So Bitcoin has reached one thousand dollars, and suddenly everyone out there is freaking out. Early adopters rejoice, crazy bullshit marketers change their minds, smug bullshit marketers don’t, tenured bullshit marketers keep their options open. Everybody’s onto it.
It seems that the sudden spike owes a lot to the sudden increase of Chinese people buying into Bitcoin, with Bitcoin China having become the biggest exchange worldwide as of now. Why did this happen? Bitcoin certainly is a godsend for Chinese people who like to save money, but are victims of rampant inflation, and have nowhere to stash their savings beyond real estate, which has fueled a really insane housing bubble, with whole million-strong cities made of crappy apartments being built just to absorb the demand for storage of value. Bitcoin solves the problem and it is also easily transferable, which is also a godsend for China where capital controls make moving money abroad a real hassle.
One, which is prone to think of modern government as a rapacious Leviathan who uses its tremendous power to prey upon their citizens as matter of instinct, would think that the Chinese government must hate Bitcoin and everything it stands for. Hence it must crack down on it. Moldbug and Handle think the same way of USG. No way the erosion of state power which Bitcoin represents will be allowed to survive.
Yet the whole Chinese Bitcoin craze only started when months ago Bitcoin miners were shown on national TV news (which is broadcast forcibly in all channels, i.e. everyone has to watch it), making much fanfare of all the money they were making with Bitcoin. It didn’t stop there. Baidu, the Google of China, i.e. a company which could be construed as being part of the government, started accepting Bitcoin in October. And this week, China Mobile started accepting Bitcoins for some campaign. China Mobile is state owned.
Now this is of course doesn’t mean the government is going to start accepting tax payment in Bitcoin. But they are tolerating the thing, which they don’t really have to. The same could be said for governments worldwide. Why did Bernanke come up and more or less say that Bitcoin’s pretty cool? They know what it all means, they could have shut it down months ago, shut down MtGox and send the guy to Guantanamo. I’m sure that’s what FDR would have done. You don’t play with the money supply.
There’s some interesting speculation on why China would tolerate Bitcoin, and both domestic and international politics have interesting angles. But I wonder if it isn’t simpler than all this? That it’s not the result of Machiavellian calculations by the powers that be, but the mere result of the dysfunction of the modern world order.
One thing that bugs me, and I’m sure it bugs more of the less capitalism oriented, not necessarily traditional but let’s say more rustic side of neoreaction, is the modern cult of growth. Now that the financial sector has grown out of all proportions to become the center of the economy and politics of any country, the investor mentality has become pervasive. Now it’s all about growth, about return. I put cash in, and I want to make money out of it, and that’s all that matters. Nobody gives a shit anymore about the fundamentals of any company or country. Nobody gives a shit if a company makes money or not, or if a country is being run over by Africans in boats; all that matters is GROWTH. The left has tainted the word, but sustainability is not a concern for an investor who wants to cash out and buy a bigger house in the Hamptons. He wants Greece to Grow, even though it has no industry and 25% native unemployment; the population must be increased for investors to make money. He wants Japan to Grow, even though it has been losing working population for 20 years. Interest rates are on the floor for governments to pay for their debts, so financial return has come the holy grail that everybody seeks after.
Well if you’re obsessed with Growth, hell Bitcoin is growing like crazy. 10x a year! And if it gets popular a single coin might be work billions in some time. That’s some serious ass-kicking GROWTH for ya. The state must not like it, but lay finance men should be in love with this insane growth generator. What if our new ruling class of finance jocks are so stupidly short-termist that they are joining bitcoin to make money, even if it kills the finances of the governments that sustain them? Lenin said the capitalists would sell them the rope with which they hang them. It is not implausible that the financial state will buy his way into his own demise.
By the way might I remind my readers that my bitcoin address is on the right column. It is probably a bit selfish of me to ask for donations, but a crowdfunded NR think tank is an idea that has been floating around for some time. If gaylord Peter Thiel isn’t likely to fund us, maybe some new NR bitcoin millionaire would like the idea.