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.
After one of the most turbulent and protracted elections in memory, at last we know that the United States will have a new president in January—a fact that’s clear to everyone except the incumbent.
Biden’s victory (or Trump’s defeat, if you prefer) was greeted with fireworks in London, church bells in Paris, and spontaneous street parties in other cities around the globe. But rather than marking the beginning of a new era, I fear this might be the last US election that keeps the rest of the planet on tenterhooks.
Because the days of America’s hegemony are numbered. There is, of course, the sobering challenge of uniting a nation that’s divided both in spirit and in government. But U.S. decline won’t be the result of its ideological civil war or the political sclerosis of an evenly-split Congress. This isn’t 1865, the end of a battle for the country’s soul and the beginning of its climb to world dominance. It’s 2021, and the fire that burned bright throughout the last century has been dwindling for two decades or more.
Biden is taking the reins in the middle of the second wave of a pandemic, with an insurgent and assertive China in the ascendancy, a diminished, dividing-and-divided European Union across the pond, and a global recession to boot. Not only is it difficult to see how Biden can reverse U.S. imperial decline; it’s not even clear if anyone can lead the world—and certainly not in the way we’ve become used to in the last 500 years.
We’ve grown accustomed to a world made up of “great powers” or, more recently, the G8 or G8+5. The rise of China had people briefly talking about the G2, but shouldn’t we really be preparing for a G Zero? Because there is no obvious candidate waiting in the wings to take up the United States’ mantle. China’s decades-long experiment with authoritarianism is not an example other countries are rushing to copy; Russia remains in the 20-year grip of a regime that “wants the milk without the cow;” the EU is united only in name. With even the almighty dollar in decline, we face—perhaps for the first time in recorded history—a world without a leader.
Maybe now is the time we move away from the idea of a single, hegemonic country and look for an alternative. The nation-state has had a good run, but the concept is almost 400 years old. If the Trump presidency has taught us anything, it’s that old models of power are poorly-equipped to cope with the digital revolution of the last three decades.
So what will replace the nation state? Perhaps it will be digital countries: Googlania, Appletina, and Facebookland? These walled communities are powerful forces in terms of the cross-border sharing of information and ideas. But they can’t be hegemons in the traditional sense because they lack the one thing that makes a superpower: their own currency.
So here’s a revolutionary idea: the next hegemon won’t be any single country, but individual people.
In a fragmenting, leaderless, and uncertain world, people no longer feel safe living under the aegis of a supreme power. They have seen how politicians and central banks have frittered away the Cold War peace dividend, making fiat currency increasingly worthless with inflationary money-printing in response to every financial crisis.
The most dangerous opponent is he or she who has nothing to lose. People who consider themselves betrayed by politicians; who have seen their savings evaporate; above all, those who feel powerless: it is these ‘stateless’ individuals who can coalesce into a community that rejects old models of top-down governance and control.
A utopia? Hardly. Bitcoin has already shown that a “virtual nation” is possible: a world based on decentralization and, crucially, its own currency. Bitcoinland is made up of all the people around the world who own, hold, and transact in bitcoin, and believe in its programmed policies of top-down transparency, personal privacy, and monetary meritocracy.
The world will look very different in four or eight years’ time. It’s quite possible that the next time the U.S. elects a new president, the world will greet her not with tears or cheers, but indifference. Of course I could be wrong. Perhaps a Biden presidency will reverse the USA’s decline. But I won’t hold my breath. Bitcoin seems a much better bet for a Great Reset.
I’ve written a fair bit recently about JPMorgan Chase’s dramatic U-turn on Bitcoin, but in such a momentous week it’s possible you missed its latest pronouncement. With the zeal of the recently-converted, JPMorgan released a new report that shows Bitcoin eating into the demand for gold ETFs.
Quoting from the report, Michael Sonnenshein noted: "What makes the October flow trajectory even more impressive is its contrast with the equivalent flow trajectory for gold ETFs, which overall saw modest outflows since mid-October."
I’m not the only one who predicted that digital gold would eventually eclipse the physical version. Now it’s official. What's next? If one extrapolates, it’s easy to see Bitcoin surpassing other store-of-value stalwarts such as bonds, real estate, and equities and going on to become the new digital gold standard.
With individual investors now viewing “orange gold” as a safer haven than the yellow stuff, Bitcoin’s hegemony is approaching faster than even I thought possible.