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Bitcoin, From Revolution to the Establishment


There was a time when plenty of bitcoiners didn’t even know who the Fed was, except that it causes inflation.

Now, plenty of bitcoiners are in Wall Street offices – or their bedroom – keeping an eye on things like PPI, CPI, employment, unemployment, other central banks, quarterly earnings, GDP data, oil and gas, geopolitics, politics, and many have learned what’s an ETF, ETN, ETP, and who the F is SEC.

They’re also now learning about these bonds, and the fact there’s corporate bonds too, there’s commercial paper, there’s repo and even reverse repo, and for some reason we care one bit.

The value of the dollar is zero, of course, but bitcoiners are now almost obsessed with dollar related data and measures to see just how quickly it goes to that zero.

In one way, you can say this is what a successful revolution looks like, a very peaceful one. From rabbles to the center of power, just one pillar among a few.

Others might say that dilutes the identity or the focus, but what exactly was the goal? An alternative, a code based monetary system, outside banking and national fiat, though not an isolated island.

There may have been more ambitious goals, replacing the dollar entirely. But that’s not something you can force or even desirable if it isn’t a very smooth transition because no one wants chaos, especially in our own lands.

That ambition instead is more a backup if the dollar or any other national fiat currency does fail due to its own volition, as it may.

Also it’s an ambition that has now been taken up by central banks themself who announce pilot after pilot of blockchaining their fiat to the point SWIFT is now creating a bridge between these national blockchain fiats, or CBDCs as they call them, to connect them.

Not the same you might say. They’re watered down, lacking key qualities, like self-executing open source permissionlessly publishable code or indeed unmanipulatable tokenomics.

But, that’s so much the better because we don’t even have to compete then. Instead we can benefit from the expansion of blockchain coding skills, while staying as a backup in case something does go wrong in their systems.

Some of course in long times gone thought bitcoin might even replace governments, but just how code does that at our level of advancement, is anyone’s guess.

Yet the view in some of the bureaucracy of the US government seems to still have a little hurt feelings with the Comptroller of the Currency, Michael J. Hsu, providing a curious spectacle in two speeches earlier this week.

I’m a sceptic, he said, but that doesn’t mean there isn’t innovation or something going on in crypto, but we should try and slow it down because of systemic risks, but we shouldn’t stop all integrations between crypto and banking, instead we should ask banks to tell us, give us crypto data, and ask for a license.

A nice dance to leave us sufficiently confused on whether to criticize or applaud or be neutral to the point we decided to just not cover it at all.

Likewise we’ve ignored plenty of regulation, regulation, regulation proposals from G20 to OSCE (we have to learn of this now as well?) with one saying they have to get in before the crypto winter thaws. So, while the public is not watching?

How kind. We’re all nice, trying to contribute, and they all act like it’s some rabbles at the gates when millions of crypto dollars flow to a lot of the candidates, as donations of course.

Not that it is much new, the internet went through something similar, and now the internet is these tech giants that rule in their own way.

Not before a Chinese firewall however, and they learned how to cut it off at the national level, a lot of hacks of course on the way, there was even this whole open source diplomacy files – though just for US diplomats – that ended up with prison for some.

But, no one can even remember what was the top company before Google and the whole tech wave, something like JP Morgan or Shell.

That too was a successful and peaceful revolution, because the revolution was of an industrial kind, although with political elements but only in as far as empowering actors, rather than political in itself.

We watch all that and naturally wonder whether we can avoid the same monopolization, not at the protocol level but at the surface level because the internet is still very decentralized, just quite a bit more concentrated in attention and services than it used to be.

A key problem here seems to be that regulation, that bureaucracy, which seems to be not open for debate.

The US one. They’re all different, but decisions are being made by unelected mostly men, subtle and borderline decisions that nonetheless have an effect in regards to whether the trajectory will be towards attention monopolization we’ll call it, because at the end of the day the only thing Google has is attention.

The Securities and Exchanges Commission, for example, is unwilling to discuss whether regulations designed a century ago during the wave of communism in the Big New Deal that established an alphabet of agencies and concentrated significant power in the bureaucracy, whether such regulations are fit for the digital age and whether a balance needs to be struck to move carefully when it comes to a very new innovative space.

Because the involvement of SEC now in a rigid manner will guarantee such monopolization, although not for another decade or two as the network is global and open source.

That’s especially when the chair of SEC, Gary Gensler, appears clueless about some aspects, like what is DRS.

In an interview with John Stewart, Gensler said he needed to ask his staff whether Direct Registering Shares (DRS) affects the availability of shares for short selling.

The GME crowd thinks it does in particular when it comes to naked short selling, that is selling a share without actually borrowing it, something they suspect happened to GME because 200% of all shares were short.

This naked short selling, as they’re learning and we’re strugglingly trying to learn as well, can happen because of things like T+2 where accounts are settled in two days, leaving a gap in those two days.

They think that DRS is like withdrawing your bitcoin from an exchange – where they can collateralize your bitcoin and do whatever they want with it, even claim in their database there are 1 billion bitcoins – to your own wallet where you control your private keys secured by the network that verifies all things.

Except DRS too is just a malleable database, and those promises to not lend your shares are still just promises, though here at least they don’t have the right to lend them unlike streetname shares – which is most shares – that are held under the ownership title of pinnacles of virtue, like JP Morgan, with the actual share owner only being a beneficiary, having a claim to it, not the legal title owner.

Technical matters, but important and few are aware of them because it is none of their business. They clean streets or whatever they do, astronaut to space. Not build financial systems through code or invest in assets as a day job.

The latter is what we do, and since a lot are affected by the decisions of those that do these things, including whether the government has any money at all, you naturally are the establishment though the new kids, the cooler kids, the ones with new ideas and even new methods.

And no one can quite say when that transition happens exactly. Afterall Mark Zuckerberg still wears a t-shirt from his earlier days when obviously he wasn’t one of these suits, but to show that he is, suits started not wearing ties and to be more casual.

In this space we still have t-shirts, but they’re colorful ones, as if like a symbol, intentional or otherwise, that we’re still not quite yet part of the establishment as such.

And that remains the case to a great extent, but we’re obviously more part of the establishment now than we were, and in many ways we’re kind of merging.

That’s an achievement arguably. The teenager, nearly 14 for bitcoin soon, is learning and maturing.

Though not quite yet, but the industry is no longer too small to ignore, and it has proven itself enough to well, be welcomed.

And although some say what happened to bitcoin that it cares about Powell, plenty are watching to see just how much it cares compared to other assets.

Because outside of the establishment, at the door, just in, partially in, or the establishment, bitcoin is bitcoin.

It’s new, and therefore if bitcoin changes, the establishment may change just as much, as like bitcoin related products are now in the stock market, so too stock related products are on the blockchain, not to mention the dollar itself in USDt or c and there isn’t much of a reason why bonds can’t blockchain either.

The actual work therefore starts only now, although scalability still has to be addressed with zk tech or whatever else, but it’s just now that this space may start proper taking off in products or services and usage.

We have entered the second stage, which we call institutional adoption but is much more wide as bitcoin and crypto is starting to become an integral part of finance with it perhaps reaching that stage where it is kind of becoming difficult to imagine the world without it.

Just imagine if we didn’t have an alternative in the current situation and people were really worried about high inflation, or in some countries galloping inflation and worse.

Instead we’re all chill, watching Powell, hodling on, criticizing when due but without much care whether they listen because we are safe and sound in our own blockchains where everything keeps running exceptionally smoothly.

And that might be one very good reason why the establishment could well be happy to have this space as it is not really a threat while it could be complementary to the other financial tools or even outcomes.

Leaving only one question: Nobel for Nakamoto when? And don’t worry, Vitalik Buterin can pick it up in his name.


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