This is an opinion editorial by Matt Smith, United States Air Force operations officer and an assistant professor of aerospace studies at the University of Nebraska-Lincoln.
As the most adversary of the country that is actively pursuing ways to de-dollarize the world while simultaneously publicly announcing, “the economy of the illusion of wealth is definitely being replaced by the economy of real expensive goods and hard assets,” the race for the accumulation of bitcoin, the most difficult and rare asset in the world, not too far in the future not so far.
Countries will not ban Bitcoin. Ultimately, however, they will compete aggressively and those with a larger fraction of 21 million will have a greater strategic and economic advantage over their geopolitical rivals.
With that said, the National Security Strategy (NSS) is a periodic document designed to communicate the vision of the executive branch and serve as a road map for the US that helps Congress carry out the directions given by the nation’s highest office. The October 2022 NSS outlines how the White House “will seize this defining decade to advance America’s vital interests, position the United States to defeat its geopolitical rivals, address shared challenges, and set the world firmly on the path to a brighter and more prosperous tomorrow.” hope.”
These powerful words not only inspire hope and promise a better future for the American people as the US strives to continue to be a champion of freedom and democracy on the world stage, but also recognize that there is a flaw in the nation’s strategic strategy. interest, which can bring more darkness to the heavy country seeking light or, even worse, cost the nation to lose its grip on its global influence. It is imperative that the US consider all available options to secure the best possible outcome that promotes American values and protects the American way of life.
Digital Currencies Can No Longer Be Ignored
Part of the latest NSS, under the “Trade and Economy” section, states, “[the U.S.] will explore the benefits and responsibilities of leading the development of digital assets, including digital dollars, with high standards and protections for stability, privacy, and security to benefit a strong and inclusive US financial system and strengthen global excellence.
Despite being labeled “magical internet money” and “rat poison” during the last decade, the rise of Bitcoin gained credibility and since then, it has gradually become a committee and meeting room composed of members with the highest positions of influence. It can no longer be ignored. The aforementioned NSS quote provides important insight into the executive branch’s current view of the importance of developing digital assets like Bitcoin.
One of the drivers for this growing interest in digital assets is undoubtedly the US national debt, as the country currently runs a $31 trillion deficit with no signs of abating. Senator Rand Paul recently admitted that “our greatest national security risk is our debt” after releasing a single, $1.7 trillion (or about 95 million bitcoins, in today’s value) spending package. The mountain of national debt is certainly a concern.
There are only two ways a large deficit can be paid: by default through a monetary reset or inflation. Given the unsustainable level of debt, there is a need for innovation to help solve this dilemma. The path to the digital dollar is almost inevitable, because the era of 0% money is fast approaching its expiration date and forces the transition to a new monetary system to be born – a monumental change that the world has not experienced since the Nixon Shock in 1971. In 1971, instead of defaulting on financial obligations, the US changed its economic policy entirely, ended the Bretton Woods era and removed gold from being linked to the US dollar.
If history is a future indicator of what will happen at the end of the next financial cycle, the US will explore alternative economic policies as outlined in the NSS, but this time it will introduce a central bank digital currency (CBDC), or digital dollar, to avoid defaulting on debt. now which, ironically, is the standard form.
The US May Adopt Bitcoin
However, there is also no need for the US to invent a domestic digital dollar as Bitcoin meets the criteria that NSS details. Bitcoin is the hardest form of money and provides the highest standard of protection for individuals. It is the most stable digital asset because it continues to release new blocks every 10 minutes, and it is the most inclusive monetary protocol because it allows not only individuals with a social security number and two forms of government-issued ID to access benefits, but the open-source protocol provides protection and services for everyone including the 1.4 billion unbanked people around the world when the Lightning Network promotes efficient transactions, arguably the most important dimension of the global economy.
As more individuals, companies, banks and countries are forced by the market to pay their debts in bitcoins instead of notes, those with the largest stacks of bitcoins will naturally gain more leverage. Its built-in deflationary nature and absolute scarcity feature ensure that 100% of the work and value people create is enjoyed and will not diminish through monetary debasement. Finally, Bitcoin’s massive defense system discourages bad actors because the cost of attacks has become too great and thus forces peaceful and mutually beneficial agreements.
In every sense, the Bitcoin protocol is perfectly aligned 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. However, ignoring the Bitcoin network will hinder the ability of the US to pay its national debt,” outmaneuver. [its] geopolitical rivalry” and destroy the country’s economic instruments, which aim to increase the country’s wealth to influence the behavior of others. Thus, further delaying the adoption of Bitcoin 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.