This is an op-ed by Matt Smith, a US Air Force operations officer and assistant professor of aerospace studies at the University of Nebraska-Lincoln.
As the nation’s most adversarial competitors actively seek ways to de-dollarize the world while simultaneously announce publicly“the economy of imaginary wealth is inevitably replaced by the economy of real values and durable assets”, the race to accumulate bitcoins, the hardest and rarest asset in the world, is not too far in the not so distant future.
Countries will not ban Bitcoin. Instead, they will end up competing aggressively for it, and those with larger fractions of 21 million will have greater strategic and economic primacy than their geopolitical competitors.
That being said, the National Security Strategy (NSS) is a periodic document designed to communicate the executive branch’s vision and serve as a roadmap for the United States that helps Congress implement the directions set by the nation’s highest body. October 2022 NSS describes how the White House “will seize this decisive decade to advance America’s vital interests, position the United States to outmaneuver geopolitical competitors, address common challenges, and set our world firmly on a path to a brighter and more more promising”.
These powerful words not only inspire hope and promise for a brighter future for the American people as the United States strives to continue to champion freedom and democracy on the world stage, but they also recognize that if there are any missteps in the nation’s strategic interests, which could bring more darkness to a country desperate for light or, worse, cost the nation losing control of its influence world. It is imperative that the United States truly weigh all available options in order to achieve the best results that promote American values and protect the American way of life.
Digital currency can no longer be ignored
Part of the most recent NSS, under the “Trade and Economy” section, states that “(the United States) will explore the merits of and responsibly lead the development of digital assets, including a digital dollar, with high standards and protections for stability, privacy, and security to benefit from a strong and inclusive U.S. financial system and strengthen its global leadership.
Although it is labeled “magic internet money” and “death to rats“Over the past decade, the rise of Bitcoin has secured its credibility and since then has gradually made its way into committees and boardrooms staffed with members in the highest positions of influence. can no longer be ignored.The aforementioned excerpt from the NSS provides important insight into the executive’s current view on the growing importance of the development of digital assets like Bitcoin.
One of the drivers of this growing interest in digital assets is undoubtedly the US national debt, as the nation currently runs a $31 trillion deficit with no signs of slowing down. Senator Rand Paul recently acknowledged that “The greatest national security risk is our debt.after the release of a single, $1.7 trillion (or approximately 95 million bitcoins, in current value) spending package. The mountain of national debt is certainly cause for concern.
There are only two ways to fix a deficit of this magnitude: either by default through a currency reset, or by inflation. Due to the insurmountable level of debt, there is a growing need for innovation to help solve this dilemma. The path to a digital dollar is almost inevitable, as the era of 0% money rapidly approaches its expiration date and forces the transition to a new monetary system that will come into existence – a monumental shift that the world will never see. ‘has not known since the likes Nixon Shock in 1971. In 1971, instead of defaulting on its financial obligations, the United States completely changed its economic policy, ended the Bretton Woods era and removed gold from the link with the US dollar.
If history is any future indicator of what will happen at the end of the next financial cycle, the United States will likely explore an alternative economic policy, as discussed in the NSS, but this time introduce a central bank digital currency ( CBDC), or a digital dollar, to avoid defaulting on its current debt which, ironically, is a form of default.
The United States can adopt Bitcoin
However, the United States may not need to invent a national digital dollar, as Bitcoin meets the criteria detailed by the NSS. Bitcoin is the hardest form of money and offers the highest standards of protection for individuals. It’s the most stable digital asset as it continues to release a new block every 10 minutes, and is the most inclusive monetary protocol as it not only allows people with social security numbers and two forms of government-issued IDs to access its benefits, but its open source protocol grants protection and services to all, including the 1.4 billion unbanked people in the worldd while the Lightning Network promotes efficient transactions, arguably the most important dimension of a globalized economy.
As more individuals, businesses, banks, and countries are forced by the market to repay loans in bitcoins instead of notes, holders of the largest stacks of bitcoins will naturally gain more influence. Its built-in deflationary nature and absolute scarcity characteristics ensure that 100% of the work and value created by people is enjoyed and never diminished by currency depreciation. Finally, Bitcoin’s huge defense system discourages bad actors because the attack cost has become too important and thus forces peaceful and mutually beneficial agreements.
In every way, the Bitcoin protocol aligns perfectly with the core values of the United States and its national security strategy. Contrary to what some senior officials claim, Bitcoin does not pose a national security risk. Instead, ignoring the Bitcoin network would significantly hamper the ability of the United States to pay its national debt,”outsmart (one’s) geopolitical competitorsand weaken the country’s instrument of economic power, which aims to leverage the country’s wealth to influence the behaviors of others. Thus, further delaying Bitcoin adoption is a national security risk.
This is a guest post by Matt Smith. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine, the University of Nebraska-Lincoln, the Department of Defense or the United States Air Force.