On the eve of Halloween, the Bitcoin whitepaper turned 11 years old. Quite how a once flippantly ridiculed cypherpunk’s curio journeyed to spook the establishment into embarking on a digital reformation of the monetary system is beyond bewildering.
Chinese President Xi Jinping’s rallying call to the nation, emphasizing the importance of seizing blockchain’s innovation potential across various sectors marked a seminal moment in the global race for blockchain adoption.
He lauded blockchain as an “important breakthrough for independent innovation of core technologies” and noted its potential in, inter alia, “solving the risks of banks.”
“Blockchain will play an important role in the next round of technological innovation and industrial transformation. We must take the blockchain as an important breakthrough for independent innovation of core technologies. We must clarify the main direction, increase investment and accelerate the development of blockchain technology and industrial innovation.”
The speech marked a volte-face in the country’s long-standing disposition towards blockchain. It was also the first time that a leader of one of the major economies publicly endorsed blockchain as pivotal to technological innovation.
Illustrating the exigent intent in this paradigm shift, the ruling Communist Party’s PR wing, Publicity Department of the Central Committee (CCPPD) released numerous instructional videos on the basics of blockchain. The CCPPD, which used to promote anti-blockchain propaganda, was also now actively removing all online content depicting blockchain as a scam.
Just as the bears began snuggling down in anticipation of another crypto winter, a jolt from the East roused the bulls into frenzied action. China’s eternal president had thrown his weight behind blockchain, they all giddily rejoiced. But wait! He pointedly omitted any mention of Bitcoin. Why?
A few days later, likely in response to manic market reaction, the CCPPD advised the Chinese people not to confuse glorious blockchain with bête noire Bitcoin, a purely speculative asset devoid of real value, making it clear that this wasn’t so much blockchain adoption as co-option.
China has little interest in blockchain to the extent that it allows decentralization of wealth creation and distribution. China’s blockchain zeal is limited to blockchain’s ability to enable more efficient capital control and invasive state surveillance.
China is not alone in this Machiavellian pursuit either. Others will likely join this race to co-opt blockchain to perpetuate the ruinous, debt-financed fiat fiasco we’ve been riddled with for nearly five decades.
Lawmakers in the US have been pushing the Federal Reserve to digitize the dollar, with even greater urgency now we should expect. The ECB has dallied with the idea as an alternative to Libra. The world’s fastest-growing economy, India is also mulling over a sovereign digital currency to ward off the threat of cryptocurrencies. A recent UN report speculated that at least 40 member nations were considering state-backed digital currencies.
These large economies, scrambling to preserve their control over the supply and distribution of money in the face of an inevitable digital currency revolution, have resorted to peddling centralized SMART (Surveillance Marketed As Revolutionary Technology) blockchains, marketing them as better iterations of Bitcoin.
Bitcoin currently best serves the interests of lesser nations, the likes of Venezuela, Cuba, Hong Kong, North Korea, Turkey, and Iran, who’re not as pre-occupied with retaining control of monetary supply and surveillance of their citizens as escaping the sharp power of US and China.
Market reaction to the news from China reaffirmed a couple of things. In public perception, the concepts of blockchain and Bitcoin are indistinguishable. Secondly, that an authoritarian central figure with no authority over Bitcoin was able to influence the market shows that Bitcoin’s maturation is far from actualization.
Bitcoin has seen off many purportedly better iterations over the past decade. The advent of fiat blockchains ushers in a new era in digital currencies featuring third-generation altcoins. The scale of their threat to Bitcoin can be summed up with two simple words,
What are we going to call these new ‘blockchains’? I suppose we need a new term. Bankchain or Boomerchain?