Episode Details

In 2018, Gary Arndt told me, "Bitcoin is the currency of the future and always will be."

I agree. Let's answer 7 questions related to that statement: 

1. Was bitcoin designed to be a major currency?

When Satoshi Nakamoto invented bitcoin, it's unclear if he ever expected it to be a country's currency.

Instead, it seems that he envisioned it becoming digital gold. He saw it as a way to:

• Store wealth


• Make low-fee international transactions possible


• Make money that cannot be confiscated or debased by a horrible government

Nakamoto thought that it's terrible that someone who works hard to save $50,000 and keeps it in a bank, will see the purchasing power of that $50,000 decline each year as inflation devours whatever lousy interest rate the bank pays. 

Bitcoin gives everyone the ability to store their savings in the ether. It provides a bank to the unbanked. It offers a place to store money that no government can confiscate. That's bitcoin's true value.

If bitcoin never becomes a national currency, that doesn't mean it has failed since that was never its goal.

2. When countries make their own national cryptocurrencies, won't that make bitcoin obsolete?

In the 2020s, several countries will create an "official national blockchain-powered cryptocurrency." Some believe when Chinese and/or American governments make their own cryptocurrencies that bitcoin will vanish or devalue.

This is improbable.

Whatever governments will create will have all the genius and innovation of ... a government. 

Yeah. That bad.

Governments will use their cryptocurrencies to make it easy for them to:

• Tax people


• Track payments (in the name of reducing criminal payments)


• Reverse payments


• Confiscate money


• Devalue the currency by "printing" more of it

In short, government cryptocurrencies will be everything bitcoin is not. 

Paradoxically, when governments introduce such cryptocurrencies and mandate their use, they will inadvertently shine a spotlight on bitcoin. People will wonder how bitcoin compares to their national cryptocurrency. They will quickly realize that bitcoin is better overall.

As a result, some countries will make bitcoin illegal. Indeed, many countries already have banned bitcoin.

Such bans will hurt bitcoin and force bitcoin to go underground in those countries. 

Countries ban Facebook and WhatsApp. Users use VPNs and other tricks to bypass the ban. Some countries ban the Internet, but satellite-powered Internet gets around that too. 

Likewise, bitcoin users will find a way to get around bans. They're already doing that today. 

3. Which countries might adopt bitcoin as their national currency? 

It's possible that a few small countries with worthless currencies could, in a fit of revolutionary rage, decide to abandon their hyperinflated currency and adopt bitcoin instead.

Several countries abandoned their currency for the US dollar (e.g., Ecuador, Panama, El Salvador, and Palau).

Others have adopted the euro without joining the eurozone (e.g., Kosovo and Montenegro).

Therefore, when the US dollar collapses (and it will at some point), then a few countries with shattered economies may give bitcoin a shot. That's especially possible if the revolutionaries are young tech-savvy leaders. (Revolutionaries are often young.)

Big economies (e.g., Russia, China, USA, Canada, UK) are too nationalistic, proud, and obsessed with controlling their economic sovereignty to abandon their currencies. Therefore, it's almost impossible to imagine any o