law-to-allow-imports-to-be-funded-with-cryptocurrency
Bullish? Bearish?
I have seen arguments for both and each have sensible grounds
Iâll start with some basic background, then my opinion
THREAD/
(it is long, so grab a coffee or tea) https://www.coindesk.com/iran-amends-law-to-allow-imports-to-be-funded-with-cryptocurrency
1/ In 2006 the US imposed sanctions on Iran for nucleair program concerns
In the years after, the US, and other countries, impose more sanctions and Iran is cut from international bank traffic
Some sanctions have been removed, but since 2018/19/20 the US imposed new sanctions
In the years after, the US, and other countries, impose more sanctions and Iran is cut from international bank traffic
Some sanctions have been removed, but since 2018/19/20 the US imposed new sanctions
2/ Iran sees bitcoin as a way to circumvent these sanctions - for example as a way to fund import, something that has been an obstacle for the country considering international banking restrictions imposed by the US and some other countries
3/ For the record, many countries that banned any sort of financial transactions with Iran, have since lifted such restrictions and have not reinstated old sanctions as the US did so in recent years
4/ People who argue the news is bullish say that the adoption by Iran, highlight Bitcoinâs neutral borderless freedom characteristics, aside from it leading to increased network effect and simply see it as a logical step in adoption where more will follow for various reasons
5/ People who argue opposite say that it gives fuel for totalitarianism, for the US or the world to oppose bitcoin, ban it, as Bitcoin is being used to undermine power over Iran and those in power donât like to be challenged. They argue Bitcoin does exactly that.
6/ It is the discussion on freedom vs government control
Some believe Bitcoin canât exist in a world where governments are implementing digital, non scarce currencies and that those in control wonât allow Bitcoin to be used as it takes away their control
Some believe Bitcoin canât exist in a world where governments are implementing digital, non scarce currencies and that those in control wonât allow Bitcoin to be used as it takes away their control
7/ Although I can follow the thought process, if that is the path governments take, it is a dictatorial one. No American dream, no freedom. I donât see it end well once people figure out they have no freedom. Civil war would be unavoidable.
8/ Aside from that, there are more arguments to be made. One is that central bank digital currencies do not rule out bitcoin. The other is that if the US bans bitcoin, they are taking the risk they rob an entire nation of a potential future digital reserve asset.
9/ Naturally, wealth seeks assets that retain value over time. Value is a function of demand and scarcity. A central bank digital currency system canât last without a store of value, an economy canât dillute monetary base and therefor middle class forever. It would simply blow up
10/ Unless, of course, you believe the world can end up in one big totalitarian nation of nations. I find it very hard to believe this to be the case. The western world would revolt. And it raises another question: how else to store and transfer value reliably and safely?
11/ Sure, the world could go back to some form of agreement on Gold. Take the old playbook, replay it all over again. Zero freedom, full control over Gold by the banks and governments. Whoâs going to decide who gets what? How will it be divided? Surely this would be complicated.
12/ I am now reaching a point where it becomes speculative, but letâs note that bitcoin was not invented by chance. It was invented at the right place at the right time. Some stand to gain big power by pushing Bitcoin and some other countries, like Iran, see no other solution.
13/ Betting against Bitcoin, as an individual country, by banning it, is a huge risk. What if other countries adopt it, their chance to gain indepence from the dollar and US hegemony? What if the world turns out to use Bitcoin as a reserve asset in 10 years time?
14/ It is a scary thought, if you banned it, considering the scenario described above, that as the US government youâd have robbed an entire nation from the chance of owning a share of the monetary reserve future.
15/ The only way the US could ban bitcoin, to isolate Iran for example, in an efficient way, would be to come back to the point of a totalitarian nation of nations. The TNN. A global agreement to boycot Bitcoinâs network effect and attack those who donât agree.
16/ An absurd idea to me, unless the entire world suddenly manages to get along and agree. Itâs too complicated. We would be robbed from freedom in a way never seen before. No country in the world can copy Bitcoin, so naturally the race to own some started years ago.
17/ To think that these interests are not part of the war on power as it stands, is naive in my opinion. Of course, those who stand to lose from Bitcoin getting adopted as a reserve asset may try to stop it, but are free to buy bitcoin which negates the former, partially.
18/ I think that is how bitcoin adoption is establishing itself. Some will flock to it because it is simply the better solution for them now, to retain value, gain freedom or do business, others wonât take the risk on missing out, or any combination of reasons.
19/ Central bank digital currencies need a digital reserve asset eventually and as it stands, nobody has managed to bootstrap an immutable, decentralized, fixed supply digital asset with comparable network effect since Bitcoin emerged. It is incredibly hard. Bitcoin is unique.
20/ I donât see a country succeed to create a hard digital asset, simply because they are not neutral. It would not work. People wonât believe in it. Unless they make it decentralized. But why do that, if we have Bitcoin which established itself and an entire ecosystem already?
21/ So.. will the US ban Bitcoin for this? They could, but it would impose a potential risk down the road. Will the entire world ban Bitcoin? I doubt it.
Is it bearish? I donât think so
Will it increase network effect? Yes
Will the US react? Probably
Is it bearish? I donât think so
Will it increase network effect? Yes
Will the US react? Probably
22/ Letâs be real
We are talking about Bitcoin being used as a reserve asset on company and state level by some
That is a big leap forward
We are talking about Bitcoin being used as a reserve asset on company and state level by some
That is a big leap forward
23/ I want to finish with saying that whatever the response of the US will be towards Iran, I hope it will be a peaceful one. We can talk about bitcoin and money, but at the end of the day we are talking about people their lives in Iran as well.
/eof
/eof
