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.
Welcome to The Road to Bitcoin Hegemony, a weekly analysis of some the most interesting developments in Bitcoin and why they matter in Bitcoin's journey towards monetary dominance.
Californians are proud to be a little crazy. There’s something very different about the West Coast attitude to life - hardly surprising given they are the descendants of intrepid settlers who crossed an uncharted continent in pursuit of gold.
While the pioneering spirit of forty-nine still burns brightly, the Golden State is on the verge of another major migration. But this time it’s not an influx - it's an exodus.
In the last decade, around 150,000 people have left California, while some of its most famous sons, including Joe Rogan and Graham Stephan, are planning their own exit strategy to places like Nevada or Texas.
Why are so many people considering leaving a place where most people would think themselves lucky to live? The answer isn’t Californian contrarianism, but the same reason their ancestors made the perilous trip across prairie, mountain and desert: opportunity.
California is no longer a land of plenty where the streets are paved with gold. Many commentators have pointed out that the state is deeply unsustainable, with crippling taxes, a mammoth budget deficit, crumbling infrastructure, and unstable government.
What makes this exodus so ironic is that it’s been made possible by Californians’ own genius. They have brought us everything from virtual libraries and stores, online gaming, click-and-deliver dining, cinema-on-demand, and virtual conferencing. What do Amazon, Steam, Uber, Netflix, and Zoom all have in common? They’re all from the West Coast, dude.
You could say that California is a victim of its own success. Its technology brought the whole world into our living rooms, so now it really doesn’t matter where you live. No wonder more people are choosing to leave behind the congestion, pollution, overcrowding, high taxes, and political turbulence, and instead choose a simpler life. That’s not crazy: it’s common sense.
If emigration threatens to turn LA from the City of Angels into a city of ghosts, it’s not alone. Other megalopolises, including London, are seeing companies and citizens leaving in droves as they seek cheaper rents and greater health and happiness. I have talked at length about the disruptive potential of widespread remote working, but the speed of change is exceeding my most bullish predictions. Even I, a born-and-bred Londoner, am planning to relocate from the Smoke, something that’s only possible thanks to Silicon Valley technologies that enable us to work and live wherever there’s reliable broadband.
What has any of this to do with Bitcoin? Well, as we pursue more decentralized lives, the need for secure, digital, cross-border mechanisms to communicate and transfer information and value will only increase. Decentralized technologies like Bitcoin are not only important tools that help us hold onto hard-earned value; they are destined to become essential mechanisms for transferring value between parties in every corner of the globe.Great cities grew because they were a locus of opportunity, capital, and human resource. The next chapter of human civilization will be defined by decentralization: yet another reason to be banking on Bitcoin.
Hot on the heels of the EU’s proposal of broad new regulations for Markets in Crypto Assets (MiCA), the FCA has announced a wholesale ban on the sale and marketing of crypto-derivatives products to UK retail consumers.
Regulation has been imminent for the crypto market ever since Coinfloor began in 2013, and it is something that we have spent a lot of time educating regulators and UK lawmakers on to help ensure that laws are fair and balanced.
Finally, it appears that regulation of the cryptocurrency space is upon us. Along with regulation comes enforcement, and we are beginning to see regulators flex their muscles.
What is interesting is that regulators around the world have made one thing clear ? they are all comfortable with the simple purchase and sale of Bitcoin. When it comes to more complex crypto-based derivatives, the regulatory situation is far less straightforward.
While it’s still unclear what this will mean long-term for the bouquet of Bitcoin-inspired offshoots, regulators everywhere now recognize - even if they still may not agree with - Bitcoin’s store of value use case, and its status as the world's first and most dominant truly decentralized digital bearer asset.
So if a consumer just wants to buy bitcoin and hold on to it, this will now just become easier, safer, and more accepted over time. For more complex financial instruments, the future is much murkier, and it will take months or more for the status of crypto derivatives to become clear.
If not exactly a ringing endorsement, regulators’ growing acceptance of Bitcoin’s reality won’t pass unnoticed by "newcoiners." I can only see this decision driving more traffic to Bitcoin investment and savings products that espouse philosophies such as dollar-cost-averaging, hodling, and keeping things simple, which are all positive principles that reinforce the Bitcoin ecosystem. And so, the march to Bitcoin hegemony continues onwards.