An Existential Threat To Liberty
Ever since Bitcoin was created and began to gain traction, nations have been researching how they can harness the technology for themselves through the issuance of their own digital currency. Bitcoin is a decentralized monetary network, outside the control of any single entity. Bitcoin is not "issued" inasmuch as it's generated, based on a preprogrammed schedule by the process called "mining" where computers compete to solve a complex math problem, resulting in new bitcoin. Bitcoin is then distributed by its participants through free market trade. Central bank digital currencies (or CBDCs) seek to bastardize this. They will bring money under the direct supervision of the state, with the capacity to program how you can receive, spend, and save your government issued digital currency. The potential impact on your privacy, and liberty are clear. Let's dig deeper into the implications.
First let's explain exactly what a CBDC is. A CBDC is in essence, the digitization of a fiat currency such as the USD/Euro/RMB, etc, with improved plumbing on which this currency would operate on. Digitizing these currencies would move them into the 21st century. Current payment rails are ancient. They are cumbersome, expensive, and slow, operating on banking hours. One of the most popular payment rails is the Automated Clearing House or ACH. In 2020 it processed nearly 62 trillion USD worth of payments ranging from direct deposits to automatic bill payments. ACH typically takes 2-3 days for the payment to clear. With this technological upgrade to CBDCs, money transfers could in theory be finalized instantly. Additionally, despite what you may hear on the news, most illegal activity is conducted using fiat cash currency - approximately $1.6-$4 trillion of fiat currency was connected to illegal activity in 2020, whereas only $10 billion of cryptocurrency was. With the implementation of CBDCs, and the elimination of cash, transparency and supervision would be vastly improved, and thus theoretically would cut down on crime. You may be thinking, isn't this an article about the "existential threat" of CBDCs? This sounds damn good to me.
The issue lies in that, the same transparency and supervision that would be used against criminals, can, and will be used against you.
Let's break this down further...as stated above, just as Bitcoin is preprogrammed to produce important aspects such as 10 minute block times, and a set inflation schedule, so too can CBDCs. The important distinction is, Bitcoin cannot be changed without the consensus of essentially the entire decentralized network of miners and nodes, and even so, the resulting blockchain would be hardforked and may no longer even be considered Bitcoin after the fact (i.e. Bitcoin Cash, Bitcoin Satoshi's Vision - a note here...these Bitcoin hardforks did not have network consensus and went on to create new cryptocurrencies worth far less than Bitcoin). CBDC programming would be entirely controlled by the government. Inflation schedules could be set, and changed at any given interval resulting in monetary units suddenly being created or destroyed - just think, 10% of your CBDC bank account could be wiped-out at the click of a button to combat the highest inflation rate in the past 50 years (see -- today's inflation). CBDCs could be programmed to allow you to purchase a set amount of "unhealthy" food such as candy, or soda, or only purchase foods considered healthy by the governing body. Furthermore, expiration dates could be set on your money, forcing you to spend in a certain amount of time to bolster the economy (a truly Keynesian idea - John Maynard Keynes actually referred to expiration stamped money as "sound").
If you think this is farfetched, China has already piloted a digital yuan, and discussed such expiration dates...you may think, well, that's China, that sort of oversight would never happen in a Western Nation. In a report titled "Central Bank Digital Currencies: foundational principles and core features" published by the Bank of International Settlements or BIS, they state: "Beyond bearing interest, there has also been public discussion about CBDC use to stimulate aggregate demand through direct transfers to the public (so-called “helicopter drops”), possibly combined with “programmable monetary policy” (e.g. transfers with an “expiry date” or conditional on being spent on certain goods)." The BIS is self described as "an international financial institution owned by central banks that "fosters international monetary and financial cooperation and serves as a bank for central banks"". These are just the freely disclosed issues that could arise with CBDCs...let your imagination run wild and we can truly understand the existential threat they pose.
These CBDCs are not going to go away, they will begin to roll out over the next decade, and will be sold as a faster/simpler/safer way to transfer money and conduct business. People will accept them because it's easier, or they are simply required to do so. With the concept of Universal Basic Income or UBI taking hold, its easy to see a future in where, recipients of UBI or other government aid are required to accept those funds in a CBDC such as a Fed coin, making the user beholden to the monetary rules of their government.
When Jefferson wrote the Declaration of Independence, he included a well known statement..."We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."...Unalienable means "not capable of being taken away or denied" and thus we have an irrevocable right to liberty i.e. freedom from control, interference, obligation, or restriction. It's time we take our right to liberty seriously, and it's time to take CBDCs seriously which are a direct threat to our liberty....don't trust...verify. Look for alternative ways to maintain your liberty...you can start with Bitcoin.
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