This is an opinion piece by Kelly Slaughter, associate professor of professional practice at the Neeley School of Business at Texas Christian University.
With the election looming next month, finding common ground between liberals and conservatives is nearly impossible. But there is one topic that should unite red and blue voters: keeping bitcoin safe from government regulation.
To illustrate this case, compare bitcoin to a potential central bank digital currency (CBDC), currently under consideration as recommended by a recent White House report. A CBDC does not provide all the benefits of bitcoin while introducing new risks.
The appeal of bitcoin and other cryptocurrencies is that they are not subject to central decision making. With a CBDC, the government could freeze digital accounts. As a replicated system, transactions between bitcoin holders cannot be restricted. Inspired by the same fear of having the accessibility of your assets at the whim of any ruling party, red and blue should accept the benefits of a platform without a selective “off” button.
The White House report indicates that a CBDC could promote financial inclusion and equity by enabling access to a wide range of consumers. Bitcoin is better placed to do this. About 5% of US households are “unbanked,” that is, they don’t have a savings or checking account. The two main reasons for being unbanked are failure to meet minimum requirements and lack of trust in banks. Bitcoin does not require any minimum balance and does not require trust in any government institution.
Indeed, the greatest adoption of bitcoin is in the poorest countries with high rates of unbanked households and high institutional distrust. The possibilities for social good such as direct transfers are immense. Liberals and conservatives may approach this subject from different angles, but both see the value in providing financial infrastructure to those who do not have it.
Bitcoin is the most transparent financial system ever introduced and no central authority decides what is transparent and what is not made public. Anyone can access historical and current Bitcoin data. Even the code running Bitcoin is open for public scrutiny, including what changes were made and when.
The opportunities to take advantage of this transparency are immense. What if you paid your taxes to a government bitcoin address? What if sellers were paid in bitcoin? What if the government and suppliers had to publicly share their addresses? We would have the most fiscally transparent government ever run, responsible for both the blue and red sides of the aisle.
There are a number of legitimate criticisms leveled at bitcoin. When it comes to energy consumption, proponents and critics agree that reducing energy consumption is a valid pursuit. We can then recognize the progress made in the transition to green mining.
What about scam and illegal activities? Bitcoin proponents are keen to tear this type of activity out of the system (but to be fair, what’s the standard for an honest system? Are we asking more of Bitcoin than other systems?). While transparency alone can combat dishonest activity as seen in the legal seizure of cryptocurrency, many Bitcoin proponents want to work with the government to introduce reasonable regulations.
Bitcoin is experiencing significant volatility and speculation. This is not behavior we want in a currency and a problem recognized by all bitcoin advocates. But we analyze bitcoin from a 2022-based perspective as if the nature of money is static. In the history of our country, we have accepted foreign currencies for official expenses and allowed banks to print their own currency. The idea of what money does and how it behaves is changing. Bitcoin is just over a decade old, and if allowed, it will also evolve based on our technical, economic, and social preferences.
Bitcoin does not replace the US dollar, it is an alternative. We accept the USD as an alternative currency, officially and by custom, across the world. Barter without currency is always legal. We recognize a number of ways for people to transact. The red and blue parties recognize the value of having financial options – bitcoin is another option with unique benefits.
Opponents of bitcoin argue that bitcoin has no intrinsic value, unlike a government-backed fiat currency. But what is our government if not an agreement between citizens? As a result, citizens have the power to agree to recognize bitcoin as a medium of transaction. With supporters on the right and left, let’s agree to let bitcoin continue to evolve as a voluntary way for parties to choose to do business.
This is a guest post by Kelly Slaughter. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.