Bitcoin Mass Adoption Vs Parallel Resistance

What do we mean when we talk about mass adoption of Bitcoin? Is it even possible? Or is something like parallel resistance more likely?

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Episode Transcript

(00:00):
Hello, I am Cody Ellingham and this is the transformation of
value, a place for asking questions about freedom, money
and creativity. I was having dinner with a
prominent Bitcoiner recently. He said to me, Cody, we are
winning the store of value argument, but we are struggling
when it comes to medium of exchange.

(00:22):
We had been talking about mass adoption of Bitcoin, about the
different layers of Bitcoin and the different technologies that
exist. Following this, we finished our
dinner and proceeded to pay the bill in cash.
Japanese yen. The irony struck me.
What does this mean? We have the most powerful people
in the world uttering the words Bitcoin.

(00:43):
We have all time high prices andlarge financial institutions
getting involved. Yet here we are, a bunch of
Bitcoiners in an international city paying in cash.
Are we still early or is there something else going on?
Today I propose that we take a step back and ask some deeper

(01:05):
questions about how Bitcoin and money encounter each other in
the world, and where things might go from here.
I think it's important that we don't jump to looking for a
clear and easy answer, but instead to sit with the
questions, to contemplate them, to let them prompt us as to the
different possibilities and 2nd order effects of Bitcoin.

(01:29):
So is Bitcoin about mass adoption, or is it about
parallel resistance? The modern financial system is
totalitizing. That is, there are very few
inhabited places on earth where money cannot buy things.
In most of those places the monetary regime is set by the
state. There can be some grey zones,

(01:52):
though. Many years ago I was in the
Pacific island of Tonga, and there you could pay for a taxi
with New Zealand dollars, Australian dollars, or in the
local currency. There was a degree of parallel
currencies in operation, but that mostly reflected a lack of
financial infrastructure. I mean, I was just paying cash

(02:14):
after all, but that's not that much difference to my experience
the other night paying for my dinner in cash.
It's very interesting. My experience though, in
developed nations is that for the most part people are not so
worried about debasement and manipulation of money.
It's just not at the front of mind the ability to access

(02:34):
banks, have a bank account, havecredit facilities to get loans
to get an overdraft. The convenience of all of that
stuff is an order of magnitude more important for people in
their day-to-day lives. Most people again in the
developed world are are not crying out for something new to
replace their local currencies. Instead they want more of it.

(02:57):
Fiat accumulation. It's worth pointing out that the
scale of the current financial infrastructure that is out there
in the world is mammoth. Those layers on layers of
systems and relationships and businesses and software,
established banks and corporations and everything from

(03:17):
gift cards to government treasuries to export receipts
and payment terminals, It is allbuilt in service to a Fiat money
worldview. It's not just about consumer
payments. It's the entire financial
plumbing of bonds, currency issuance, international trade,
foreign exchange. It's it's all bound up in law,

(03:38):
taxation, spreadsheets, contracts, and so much more
importantly, this financial infrastructure is intimately
connected with the real economy of factories and things.
The real economy and the financial economy both reflect
each other in a sense. So our question prompts us to

(03:59):
think what does it mean to encounter such a totalitizing
system with a radical new technology like Bitcoin?
Does a case for Bitcoin mass adoption or hyper bitcoinisation
where Everything Everywhere is denominated in Bitcoin, require
us to assume the failure of modern nation States and their

(04:24):
dispensation? Does it require a collapse of
Fiat money, not just in purchasing power but in its very
infrastructure? What even is mass adoption?
Are there precedents for this kind of thing in this show?
I have talked before about hypothetical ideas of imminent

(04:45):
political change and radical reform, but what if we look at
it from another angle? What if this doesn't happen?
What if Bitcoin instead continues to exist and grow in
value, while at the same time Fiat alchemy also continues?
Can they both grow in parallel? There is enough slack I think in

(05:10):
most developed economies. That means Bitcoin is still
optional. People have the necessities and
there is rule of law. And because it's not a life and
death situation, you don't get punished for not paying
attention. Even with significant price
increases or unaffordable housesor other hardships, there is
still some sense that things mostly work right.

(05:34):
I think of the financial order alittle bit like the way legal
systems have developed over hundreds of years.
The idea of law has accumulated people's time, knowledge and
expertise to become what it is today.
Perhaps it's even thousands of years.
It is not just about what law isat the very moment in time,

(05:55):
right now, but the the entire history of jurisprudence, legal
history and precedents that havebeen built up over time.
It's an ongoing project with innovation sometimes
backsliding, sometimes crises, but in total, the thing
continues to exist and we are governed by it.
With enough effort, though, we we can push for changes to it.

(06:18):
Even in the past when there has been major financial crises that
the system in total has either been bailed out or currencies
have just rolled over into new forms.
But the governing structure has almost always remained.
They're designing your banknote.They nationalize or privatize
the banks. Oregon, adjust the rules and

(06:41):
other criteria. People's savings may be wiped
out, and of course there will beinflation, but the authority of
the thing we call the state legitimizes this and makes it
so. As they say, we are all in this
together. Even when it comes to the myth
of collapse, What? What does that really mean?

(07:03):
Have we really sat with this idea and thought about it?
Is it possible for collapse to take place and for Bitcoin to
remain valuable? Is collapse even an option?
It seems to me that in even the most difficult situations of
war, disaster or famine, people either leave or they deal with

(07:27):
it. They pick themselves up, brush
off the dust, and try to rebuildwhat they can.
This is necessarily a political project.
It's about people, institutions,communities.
The fundamental logic, at least up until now, is that the state,
money and people exist in a social relationship to each

(07:51):
other. One or the other can be pushed
and pulled, but fundamentally they all orbit around each
other. So what about separating money
and state? What does this involve?
For a Bitcoin mass adoption project to take place, does it
require engaging this social relationship?

(08:14):
Does it require recruiting the cooperation and leadership of
the state? Or do models of hyper
bitcoinization rely on the destruction of the role of the
state in our lives? Are there other ways to
understand this? What would the cooperation of
the state even look like? Large financial institutions

(08:36):
becoming involved? Having to show your ID to send a
Bitcoin transaction? Having to know your customer,
launching national strategic Bitcoin reserves.
Is it the case for that kind of mass adoption of Bitcoin where I
could have paid for my dinner atthat restaurant the other night

(08:58):
in Bitcoin, that Bitcoin actually has to become something
almost unfamiliar to us, something surveilled and
controlled. Where the idea of self custody,
for example, or being your own bank is simply not an option
that's acceptable. Or are we thinking in outdated

(09:19):
terms when we talk about the people or mass adoption?
When we when we talk about the emancipation of what Bitcoin
could mean for all of the peopleout there, are we relying on the
idea of the mass that is ultimately an outdated concept.
The mass is a 19th and 20th century thing that emerged with

(09:40):
the development of the mass media.
Getting a nation of people to dosomething is only possible when
you have a mass to propagandize.Indeed, the the idea of a nation
is only possible by forming a mass in the 1st place.
As Jacques Elul wrote, to be effective, propaganda must

(10:01):
constantly short circuit all thought and decision.
There can't be any critical thought going on here.
So what if instead of a social relationship with the state and
people, Bitcoin, true to its cypherpunk and engineering
roots, is a kind of parallel resistance, something that

(10:22):
exists outside of that relationship there, outside of
that dynamic between state and people?
What if we think of Bitcoin as existing both within the borders
of the nation state, but also within the second realm of the
Internet and the virtual world? For me at least, Bitcoin is

(10:44):
anything but mass. It is highly self sovereign,
individual, hyperlocal, hyper global.
It's well read and freedom focused, but freedom is like one
of these words that it's quite difficult to explain.
It's not really able to be put into a slogan in a way that
really speaks to what we think of as freedom.

(11:04):
It's it's a nuanced idea. When it comes to fear, on the
other hand, or other things thatare often picked up by the
state, these are much easier concepts to propagandize or talk
about. Freedom is a nuanced and
intellectual idea that for a lotof people, it's not something
that they really encounter. It's not something that can be
declared the way the state can issue an order overnight or to

(11:28):
tell you to do this or to do that.
It is fundamentally an optional thing.
It is opt in, Bitcoin is exit. And so do we need to step away
from our ideas of the people. These this kind of idea of a
democratic social project where everyone is involved in that

(11:51):
there is an opportunity for everyone.
And instead be a little bit morecoolly critical of this and see
that for a lot of people, they simply don't want it.
Maybe Bitcoin, looking at it from another lens, is something
for those who want it, and simply those who don't want can
continue doing what they're doing.

(12:12):
The people who don't want it perhaps have reasons that we
might struggle to understand even today.
I guarantee there are people, you know, certainly people I
know who I couldn't even give them Bitcoin.
They just don't want it. It's a world.
It's a world view that I'm not willing or ready to accept.

(12:34):
We might think in our pride thatit's just a matter of time
before Fiat currencies collapse and that those unbelievers are
not going to make it, that they will have fun staying poor.
But again, have we really considered what is meant by
those words? Have we looked in the mirror
when we asked that kind of a question?

(12:55):
What happens if they don't choose to use Bitcoin?
A financial collapse without thephysical collapse of the real
economy simply means the state will step in, change the rules
of Fiat and roll over into a newcurrency in the much more
unlikely scenario that there is some natural or man made

(13:17):
disaster that wipes out the realeconomy.
It is fanciful for us to think that people are going to be able
to use computers and digital money in that kind of situation.
Is it much more likely that overthe long term most people are
just not going to choose Bitcoinbecause, well, we never quite
hit the critical pain thresholdsthat make them change their

(13:39):
actions? Is there enough juice in the
system that even if things get worse, the marginal citizen is
still not motivated to look for real alternatives?
I wonder if we ever get to coming close to this kind of
pain thresholds that in fact thestate emerges with some form of

(14:01):
new Fiat alchemy. What if the state recognizes
that there is unease and adjustsitself to the changing reality?
Perhaps they may even include some kind of underwriting or
backing of their Fiat money withsomething like Bitcoin to at
least give the illusion of stability.
But as mentioned earlier, perhaps this comes in a way that

(14:23):
is neutered or limited compared to what we know as the freedom
orientation of Bitcoin. Perhaps in that kind of
situation, the state will develop some new mantra where
people are asked to forfeit someof their savings or reduce their
quality of life or opt into somenew draconian system.

(14:45):
But it is for the greater good, of course, you know, we, we live
in a society after all. I'm thinking of CBDC's here.
I mean, an instant bonus if you scan your eyeballs and sign up
now. It would be pretty appealing to
a lot of people. I think ultimately we we must
recognize that it is in the bestinterests of the state to let

(15:08):
its citizens, at least nominally, have something.
Despite how it may feel sometimes, there is a lot of
ruin in a nation. That is to say, no matter how
bad things seem, we still have alevel of infrastructure and
capital goods today that has never been before seen.

(15:28):
So what if on the other hand, though we we look at Bitcoin as
parallel resistance money. Perhaps we don't need to commit
our minds just yet to hypothesizing some grand post
political post nation state world.
We don't need manifestos or political action to push back

(15:51):
against the state from a place of a social relationship.
Instead, we can just use Bitcoinwhere we can, as we are
currently doing according to itsfundamental properties that we
all know. Value will continue to
accumulate in hard money. The number will go up.
If someone is willing to take our Fiat.

(16:13):
Are we not happy to get rid of it?
In parallel resistance, we can choose to spend self sovereign
money with people who actually want it.
We can continue to have the freedom to criticize the
existing financial system and think outside of its bounds
while also making use of it where we can.

(16:33):
In a sense, as Fiat loses value to Bitcoin, that system is
working for people who have Bitcoin.
Is there some equilibrium point,perhaps just like landlords and
tenants, where some people have Bitcoin and some people don't?
How does a parallel system interface with a total system?

(16:55):
At what point does it get out ofbalance and there really is some
massive disruption to the socialrelationship?
Or can it continue indefinitely in a way that is extracted for
one party, that is the people who have Fiat and incredibly
bountiful and productive for those who have the asset, the

(17:16):
money that we call Bitcoin? What examples can we dive into
history where this kind of thinghas happened?
What was the political frictionsand challenges that came up
along the way? What key things needed to happen
on these examples that can we can perhaps learn from?

(17:38):
Is reform possible, or does the legacy financial system indeed
need to be completely dismantled?
But doing away with it? What do we lose along the way?
Is that not the case, that when one power structure is removed,
it simply creates a vacuum for another to fill?

(18:02):
Are we really willing to entertain the offhand comment
that financial collapse is inevitable when in all
likelihood such a thing would infact be the worst possible
outcome for everyone, including Bitcoiners?
I don't know. What is the reform path?

(18:24):
What is the resistance path? What is the revolution path?
I hope we can go deeper to ponder these questions.
It is not just a code base. It is not just static.
Bitcoin is alive. It is fundamentally about social
relations. I think Bitcoin is a project
that is based on people using it, talking about it and

(18:46):
building upon it. I would really like to hear what
you think though, if you've got any books or article
recommendations. I love reading and thinking
about this kind of thing. I I really enjoy thinking about
it, looking at it from differentangles and and understanding the
big question, what is the transformation of value?

(19:07):
Thank you for listening. I am Cody Allingham.
If you have any questions or thoughts at all, send me an
e-mail at hello at the transformation of value.com and
I will get back to you.