Bitcoin And El Salvador: Gordon's Perspective On The Arguments Of Decentralization

Bitcoin And El Salvador: Gordon's Perspective On The Arguments Of Decentralization

By BitcoinGordon | BitcoinGordon | 13 Jun 2021


Bitcoin Maximalism... Bitcoin Maxi's... Toxic Bitcoin Maxi's...

Boy oh Boy it's been a salty week in crypto. But, it's okay. Sometimes when communities dig in, express their passionate positions on ponderings of particular points (px5), we get to see the real eye-openers that I believe help introduce new people to crypto, but equally as important, to help people form their real, genuine perspective about crypto.

Sure, for years, there have been disputes about whether to HODL or trade, whether to solely "stack sats" or diversify into numerous alt projects, speculations who the real Satoshi is, whether Ethereum is "the Bitcoin killer" or even the world supercomputer. All of these things will likely surface time and time again. I love 'em. They are a part of our culture. They get burned into the subconscious of true cryptonians.

But here's the thing: communities are becoming increasingly divided, turned into camps, extreme "doubling-down"isms that pit tribal groups against one another, where it would seem logical for cooler heads to prevail. Similarly, the crypto extremist groups will place those who can see the space for its diverse points of view, into a camp of their own, the "sitting on the fence" crowd. It's hard to form alliances when it becomes intimidating for the online, social process of "being" crypto, not just experiencing the culture surrounding, to mean dancing around cancel culture, "if you're not with us, you're against us" and many developing phenomena in the space.

Then, there are the true underlying issues that divide our walk with crypto, and though Gordon has spoken to these things since he first decided to "go all in" on this crypto journey, we are now seeing the entirety of the benefits and risks play out on a global stage. Crypto in the hands of private collectors, private wallets, protecting your own keys, silently stacking, celebrating the option to opt out of centralized, traditional banking, cheering each other on through the highs and lows of an entirely new asset class. Now, we have governments increasingly weighing in, trying to define us, to protect the investor, to classify coins, securities, commodities, the monthly China ban-hammerings, the FED weighing in, reports now coming in regarding the state of statehood, CBDC's defining central banking's stablecoins, deepening of strict enforcement on tax codes in desperate shifts towards higher grabs for power.

What are these things going to do to the actual crypto market? Where does this go regarding our freedoms to trade, think, store, buy, sell, and exercise privacy as a God-given right?

All of these things are good, in a sense, because they expose the true nature of our governments, nation by nation, and to a greater degree at the global level. We can see the spread of those governments who may truly recognize the benefits of crypto to the longevity of their future, potential growth in wealth and power, surprisingly, possibly even the benefits to their citizens, and in contrast the super-powers that are always worried about something that can limit their grip on the flow of wealth outside of the tightly confined nature of organized finance.

In essence, we see the world's governments starting to form their own cult-like camps, pitting the voices of freedom or hope, against the big-brother-like clingings of mongers for the old ways of doing things; grasping for more control, more regulation, more surveillance, more data mining of citizens.

Here we are, at the precipice of arguments as old as time, and the merging of new technologies that can both benefit the old regime, and break our ties completely, in a move towards new frontiers. The remarkable thing, is that we are likely going to see both of these take effect in some form of ironic symbiosis.

All of this brings us around to the topic of decentralization.

It is my personal position, that there is no such thing as decentralization, but in every coin and token designed to take some advantage of blockchain technology, there is a measure of programmed decentralization designed to benefit us in ways that break from the old, replacing it with security, privacy, efficiency, validity and immutability.

The working-model of decentralization is in a ledger shared across a network, using PoW, PoS, PoH and a myriad of evolving techniques to verify and validate that a transaction is what it is, and does what it is designed to do. Under those conditions, we ideally have a basic structure that eliminates the middle man, which is crucial in recognizing both the threat to bankers, insurance mongers and governments, and also an entire new set of challenges in distinguishing exactly who is involved in such a network.

Let's focus on Bitcoin, because it is the top dog at the center of current debate. You can tell what centralized power fears the most, when you see what enemy they focus on the most. In this case, Bitcoin is dragged through the mud over energy use, climate change debacles, ransomware, Chinese involvement and market manipulation, and now the potential freedom alliances of nation-states. In particular, the announcement that Bitcoin has now passed in law, to become legal tender in El Salvador, much to the dismay of foreign powers and angry paid mercenary journalists who wouldn't know how to obtain a scoop if their lives or livelihoods depended on it.

Bitcoin is designed to be peer to peer, protected by a blockchain that generates algorithms to be solved in order to win blocks mined for minting coins. Difficulty is part of Bitcoin's safety protocol, and increasing this is part of keeping things decentralized in an organized fashion. All elements, as simplistic as they are, are remarkably well thought out, and the pacing of such requirements means that in addition to being aware of energy use, the creator also knew it would be wise to buy the time needed to increase energy solutions for securing the future network difficulties.

El Salvador has citizens who need a direct, fast payment system with less fiat control and built-in inflation. Since there is no property tax and the use of Bitcoin in El Salvador will not incur capital gains taxes for transacting in Bitcoin, there is no incentive to hide one's use of the cryptocurrency in commerce. The government of El Salvador is recognizing the trend of corporations hedging against the devaluation of the dollar by converting incoming profits into Bitcoin, borrowing to obtain more Bitcoin, and counting on an 11+ year record of extreme growth in value. By adding this concept to their own reserves, requirements for citizenship, and levying their natural power resources like freakin' volcanoes for goodness sake, El Salvador seems to be the country taking the first step towards extreme national confidence in Satoshi-technology. It is bold, and since none of us know the future any better than to observe the past, we cannot be certain of anything, even in our certainty of Bitcoin's resilience. Never underestimate the powers of global governance, Klaus and the WEF, the underminings from the IMF, the world-liness of the World Bank, or the B.S. of the BIS. They are power hungry, and have devised a system to always control the flow of wealth in their direction. 

The debate over where the present of crypto, becomes the future of crypto, is now evenly divided among the powers that wish to control it, regulate, limit access, and suppress the reach of this movement, and those siding on embracing the qualities found in the asset class and the potential wealth-stability that can result. But, many are fearful that these alliances, as good as they initially sound, may be steeped in yet another form of centralization.

A country is a country, whether it is big or small, strong or weak, wealthy or poor. Bitcoin has never been viewed as an element to be adopted by countries, but largely as a means to succeed beyond the limitations of government. What does it mean when the government itself, can become the catalyst to bring the mass adoption we've all waited for, for over 10 years now?

There are endless angles from which to view this, but to prevent the myriad tangents, let me just say, that understanding the difference between centralization and decentralization requires getting very specific. To the same degree that democratic voting could represent a population who all remain completely individualistic in their singular choices for who to vote for, but usually instead we have huge clusters joined together in movements, often manipulated to choose one extreme over another. Similarly, while a network can be incredibly diverse, lacking any centralization, where every person running a node, and everyone with a mining operation is a stranger unto themselves, with no motivation other than to contribute or get paid. But, in truth we know that the network, though spread across thousands of processors, does tend to centralize because individual mining is too difficult to compete against large multi-million dollar operations. The necessity speaks to joining mining pools, adding power to centralized operations, moving to centralized locations with the best weather, cheapest energy, and for long we've all had our eyes on Chinese govt. manipulation of mining markets, as we enter yet another ban.

Often, people focus on the actual creators, developers of a token project, as being too centralized in their control of that project, but often this centralization from a team is required, in order to properly implement a system of governance and protections against unwanted centralization in the system. One could probably see, that in many ways a great measure of centralization is exactly what is needed, in order to provide decentralization.

So, to be fair and accurate, what we want the most out of crypto decentralization, is the ability to remove the singular power from overseeing processed fees via a third party, we do not want to have a bottleneck of human-controlled permissions, we do not want a network that can be solely owned by a single dictator in a single country, and it would be unfeasible for enough computing power to override the network and outperform the minority.

What about countries, then? Well, the truth is that we are going to have the leaders of countries, perhaps entire governances, weighing in with rules and regulations as much as true believers do not want this. The question is how long this network can remain untainted by government interests, as the economies of the world go through some rather negative transitions.

The economy outside of crypto is becoming more tightly controlled, with technological mergers, more belief in big government, higher taxation, centralized power. The question, is whether enough governments take a smart angle to their strategy for future proofing some kind of value in reserves. Gold will continue to be one option used by the superpowers, but it is likely going to struggle to compete with the technological gold reserve in an era where an entire generation now understands the new standard and has no issue dismissing the "it isn't real, so why does anyone believe in it" mentality. We've arrived at a digital age that is either transforming into something even more advanced, or will remain for a century beyond us. The next decade will likely define whether we continue in what I believe is a positive response to the centralization question, which is for small countries, then medium sized, larger and largest all consider valuations of reserves based in Bitcoin. It is smart on so many levels, and some even in more tangible terms.

I will surely return to this topic and especially specific to El Salvador. Being the first, they certainly deserve repeat reflections, and over time we will see whether the bold new moves are still rewarding, or if a new, negative political force shows its true colors later on. For now, there is enough to unify us, that we truly should be centralized, in embracing the political support for decentralized money reserves. If we build true allies, and the legitimization perhaps even reduces some of the true governmental sources for the very money laundering and illicit use that so concerns regulators, then we can see a gradual purification of an otherwise process of greed and fear mongering, towards building true, useful values that can be spread across the populations that need it the most.

And on that note, for now, crypto Gordon Freeman... out.

 

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BitcoinGordon
BitcoinGordon

Hi! I'm Gordon Freeman (I hear they made a likeness of me in some video game... totally unrelated... or...).


BitcoinGordon
BitcoinGordon

Welcome! This is my blog for all things crypto, from my day trading and tutorials to general crypto news.

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