Former U.S. President Donald Trump condemned Bitcoin and other cryptocurrencies, saying, “I want the [U.S] dollar to be the currency of the world–that’s what I’ve always said.”
Not only that, but, in the same interview which he had with Fox’s “Varney & Co.”, Trump said that Bitcoin “just seems like a scam”.
These remarks are not surprising. Trump is a member of the legacy system of finance. He grew up in a different generation. It is common for members of the older generations to not be open to the revolutionary idea of a new form of money which lacks a central governing authority. Of course, there are notable exceptions, like Trump’s personal friend Robert Kiyosaki, who said, “Money without borders and without government control will change the entire world. Blockchain may take us out of the Information-Age and bring about the Decentralized-Age.”
In addition to his old age, Trump also is an economic nationalist in other areas, like when he would impose tariffs in order to incentivize Americans to purchase more expensive products that are made in America.
It is clear that Trump values American dominance more than he values individual liberty, especially on the economic front.
It remains to be seen exactly how much the Biden Administration will be attempting to suppress Bitcoin, but one member of his team—Treasury Secretary Janet Yellen—has openly declared intent to persecute the use of cryptocurrencies. Yellen said back in January, “Cryptocurrencies are of particular concern. I think many are used, at least in a transaction sense, mainly for illicit financing. And I think we really need to examine ways in which we can curtail their use, and make sure that anti-money laundering [sic] doesn’t occur through those channels.”
But what is a cryptocurrency and why should I care?
Find out in this episode.
What is a cryptocurrency?
A cryptocurrency is a type of digital money, especially one that uses cryptography and decentralization to make sure that you can only spend each unit once and that you can only create new units after performing some service to the community.
You might ask, “But if I use digital US dollars already, what benefits do I gain by using crypto?”
There are many problems with the US dollar, which crypto can solve. Since this episode is an introduction, I will focus on Bitcoin—the “original gangsta”—and the solutions and limitations which it offers.
First, let’s analyze fiat currencies, like the US dollar, the euro, and the Chinese yuan.
Quantity of new bitcoins created is determined by an exponential decay function.
Pseudonymous. Instead of using your real name, you use your public key. But beware: as soon as someone is able to link your public key to your real identity, your entire transaction history for that wallet is revealed.
If you can understand the code, it is trustless. However, those who cannot read code must trust the code itself. However, they still do not need to trust any third party.
If private keys are well-hidden, Bitcoin can be extremely difficult to be confiscated by authorities.
Easy to send Bitcoin to anyone’s wallet, regardless of where they are in the world.
Transactions are irreversible.
Transactions can be completed despite what governments, banks, and other institutions think.
Keep in mind, Bitcoin is the first cryptocurrency as we know it. Obviously, there are a TON of improvements that have been made to the concept. That’s why you see many different types of cryptocurrencies, from Bitcoin, to Bitcoin Cash, to Ethereum, to Litecoin, to Dogecoin, to Marscoin. Each of these cryptos has its own set of pros and cons, which I hope to address in future episodes.
My challenge to you all this week is to do a self-assessment of your own financial situation.
“If the dollar were to go into hyperinflation, would my family be prepared?”
“Is crypto a viable alternative to cash and card payments?”
“What if the government were to seize my entire bank account tomorrow through civil asset forfeiture? Would my entire net worth be down the tubes?”
Then decide what you should do NOW to prepare yourself for when trouble comes.