Let's be clear: It wasn't the substance of Donald Trump's tweet that made his criticism of bitcoin and Libra so important last week.
It should not be surprising that this American president would declare himself " not a fan of" very volatile "crypto-curves" based on thin air "that" simplifies illegal behavior "or that he would prefer to "reliable and reliable" currency "called the US dollar!
(Anyone who assumed Trump would be a "boy-the-swamp" libertarian spokesman for censorship-resistant money, had a poorly-informed view of a man whose government is stacked with former Wall Street executives who oppose free trade and Immigration, and takes a draconian approach to a number of civil and social freedoms.] 1
More importantly, the tweets are a symbolic milestone in the gradual but ever-growing presence that cryptocurrency occupies in the public conversation about money and politics.
It also marks the starting point in a titanic battle in the form of our global money system.
Publicity you can't buy
Why is a Trump tweet-shame positive for bitcoins price? Well, bitcoin must be relevant to success, and this was at least a recognition of the power halls of relevance.
By just giving it the time of day, Trump revealed that people within the high levels of the US power structure notice the challenge that cryptocurrency technology stands for.
Also important: the tweet came shortly after the Federal Reserve mayor Jerome Powell, one of the US president's favorite bags, had described bitcoin, in senate warning, not as a means of payment, but as "an alternative to gold … a store of value … a speculative store of value. "
Powell did not say that he saw bitcoin as golden in itself; It was a reference to how most bitcoins users treat it, and in that sense he was quite simple. Still, it provided some legitimacy to bitcoin's claim to replace the old era of value.
And if we think about how gold has been used in the fiat currency – as protection against the political risks associated with national currencies – then this one-two stroke could hardly be better for those who claim that bitcoin should play the role of the 21st century.
Think about it: they got the most powerful central bank in the world to describe bitcoin on such terms. Soon after, a self-interested politician who occupies the world's most powerful government service showed why you might want such protection.
Reinforcement of the story
All this comes in the context of the announcement in the month of Facebook sponsored blocks and cryptocurrency project, Libra.
As it was inevitable when a powerful and controversial company launches a radical new idea, Libra's arrival has massively reinforced what I like to call the "narrative economy" in which the crypto curve thrives.
With its Potential Global Clout Drawing on Facebook's 2.7 billion user base, Libra forces people – business leaders, bankers, and, most importantly, government leaders – to think and talk about crypto baskets. That is what led the question to Powell from Mike Chapo, Chairman of the Senate Banking, Housing and Urban Development Committee, and that was the main focus of the Fed Chairman's response. And it is clear what inspired Trump to take to Twitter, provided his three-tweet post contained a line saying that Libra "would have little standing or reliability" and had to seek a bank charter if it were to operate.
Let's not forget that this comes just before next week's hearings on Libra, called by the House Financial Services Committee, called by its leader Maxine Waters, who has warned that Facebook's project may not be allowed to compete with the dollar.
That it is Adjustment between Trump and Waters on a problem is itself historic. But it also claims the power struggle at stake. The assembly interview is about the structure of our finance system and about the dominance of intermediaries who govern that system: banks, deeply integrated as they are in our system of government, money and power.
As porters of the dominant fiat currency system, banks – and in addition the political leaders who decide how to regulate – can make it harder for people to use both decentralized cryptographic curves such as bitcoin and corporate-backed private currencies such as Libra. Trump's tweet, with a high degree of specificity, looked suspicious as if it had been prepared by someone with interests in the banking sector.
But putting a lid on all this will not be easy for governments. Most crypto curves, either bitcoin or Libra, are based on open source software. Can the governments ban the software? Technically yes, but how will they globally coordinate that effort, how would they stop it?
As it is, many central banks suddenly seem to adopt "if you can't beat them, join them" strategy. The government-owned China Daily reported this week that China was accelerating its plans to produce a digital currency. It came a week after Agustin Carstens, head of the Bank of International Settlements, said central banks would introduce digital currencies "before we believe." It was a remarkable face from someone who had previously said that cryptocurrency coders should "stop trying to make money," and rejected any value in the central bank's digital currencies.
Probably more important, just around the time of the Libra announcement last year, the Bank of England governor Mark Carney knocked a bombshell and said the BOE would provide funds for technology companies, a clear feature of spearhead developments in London at a time when Brexit has threatened the banking industry. The opening offers a great opportunity for Libra and other stablecoins to offer new "narrow bank" payment services.
Things are ready to become very confusing, in other words, with private corporate currencies, decentralized crypto inverters and state-run digital currencies all competing for primacy in the money. Thanks to Libra – but really, thanks to bitcoin before that, the economy of monetary innovation tells seriously.
As noise levels rise, more and more people are asking and exploring alternatives to common currencies like bitcoin. They will also seize the opportunities, the risks and the disturbing challenges such a choice provides.
Essentially, a gigantic, collective narrative exercise has been pushed to exaggerate. Stories have always driven the adoption of new ideas, building the coherent emotional tissue that social networks and societies form around them. And what, in turn, the development of a community around a common idea – is ultimately what supports a currency.
Trump, with its 62 million Twitter followers undoubtedly having a broadcast power greater than any new network, contributes to this collective storytelling exercise. Perhaps he is the foil character, in opposition to HODL's and "To the Moon" crypto enthusiasts, but even in that role, he drives the story – mainly by resisting resistance, by encouraging opponents to counter with contrast arguments and by course, memes .
Which brings us to the other factor that ensures that Trump's tweet, more than any other statement by a government officer, will prove to be driving buzz and blustering on this topic: Twitter itself.
Twitter is not just the president's favorite car to communicate with the public, it also represents the most important segment of the crypto narrative economy. If it was a community that was prepared to respond to the three short posts, it was Crypto Twitter, which immediately reacted with its special mix of snark, humor and passion.
God knows where all this goes. But one thing is certain: the crypto-carnival carnival was merely misleading.
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