Perspective is always an interesting thing. As they say, "one man's terrorist is another's freedom fighter".
When it comes to cryptocurrency, views are all over the map. Since it is a pathway to freedom, many who depend upon the present system are against it. Some even take the view, like Jim Rogers, that crypto will be banned by governments.
This might be viable if all would get on the same page. Unfortunately, this perspective over looks the fact that often oppressors are also the oppressed.
There is usually a bigger fish wielding more power and that is the one to look out for.
Cryptocurrency is obviously a pathway to freedom from oppressive governments. Since it is currency that is not controlled by any one government, the ability to transact takes place in spite of what the government does. Control is not relegated to the borders of a nation. Bitcoin and other cryptocurrencies operate around the world in a decentralized manner, eliminating the single point of access that oppressive entities require.
When it comes to whales, none are bigger (and badder) than the United States Government. This is Moby Dick, ruling the oceans as it sees fit. For the last few decades, there was no equal meaning nothing could stand in its way. This is starting to change with Ahab showing up in the form of China, yet that will take another decade to fully materialize.
In the meantime, U.S. politicians, in their infinite wisdom, believe it is advantageous to run around the world bullying countries into behaving how it wants. Throughout history this was an effective method yet it is proving to be less so in the age of technology. Just like people can turn to these developments to seek freedom, so too can other countries.
The SWIFT network was a powerful weapon against "misbehaving" entities. Controlled by the United States, it is an ideal way to stifle an economy. Cutting a country off of this network meant severing their on-ramp to the global financial world. Suddenly a country became an island unto itself.
We see the same results all over the globe. One of the countries who finds itself in hot water now is Iran. Since it is on the wrong side of the Administration, the country is suffering the fate that befell so many others. While the Iranian government might not be known for their tolerant behavior towards its citizens, it finds itself in the same situation when facing the United States Government.
Here we see how the oppressor is being oppressed.
So what does Iran do?
According to news that is coming out, the government of Iran is turning to Bitcoin mining. Actually, they are authorizing power plants to start mining Bitcoin on a major scale. The only caveat is that the energy used cannot be subsidized. Since Iran has one of the lowest electrical rates going, the likelihood of mining at a profit is strong.
What is really interesting is that Iran is taking this step in an effort to add liquidity to its economy. Sanctions are taking a toll, with oil, their largest export, being cut off. With little backing their currency, the exchange rate for the Iranian Rial has plummeted against the major currencies. This means that what does get into the country is getting more expensive by the day. Of course, this is the idea behind sanctions, to get the populous to turn against the government through misery.
Since everything financial is freezing up in the country, Iran is turning to cryptocurrency to solve its problem. Bitcoin is outside the control of the United States and allows for transactions to occur without hindrance. From this perspective, Iran is able to interact with the rest of the world by using cryptocurrency as a payment system.
At the same time, Bitcoin mining will bring money into the country. Since exports are drastically reduced, miners can lure capital into the nation simply by amassing Bitcoin. With the price hovering near $11,000 apiece, it is possible to get a steady flow of money coming in every hour.
Naturally, this concept could extend to other cryptocurrencies that use PoW consensus. While they do not hold the same value in fiat as Bitcoin, Litecoin, BCash, and others are also available.
For some time now, I maintained that the benefits of cryptocurrency on a global scale make it impossible to stop. Since governments cannot help but to take sides against each other, we have a continual geo-political power play in operation. Therefore, someone is going to be on the losing end of that equation. Here is where cryptocurrency enters the picture.
Just like individuals within a country turn to cryptocurrency to escape the oppressive measures of their own governments, regimes are forced to turn to it to get around the actions of other governments. It is a continuing cycle where those in power are trying to maintain control.
Bitcoin is not something that is often thought of as providing liquidity. In fact, it is the exact opposite. Since it has a scarcity in the number of token, liquidity is a problem. Bitcoin hodlers are the biggest hoarders on the planet, which helps to drive the price up.
However, when you are a country that has its economy squashed, a few Bitcoin coming in is a spigot that is desperately needed. With the power companies authorized to get into mining, it would not be surprising to see Iran suddenly become one of the largest mining centers in the world. With only 900 Bitcoin mined per day, the scarcity is probably going to help push the price even higher. Iran made it clear that it needs the liquidity that comes from bringing in Bitcoin.
This concept is apt to spread across the entire cryptocurrency spectrum. Bitcoin is not the only game in town, although it is the most well-known. Other cryptocurrencies are going to be turned to as oppression keeps spreading. COVID-19 provided the vehicle for major power grabs around the world. This is obviously crushing the plight of individuals yet nations are suffering at the hands of other nations.
How long until a country like Italy starts to embrace the opportunity in crypto and basically tells Germany to screw off? If things get dire enough, the Italians will start to do this.
Over the next couple years, we are going to see major problems for government around the world. There is an upcoming sovereign debt crisis which will be on a level we never saw before. The defaults that will be taking place as promises made by governments go unmet will be astounding. We are already to the point where the EU can't get financed for a pencil sharpener. This is going to spread to many countries throughout the world.
Even within countries, like the United States, muni-bonds are going to fall entirely out of favor. Confidence in governments is going to collapse throughout this decade. This means the flow of capital will shift from the public sector to private.
Where are governments going to turn to? Smart ones will embrace cryptocurrency but politicians tend to be meatheads so there will be many that completely ignore this idea. Instead, they will hold onto the old model in an effort to maintain their control. At the head of this list is the United States, a country that might already have lost the blockchain/cryptocurrency race.
Individuals will be well served to follow the same lessons. Regardless of who is doing the oppressing, there is now an alternative. If governments of the world are beginning to realize it, then it is sensible that their population will follow suit. We can conclude that Bitcoin will no longer be the boogeyman in Iran with the government endorsing the mining of it.
How long will it be before some of the Iranian people start to delve deeper into the crypto world and find out what is taking place?
Ultimately, crypto will show how it provides what the present system is lacking. We are seeing some of the green sprouts of this appearing.
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