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.
“China is a sleeping giant,” said Napoleon, “when she awakes she will astonish the world.”
But what of India? Napoleon wasn’t the only one to discount this great nation, including some of today’s most seasoned world-watchers who eyeball China while ignoring the similarly meteoric rise of its southern neighbour. India is not just the planet’s biggest democracy; it plays its full part in the global economy, with (among others) a thriving tech sector and a space programme. What’s more, according to the UN, it has lifted an astonishing 273 million people out of poverty in the last 10 years.
Yet in spite of this proud record, India is ploughing ahead with a complete ban on investments in cryptocurrencies. Clearly, political plurality, technological leadership, and a commitment to fighting poverty does not equate to common sense about crypto: just look at efforts to squash Bitcoin in the USA and other democracies.
How do I take this news? With disappointment? Frustration? Anger?
None of the above. As I’ve argued repeatedly in this column (and as you know, too), Bitcoin is bigger than any single country; its widespread appeal is based on a commonsensical understanding of the failures of fiat and the benefits Bitcoin brings.
I know a thing or two about India. In a previous life, and long before Bitcoin, I lived and worked in New Delhi. I saw at first hand how innovative, fast-moving, and technically astute everyday Indians are. India’s government had, until last week’s attempted ban on Bitcoin, made huge efforts to support its citizens’ enterprising ambitions. You could call it the Indian Dream.
The proposal by India’s government seems to be modelled on China’s “ban” on Bitcoin, but goes even further since it also outlaws personal custody. Will this kill the Indian Dream?
History suggests not. In 1933 the U.S. government banned gold because they saw “hoarding” as a major contribution to the Depression. Astonishingly, this prohibition remained in place for over 40 years (more than three times longer than the more famous Prohibition on alcohol) and was only repealed by President Ford in ‘74. Of course, this ban was almost impossible to enforce, and those who kept hold of their gold found themselves richer and better able to weather the depression and subsequent storms.
Some people will no doubt sell their Bitcoin in line with their governments’ edict. But many others—those who have held on for dear life through Bitcoin’s rollercoaster but ever-upward rise—will continue to hold, especially during a period which many expect to be a bullish one for the orange coin.I predict that India’s ban will be even less successful than Roosevelt’s, and will provide a compelling case study highlighting the empowerment that Bitcoin brings to the underprivileged, and those who have most to lose from inflation. Depressingly, one of the unfortunate effects of the ban will be to impede India’s phenomenally successful moves to alleviate poverty.
The satoshi really hasn’t dropped for the world’s governments. They are used to money that they control, which explains why they think they can ban Bitcoin with a click of the fingers. In reality, India (or any other country, for that matter) can no more “ban Bitcoin” than they can outlaw the moon.
At the turn of the millennium, people wondered which country would replace the United States as the global hegemon. The “smart” money was—and for many, still is—on China. But that’s wrong. This focus on nation states is a very 19th century way of thinking about the world, and contributed to many of the problems of the 20th. The current century isn’t owned by any one country; instead, it belongs to anyone smart enough to invest in Bitcoin, innoculate themselves from inflation, and take control of their financial future.
I have a simple message to governments tempted to take the illiberal, authoritarian and frankly self-defeating step of trying to ban Bitcoin: It’s here. It’s the next frontier. Get used to it.
While the Indian government tries, Canute-like, to hold back the tide, other major players prefer to go with the flow.
In 2020, I chronicled the hedge funds, institutional investors, banks, and billionaires who have come to see the benefits of Bitcoin.
Now in 2021, we’re beginning to see how financial, technological, and indeed cultural leaders are starting to think more deeply—and indeed, more creatively—about how Bitcoin can change the world beyond protecting our wealth. And this week threw up a fascinating example of how these leaders are bringing Bitcoin’s brilliance to a much wider swathe of the world.
On Friday, Jack Dorsey and Jay-Z announced the creation of B????trust, a new fund for Bitcoin developers based in India and Africa. With an initial investment of 500 bitcoin (around $24 million at current prices), the fund is set up as a "blind irrevocable trust," so neither Jack nor Jay-Z control where the money is directed. Decisions will instead be made by an independent board.
Everyone who cares about the future of Bitcoin should welcome this news. And as an Anglo-Nigerian, former Delhiite, tech-geek, and "Bitcoin Bro" (according to some!), I’m particularly pleased that people in developing countries are getting such powerful support as they apply their technical skills and business acumen to the challenges we all face. Initiatives like ????trust (and those I hope will follow in its wake) demonstrate how quixotic and irrational governments’ efforts to ban Bitcoin are. While they circle the wagons to protect their bankrupt currencies, Jack D and Jay-Z are hitching their wagons to Bitcoin’s star, and marching with it down the road to hegemony.