The World Just Witnessed Bitcoin's Moon Landing Moment

We’ve Been Here Before

Any project or program of this world worth its salt is painstakingly challenging, risky, at times demoralizing as well as euphoric. The Apollo program of the mid-twentieth century is the most notable Western example of such a challenge. The program meant many things to many different people while reflecting numerous characteristics such as and not limited to:

  • challenging one ideology over another (capitalism over communism),

  • rallying people towards a common objective and goal (the US population),

  • pushing the realm of scientific / technological achievement (aerospace), and

  • offering inspiration where it is needed (hope in a time of [cold] war).

What Just Happened

Bitcoin just had it’s metaphorical “moon landing” moment. Yesterday (June 5th, 2021) the legislative equivalent of El Salvador’s government passed a bill into law that declares Bitcoin as legal tender. The bill comes into effect in 90 days. A synopsis of the some of the bill’s components state:

“I. That according to Article. 102 of the Constitution of the Republic, the State is obliged to promote and protect private enterprise, generating the necessary conditions for it to grow national wealth in the benefit of the largest number of citizens. … … … V. That in order to promote the economic growth of the country, it is necessary to authorize the circulation of a digital currency whose value obeys exclusively free market criteria, in order to increase national wealth for the benefit of the greatest number of inhabitants.

Article 2. The exchange rate between bitcoin and the dollar of the United States of America, hereinafter dollar, will be freely established by the market.

Article 3. All prices can be expressed in Bitcoin.

Article 4. All tax contributions can be paid in bitcoin.

Article 5. Exchanges in bitcoin will not be subject to capital gains tax like any legal tender.

Article 6. For accounting purposes, the dollar will be used as the reference currency.

Article 7. Every economic agent must accept bitcoin as a form of payment when it is offered to him by whoever acquires a good or a service.”

I encourage you to read the bill’s full translation here.

So how is this a Moon landing moment you may be questioning. Well using our framework established earlier it is as such:

  • challenging one ideology over another (fiat money over hard money);

  • rallying people towards a common objective and goal (the Bitcoin community);

  • pushing the realm of scientific / technological achievement (payments technology); and

  • offering inspiration where it is needed (value of time preservation with respect to inflation).

Implications and Consequences Going Forward

While I won’t go into too much depth as there is a lot to unpack here, I’ll give the high level of the various order consequences that can e expected in the coming months:

  • the return to hard money, El Salvador is the first foreign sovereign state to offer an alternative legal tender with a scarce and fixed supply along side the primary fiat currency (they use the US Dollar);

  • preservation of the time energy of its people; the population of El Salvador may now freely hold a form of payment that cannot be manipulated by any one central body (i.e. bank), thus helping to preserve their wealth across time and space (Bitcoin has a terminal inflation rate of 0%, by design);

  • lower remittances for the people of El Salvador who receive international payments from family members, that are subject to exceptionally high fees through legacy financial services;

  • the alignment of a monetary policy based on science that is congruent with the deflationary forces offered by the abundances and reduced costs associated with technology;

  • the geopolitical fall out among global economic super powers, El Salvador is the first country to make this decision and will certainly not be the last. This decision will without a doubt ruffle the feathers of political figures globally that use the fiat currency system (literally every single country) as this decision to use a fixed money supply indirectly challenges a century of Keynesian economic policy favoured by political forms of all spectrums and ideologies the world over.

    • As more adoption continues, we should expect greater political tensions to emerge between world super powers as well as increasing civil unrest internally due to the shifts in the economic balances of power on a global stage;

  • increased adoption by non-sovereigns; legal tender status will start to require companies and organization operating in El Salvador to have to accept payment in the form of Bitcoin, including existing international companies operating in El Salvador;

  • increased technology and investment in this space as entire new industries will emerge around this change in order to serve its adoption and growth.

Closing Thoughts

I wish I had more time to write about this; but the day calls. The implications of this moment cannot be understated, this is really a huge geopolitical shift with consequential changes that are global if not down right epochal in scope an magnitude. This is a big victory for the people of El Salvador who now have a means to emerge onto the world stage in manner that preserves their nations wealth across generations while free from corruption and manipulation of central banking authorities, and the need for middle men to control the keys to their economic prosperity and freedom.

Congratulations to the Bitcoin community and in this moment the people of El Salvador. The world will be watching you and looking to your guidance in the years to come.

Josh L-JComment