Obi Nwosu is the CEO and co-founder of Coinfloor, the UK's longest-running Bitcoin exchange. He has over 20 years’ experience building online marketplaces and bringing virtual currencies to tens of millions of people. Obi writes The Road to Bitcoin Hegemony, a weekly recap of some of the most impactful developments in Bitcoin.
With the fall of the Wall and the collapse of communism, people lucky enough to live under capitalism were finally assured of what our leaders had long told us: the West is the best. The end of the Cold War saw Western values sweep the world, with the number of democracies tripling since 1975 and even communist China embracing capitalism.
So is the world heading towards a convergence of socioeconomic systems as Francis Fukuyama famously predicted?
Quite the opposite. The world is once again splitting across an ideological faultline. This time it will not be a political divide but a monetary one: between Bitcoin on one side, and fiat (and its digital avatars) on the other. But this time, “the West” seems determined to be on the losing side of the argument.
While El Salvador was the first nation state to make Bitcoin legal tender, there is strong support for legal adoption among a growing list of countries. Even in places with no plans to make Bitcoin an official currency, it has already become central to economic life. Just last month, for example, Nigerians moved almost $40 million in P2P Bitcoin trading.
None of this is news to anyone who’s been following Bitcoin for the last few months, and nor are the reasons behind its rapid growth around the world. What’s rarely if ever discussed, however, is the widening chasm between the nations leading the way on Bitcoin adoption and those falling behind — which are predominantly in the prosperous and ‘progressive’ West.
We shouldn’t be surprised. Citizens of Western nations do not face the same financial and political imperatives as those in developing nations. Rampant inflation, authoritarian governments, the high costs of remitting or receiving money overseas — the conditions which keep hundreds of millions in misery instantly evaporated once Bitcoin came along.
But while citizens of El Salvador, Nigeria, Paraguay, and a host of other countries are, for the first time, taking control of their financial future, Western governments seem to be working through the five stages of grief as they mourn the terminal decline of their fiat currencies. They’re currently in the “bargaining” stage, pursuing experiments in CBDCs even as citizens in other nations move billions of dollars in the world’s only proven digital currency.
All this is to the detriment of the West. It has chosen to forfeit its technical and financial leadership, the development of new public services based on the blockchain, and the ability to encourage citizens to take control of their financial future — and for what? To prop up ailing fiat currencies that continue to lose their value hand over fist.
But there’s an even more worrying aspect to all this. Democracies are already approaching a crisis point, with plummeting trust in state institutions and even in the democratic process itself. Citizens in the West will increasingly see how Bitcoin liberates and advantages people in developing nations, and will ask why their own governments seem so determined to discourage them from doing the same. As a result, developed world states will learn that protectionist strategies toward Bitcoin only damage the relationship with their citizens more.
Every traveler comes back with the same story: people are the same everywhere all over the world. Most are hard-working and want to better themselves; the main reason they don’t is because of the political, social, and economic systems that stand in their way. Bitcoin enables anyone to turn their effort into value, and to hold and transact that value through time and space.
So what we’re seeing is not just a revolution in financial affairs, but a transfer in global leadership. For decades it was developed nations that set the pace of technological change; in tomorrow's world, it will be clear that it is not the West that leads, but the Rest.