A Financial Hail Mary for the Climate: An Argument for Bitcoin
This is an essay that in its first part, covers how the financial sector strongly influences our political leaders; what financialization is, how it stagnates innovation and stops us from taking action on climate change. In the second part, it addresses why Bitcoin has value and is not a pump-and-dump scheme, and how it can disrupt the financial sector, giving us a chance to act on climate change and create a newly transformed world (one which exists with or without Bitcoin). The third part addresses environmental concerns regarding Bitcoin’s proof-of-work approach to securing the network, contextualizing the problem and providing some solutions through both external and internal pressures. Finally, the essay concludes with a call to end financialization if we want to maintain a habitable planet.
A contents section is below to make it easier for the reader to jump between sections. There’s a lot to cover, but this was the only way to make the case so please, take breaks when needed, but do read to the end.
Contents
- Introduction / Financialization: A backdrop for understanding inaction on climate change and Bitcoin’s role
- Bitcoin as a vehicle for system change
- Bitcoin’s environmental impact
- For a habitable future, we must stop financialization
For a habitable future, we must stop financialization
The end goal here is not to push a libertarian or Austrian economic wet dream of a Bitcoin reserve currency future, but to disrupt the financial system through Bitcoin in order to create a window of opportunity to transform the financial system to meet the needs of a climate change world. Bitcoin is the only cryptocurrency that is in a position to be this threat. Unlike the alternative cryptocurrencies, Bitcoin does not belong to any one organization and despite the benefits of some of these alternatives with respect to energy efficiency, the other options like Cardano, Algorand, and Hedera Hashgraph (to name a few) are vying for a spot to be the backbone for future central bank digital coins. These organizations choose to work within the financial system as it exists today where elites control the central banks in order to save each other from disaster when they play a too risky game and lose. Therefore, they cannot be trusted to be disruptive nor transformative in the way that we desire.
In June of this year, El Salvador became the first country to make Bitcoin a legal tender. No other cryptocurrency has achieved this status. Consider the shift in El Salvadoran monetary policy along with whatever very valid controversy and concerns you may have about the adoption but realize that El Salvador’s adoption of Bitcoin is also an attack on neoliberalism, financialization and the International Monetary Fund (IMF). The IMF exported, worldwide, policies that led to the systematic transfer of power from the public to private sectors, imposed austerity measures in exchange for loans, and caused the greatest economic downturn in Latin America during the 1980s. The IMF now admits its actions increased inequality and failed to create economic growth. Unsurprisingly, the IMF did not approve of El Salvador’s recent Bitcoin adoption. The response from the global banking system already indicates that the thesis that Bitcoin is a threat is true. If we can disable the banking system, we can at least temporarily put an end to financialization, and use this opening to apply economic solutions, that benefit the climate and people, which were not possible before.
Beyond arguing that Bitcoin is a tool to disrupt the status quo, I want to add a few suggestions regarding how the reader can engage with Bitcoin in order to accelerate its disruption of the financial sector. First, because it is a new technology, you do need to be ready for being a little bit overwhelmed. Spend some time watching videos or reading tutorials on how Bitcoin works. Second, download a wallet, preferably one that has both a regular Bitcoin wallet and a Lightning wallet built in. BlueWallet is one such wallet and I have used it with great success, Breez and Wallet of Satoshi are other popular options. Most wallets have a built-in way to purchase Bitcoin, so don’t bother with central exchanges because they will hold your money. You can also look into Bisq, which is a pro-privacy decentralized exchange. More importantly, learn how to setup your own node, you can use Umbrel which is plug-and-play, or you can install RaspiBlitz or RaspiBolt, if you are looking for a more hands on experience. Both require the Linux operating system to run. If you want to use Bitcoin to make real world purchases, you can use Bitrefill which runs on the Lightning network. Finally, and most importantly, get involved in the community. Attend meetups, post on Bitcoin related forums, create Bitcoin-related content, and teach others about its’ disruptive potential and how to use it.
Bitcoin is a powerful weapon against the financial system, but Bitcoin alone cannot be the solution to everything. We must use every tool available to save ourselves from catastrophic climate change. In my opinion, Bitcoin provides only one solution, the rest is up to us to shape what happens next. As I have tried to argue, Bitcoin has real value and can provide an opening for transformative and systemic change to our financial system. If we do not transform the way our economy works and the power the finance sector has over it and our governments, then there is little hope for keeping the planet from warming beyond habitable levels. Using Bitcoin as a tool for fighting for a habitable future is undoubtedly a kind of Hail Mary pass for the climate, but we are running out of time and mass demonstrations and a failing representative democracy are not doing enough. We have to fight the system on the digital landscape, too. You must decide for yourself which way forward is best, but I know that I will use all available options to reach the goal of keeping this planet from warming beyond 1.5 degrees Celsius.
Previous — Part 3: Bitcoin’s environmental impact
