Greetings Central PA Bitcoiners!
On August 15th, 1971, 54 years ago last Friday, the US "temporarily" went off the gold standard. This event would go down in history and be known as "Nixon Shock". Although in 1934 Franklin Roosevelt untethered gold from US dollars for Americans, and made gold holding illegal for us to hold until 1975, gold still backed dollars held by foreign nations up until 1971. Countries that had loaned the US money could be paid out in gold or USD, and USD itself was redeemable for gold in this respect. The dollar wasn't fully backed by gold from 1934-71, but there was still a connection. 1971 cut that last tie that the dollar had to a hard asset, making creation of new dollars restricted not by US gold holdings, but by the desire of a few powerful people's desire to click copy and paste. Since 1971, the dollar has lost about 90% of its value against the things we all need and want, especially food and shelter.
If you've never checked out wtfhappenedin1971.com, it's a great collection of charts that show a variety of prosperity metrics over time, and what's happened to them since we fully decoupled from gold. Hint...it's been great for the top 1%, also known as the counterfeit class, and not so great for the rest of us. Fortunately, although many of us don't control in which asset we're paid for our work, we do have control over which asset we use to save for our future.
Although it's never a dull week in bitcoin news stories, two headlines grabbed my attention last week. These headlines are relevant to bitcoin's function as freedom money, a property abbreviated as "FGU" (freedom go up). These headlines were the Bank for International Settlements (BIS) publishing a bulletin suggesting marking bitcoin addresses with "AML compliance scores", and Google announcing that all wallet apps in the Google Play store have to be licensed as money transmitters. The Google announcement was walked back a few hours later.
The Bank for International Settlements (BIS) functions as the central bank of central banks and is headquartered in Basel, Switzerland. The released a paper last week entitled "An approach to anti-money laundering compliance for cryptoassets". In it, a key takeaway was "An AML (anti-money laundering) compliance score based on the likelihood that a particular cryptoasset unit or balance is linked with illicit activity may be referenced at points of contact with the banking system ("off-ramps"), preventing inflows of the proceeds of illicit activity".
Societies learned a long time ago that for a money to work, it's got to be fungible, meaning every unit is interchangeable with every other unit. Ten $1 bills are worth as much as any other ten, or any single $10 bill. Imagine a scenario in which you go to pay for something, and pay using three $20 bills. If dollars weren't fungible, the person/company you're paying might say "well, the first $20 bill is good, but the second one has cocaine on it, and the third one is associated with a robbery from two years ago, so I'll need two more "good" $20 bills, please".
Attacking the fungibility of a money is attacking its usefulness and viability at its core. All of the counterfeit class, BIS members included, have had a say over how people can use their money, and are desperate to hold onto power. It would be a dream come true for them to be able to say that this pile of bitcoin is "good" bitcoin (ie bitcoin owned by them, ETF's, MSTR, KYC exchanges) and this other pile of bitcoin is "bad" bitcoin. "Bad" bitcoin could be defined however they want to define it: mined bitcoin, bitcoin from non-KYC exchanges, or even coins that have been dormant in an address for 10 years and don't pass their murky chain analysis could become unspendable, if your counterparty subscribes to their nonsense.
The second story regarding Google is also relevant to bitcoin's FGU property, even though it got walked back the same day. The initial announcement was that all wallet apps in the Google Play store, even if self-custody, would be required to have money transmitter licenses in their respective jurisdictions. The Play store is where the majority of Android users download and update their mobile apps, and this policy would effectively ban the wallet apps Android users have used and loved for years. All that would remain would be exchange apps like Coinbase and Strike; basically banking apps that are able to send bitcoin on your behalf if you ask them to, and if they feel like it. This was walked back shortly after, with Google clarifying that this policy doesn't apply to self-custody wallets. So basically, we ended up where we were a week ago, only that the overton window has been opened a bit wider.
Apple had banned bitcoin wallets in their app store years ago, and eventually relented. Android phones have the ability to run apps from different sources outside of the Play store, and can even install apps from APK files downloaded from a web browser. However, the lion's share of Android users depend on the Play store for both new installs and updates. What would happen if this policy weren't walked back? If you have wallet apps installed on your Android phone, they'd still be there and functional after the ban, but updates wouldn't be available, nor would new installs. Developers may continue to update their software and/or make them available through other channels, however this would raise the barrier substantially when considering the majority of wallet users. Presumably, if this were actually executed by Google, Apple would eventually follow suit and reinstate their ban. Would this kill bitcoin? Absolutely not. Would it make it less usable? Yes. Although desktop apps would be unaffected by this, sending or receiving bitcoin from a mobile phone would change a lot.
What would happen if your mobile wallet(s) stopped working? Do you have backups stored safely somewhere, so that you'd be able to import the seed phrase into a desktop wallet? A silver lining to the Google story is that it prompts us to take inventory of potential weak spots of our setups.
These two stories relay how, even though there is positive progress being made regarding bitcoin's NGU property (number go up; bitcoin's performance against other assets), there are shots being fired across the bow of bitcoin's property as freedom money. When the suits and counterfeit class cheer on bitcoin, they might be cheering for a different future than you are. They're cheering on ETF's, stocks, and other assets that exist under the control of the legacy financial system. They think that bitcoiners' ability to pay "undesirable" people, or buy "undesirable" goods can be curtailed, and at the same time their bags can be pumped. What they don't realize is how much of bitcoin's value derives from how bitcoiners value it, and a massive part of that is being able to use it in sovereign way.
Not only can your enemy use bitcoin...your enemy being able to use bitcoin makes it better and stronger for you. Keep learning, and particularly keep learning about the great tools that exist to use bitcoin in a sovereign way.
Hope to see you at one of our upcoming meetups! Monthly coffee meetup is at Denim Coffee in Mechanicsburg at 1pm on Sunday, 8/24. Bitcoin Mining @ The Park is being hosted by Business Cat at 3pm on Saturday 8/30 at Friendship Park in Mechanicsburg. And next month, we've got an education meetup scheduled for Saturday, 9/13 at the Simpson Library in Mechanicsburg, and the topic is "Stacking Sats or Stacking Shares?".
@Lonelypumpkins
Central PA Bitcoiners