J.P. Szafranski
BridgeTower Media Newswires
Check your privilege. We don’t even stop to consider that when we need to store or transmit economic value we rely on centralized institutions to act as a trusted third party to ensure our assets remain safe, secure, and go where they’re supposed to go. This reliance is ingrained in our daily existence. Many of us Westerners are privileged to not even have to think about it. We are not among the “unbanked.” We can open a federally insured bank account with little effort. We can secure a credit card with generous rewards for its use.
For us, the idea that we could use the Bitcoin network to store our hard-earned economic value and send it to anyone in the world without needing a trusted third party seems totally foreign. Not everyone is so lucky.
A staggering 7.1 million U.S. households were unbanked in 2019, according to the FDIC. These households often rely on check-cashing and money transmittal services like those offered by companies such as Western Union that charge truly exorbitant fees. It’s hard to get ahead financially if you must pay up to double-digit percentage fees to transfer funds. Bitcoin fixes this.
The unbanked population in the U.S. pales in comparison to that of poorer countries around the world. Many countries have populations dependent upon receiving funds from family living and working internationally. El Salvador’s receipt of foreign remittances totaled almost $6 billion in 2020, nearly 23%(!) of the country’s gross domestic product. Foreign remittance and currency exchange fees are amazingly high. It turns out that Bitcoin fixes this too. Check out how Jack Mallers and Strike are leveraging Bitcoin and the Lightning Network to cultivate a more inclusive financial system and disrupt the traditional payment rails.
Talk to an average person living in a hyper-inflationary country like Venezuela. Chat with a Cypriot who woke up to see 6.75% less in his bank account last decade as the authorities required account holders to fund a “bail in” of the Bank of Cyprus. They will innately understand the benefit of a decentralized, trustless, fixed-supply monetary network like Bitcoin.
I bet there are some truckers in Canada right now who would speak to the perils of trusting the banking system to provide access and security for their funds. If you disagree with the truckers’ grievances, I’m sure you can think of a different, recent group of protestors that you sympathize with. How would you feel if the authorities invoked emergency authority to freeze their funds? The invocation of emergency powers such that a government can freeze the assets of its protesting citizens without due process in the court system is a chilling precedent. Bitcoin, with proper self-custody in place, can fix this.
In 1998, Nobel Prize-winner Paul Krugman predicted “by 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.” It’s natural to be confused about a new technology and its implications. Bitcoin is unlike anything that came before it. It is the best form of money ever conceived. It has the potential to reshape society for the better. Here’s hoping.
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J.P. Szafranski is CEO of Meliora Capital in Tulsa, Oklahoma (www.melcapital.com).
