Workers of the World Unite – Around Crypto
With the world reopening, and even U.S. blue states repealing mandates, how optimistic should we be? In my view, a little bit is warranted but not that much.
There are huge pressures from high places right now to institute a social credit system in the West. If your politics are wrong, or you accidentally become an enemy of the state, they can freeze your accounts and essentially starve you and your family.
This was a wild conspiracy theory last year. Now it is very obvious that this is where many governments want to go. We’ve seen many examples just in the past week.
The truckers in Canada deployed the crowd-funding platform GoFundMe and raised $9M, until suddenly the platform said that they would not distribute the money yet, pending the release of a clear plan on what the truckers were going to do with it.
Many of us immediately smelled a rat. Sure enough, a few days later, GoFundMe announced that it would not give the money to the truckers but rather to other charities of its choosing. In other words, it would steal the money.
That outraged many people, among them Elon Musk, and the Internet blew up in fury. At that point, GoFundMe returned all the money back to the donors.
Lawlessness Disguised as Law
In the next act of this drama, the truckers went to GiveSendGo, a platform that seems more independent and that pledged to give the money to the truckers. With no promotion or even a clear link on Google on where to send money, the new method raised even more money. This was entirely thanks to uncensored networks where people were sharing information.
But the story was far from over. The platform was hit with denial-of-service attacks from malicious actors and then hacked. The thing went down hard and had to be rebuilt. The data on donors was leaked to the government and then to the Canadian Broadcast Company who contacted donors under the guise of “doing a story” on the funding.
It was a clear attempt at intimidation.
The Minister of Finance got into the act and essentially declared that anyone using these to provide funding to the truckers were engaging in illicit activity — essentially terrorists. Without missing a beat, the Minister of Justice for Trudeau went further to declare that anyone who has given large figures through these platforms “should be worried” about having their bank accounts frozen.
So there we have it on record: the Canadian government has declared that it can freeze anyone’s bank account and seize the contents based on their political views or charitable actions. In the midst of all of this, Trudeau declared emergency powers that allow the government to do this to all for non-compliers, and do so without any court order.
Crypto To the Rescue
The next step in this astonishing drama: crypto. The platform TallyCoin somehow and almost miraculously navigated all the compliance regulations and became a viable way to use crypto to crowd fund, thus bypassing banks (so long as you don’t convert your crypto to dollars).
Very quickly, the platform raised $1M for the truckers. This was all put together by a group of truckers calling itself HonkHonk Hodl. That means, of course, hold crypto don’t sell.
Almost immediately, the Royal Canadian Mounted Police (Canada’s FBI) sent letters to many crypto exchanges demanding that any assets flowing through their systems that are known to be intended as donations to the truckers must be reported immediately. At the same time, the truckers are being told to leave.
Yes, all these actions are clearly political, clearly totalitarian, and clearly relying fundamentally on the control of finance to shore up regime power and crush political opposition.
Yes, crypto can help bypass the system, but it still must deal with three huge barriers: 1) the exchanges and platforms deal with enormous burdens in regulatory compliance, 2) the onramps to obtaining crypto are ever more intrusive, 3) the offramps to moving crypto out of digits and into cash are highly regulated.
None of this is the fault of crypto. It is a failure of the transition.
Amidst all this, I’m watching very carefully for signs of a run on Canadian banks. This is what happens when the government starts threatening to seize funds. The outage reports at the Royal Bank of Canada look rather extreme, and ATMs began to announce new hours. Many Twitter users are reporting that the ATMs are empty.
This could get very ugly very fast. What if there is contagion? (As an aside, the one word hardly spoken during this incredible drama is Covid. It was never really about a virus.)
The Great Transition
On the matter of compliance, the burdens are stunning. For any nonprofit organization to receive crypto and turn it into cash, there are only a few options out there. Getting approved requires piles of documentation and approvals. Clearly regulators are doing everything possible to throttle this sector and progress in FinTech generally.
Since 2013, I’ve written about the possibility of a fully private monetary system. It seemed like a wonderful ideal. Someday, we will get there. But the transition has become extremely complicated, as government authorities attempt to use their existing regulatory hold on conventional money and regulated exchanges to institute a China-style social credit system.
Even now, I cannot believe that I just typed those sentences, which I used to hear only from very fringy commentators. Now the fringe is the fabric. Anyone who has not paid attention to the conspiracy theories of the last year has failed to anticipate most of the news.
Many of the world’s wisest minds have observed that the main means by which powerful states seize and retain control is through the money of the realm. Guns help. Prestige helps. But in the end, it’s the control of money that keeps the people in servitude.
Workers of the World Unite Around Crypto
It’s nothing short of an inspiration to observe how blockchain technology is finding ways around this problem. I’ve been spending time examining Solana’s Switzerland-based platform for decentralized finance and contracts and it’s truly remarkable.
The proof-of-history protocol seems to have provided a solution to the scaling problem that afflicts many blockchain tokens, giving us astonishing speed (710K transactions per second, or 50 times credit cards) while ensuring transparency, almost zero fees, and no censorship.
The more time you spend with the mind of architect Anatoly Yakovenko, the more impressed one is. So yes, there seems to be a strong basis for the astonishing rise of the token SOL.
If you find all this stuff a bit mindblowing, I get it. Crypto was once for geeks only. Now it has become a tool for saving the working class from obliteration by hegemonic forces within the ruling-class financial structure.
The workers’ revolution is taking a different path from what anyone in the 19th century could have ever imagined: from diesel to crypto to freedom. Or so we can hope.
for The Daily Reckoning