In an article titled “Pure Evil”, Arthur Hayes, the controversial co-founder of BitMEX, expressed his opinion about central bank digital currencies (CBDC). His article presents us with a “horror story” in the style of an Orwellian dystopia. “The best day to have bought Bitcoin was yesterday.” Nevertheless, “the ability to buy BTC will quickly disappear.”
Following the conservative and libertarian tradition, Hayes here appeals to fear to advance his agenda. Of course, there is a lot to cut around the issue of CBDCs. Yes, there are many issues worthy of discussion here. Nevertheless, What this apocalyptic and grandiloquent tone does, in most cases, is incite excessive emotionality and toxic fanaticism.. With qualifiers such as “Pure Evil”, what is achieved is to dehumanize and demonize the other. In this way, the parties are polarized. And irrationality is encouraged. How can we have a constructive debate when the other is “pure evil”?
The gold beetles have been talking for centuries about a big crash due to the rise of fiat money. I mean, things go from bad to worse because of the people in power. The future is dystopian. And the past is a lost paradise. This is a broken record that we’ve listened to endlessly for decades and decades. This is a narrative widely used by gold sellers. It is not uncommon for gold in these cases to be presented as the ark of salvation in times of crisis and debacle.
Now, many followers of this old trend have adopted Bitcoin. So, Bitcoin is new. But the discourse and feeling are quite old. This narrative is nourished by a very pronounced anti-statism and a free-market fundamentalism very typical of classical liberalism. This “idiosyncratic bitcoiner” has emerged from libertarianism, anarcho-capitalism and the most conservative right. These “militants” have not only inherited their narrative from the gold beetles. Apparently, he has also inherited his style and his paranoia.
The “idiosyncratic bitcoiner” has a huge presence on Twitter and other social networks. In fact, it could be said that this sector dominates the narrative on networks, and in the (specialized) press. For many of them, Bitcoin represents an insurrection against the state through a monetary insurrection. Bitcoin functions as a citizen currency that depowers state currencies. Being a citizen currency, Bitcoin is not subject to state control. Therefore, it enjoys a fairer and more efficient regime in terms of supply, privacy and management.
Many of these bitcoiners perceive the arrival of CBDCs as a threat. Why? Well, because CBDCs are state-controlled fiat currencies in the same league as conventional currencies. However, this time, blockchain technology has been used to create more powerful, more dangerous and more harmful instruments. So for this sector, CBDCs are not an option. In fact, they are one more reason to buy Bitcoin. I mean, the arrival of CBDCs will surely increase the importance and attractiveness of Bitcoin for the most idiosyncratic. “The best day to have bought Bitcoin was yesterday,” Hayes warns us. I mean, the wolf will be here soon.
Of course, the idiosyncratic bitcoiner is not the only buyer of BTC. We also have a coexistence user. I am referring to people who transfer monetary value using BTC out of necessity, privacy, or convenience. For these convenience users, the traditional system presents many frictions and restrictions. Y BTC becomes a solution to circumvent these frictions and restrictions. Here we could include the gig economy, the gray economy, remittances, parallel currency markets, the unbanked, among others.
With the advent of CBDCs, Bitcoin could indeed lose some users. However, it is quite possible that stablecoins are the most affected by this competition. In some cases, CBDCs are going to replace stablecoins. After all, a stablecoin can go bankrupt. But that risk, in the case of a CBDC, is significantly reduced. Of course everything will depend on the rigidity or flexibility of each project. And it will also depend on regulation in the future.
In practice, CBDCs should not be that different from today’s electronic money. However, the pros and cons of CBDCs must be weighed on a case-by-case basis. Blockchain technology allows the creation of highly centralized and highly decentralized systems. The “digital yuan” is not the same as the “Venezuelan petro”. And the CBDC of the US Federal Reserve will suddenly not be the same as the CBDC of the Sveriges Riksbank (Sweden’s central bank). Then, you have to study the advantages and disadvantages of each project on the merits of each specific project. Arthus Hayes, in his dystopia, presents us with the scenario of a tyrannical and totalitarian CBDC (enemy of Bitcoin).
We already mentioned the “idiosyncratic bitcoiner” and the “user of convenience”. Now we must talk about the “investor bitcoiner”. This bitcoiner buys BTC with the intention of growing financially. In this case, Bitcoin is not an insurrection against the state per se. In this case, Bitcoin is more of a collectible whose price fluctuates. In other words, investors make money from the appreciation of the asset.. In fact, I would be averse to say that this group is a majority sector. And, for this group, CBDCs are not necessarily a bad thing. Of course it all depends on the project and the regulations. In theory, though, it’s a good thing, because CBDDs bridge the gap between the fiat world and the crypto world.
For the investing bitcoiner, buying Bitcoin is like buying gold, stocks, and bonds. In other words, they are instruments that are purchased with fiat. And they are acquired as an investment. After all, Bitcoin is nothing more than a code in a database. The code itself is simply an abstraction with a monetary value. What happens is that this abstraction represents a rate of change. Then, trading between Bitcoin and CBCDs can be done without any problem.
Will the authorities use the programmability of CBDDs to ban cryptocurrency trading? Authorities may use the technical capabilities of technology to enforce rules and regulations. That’s true. However, the ban on Bitcoin in the United States and Europe, for now, is not raised. Therefore, the approaches proposed by Arthus Hayes in his publication must be understood as a hypothetical scenario. The possibility certainly exists. But it would be an exaggeration to propose that this possibility is a certainty. It is not something that will happen. It’s just something that could happen.
The “idiosyncratic bitcoiner” may be tempted to interpret the world as a battlefield. In other words, it is their fight against us. Our enemies are “pure evil”. And we are pure goodness. In this tragedy, Bitcoin is the salvation of the people. And the evil conspirators (governments, central banks, private banks, the media and corporations) only want to annihilate the hopes of the people to continue oppressing.
The investor bitcoiner, on the other hand, what he wants is to attract more capital. In this way, the price is allowed to rise more due to an increase in demand. If regulation helps this process, regulation is welcome. If CBDCs help in this process, CBDCs are welcome. As simple as that. We can get too far ahead of ourselves and expect the worst. But that would be jumping to conclusions prematurely. Or we can give time to time. And judge the facts as they arise.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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