All eyes on El Salvador

Why I’m moving there to start a non-profit and help Bitcoin succeed

Twenty years from now history books will include a chapter on ‘the first Bitcoin country.’ Exactly what it will say is unknown, the only certainty at this point is that this is an inflection point in history.

I hate hyperbole as much as the next person, but it’s truly hard to understate the significance of El Salvador’s move.

It is an experiment on the grandest scale.

I’m working on the assumption that Bitcoin (and the movement it’s spawned) will radically change our future world. Again, whether that is positive or negative is still uncertain, but the idea that you could ever put this genie back into the bottle is balderdash. This is an unstoppable innovation, so I choose to try to influence it toward the direction I believe in. Whatever happens in El Salvador will create a framework for its future growth. It’s also still early enough and El Salvador small enough that you or I can have real impact that will echo into the future.

Beyond my belief that Bitcoin can and will be a force for good, part of my fascination has always been the utter uncertainty of the project. Humans are terrible at accepting the unknown (see: Religion) which is why Bitcoin has been hard to grasp for many. The price goes up or down and everyone wants to ascribe a rationale for that which fits their pre-existing worldview. The first mistake is the focus on price, the second is thinking that the logic of the old world still applies to the emerging one.

Anything is possible. That is not something we should paper over with whatever narrative fits our worldview, hope or fear. It is something we should celebrate. The bitcoin experiment in El Salvador fits neatly into this chaos.

Broadly, there are two main possibilities.

Failure and success.

On one end of the failure spectrum, the technology simply is not ready. It’s too difficult to use, too easy to be cheated and never extends beyond niche use cases. On the other extreme, it fails because it is aggressively attacked by powerful outside forces. Then there is a range of possibilities and combinations between those two failures — internal and external.

I’m a big advocate, but I’m not sure this is ready yet. I also believe that this is a massive threat to the status quo and while their lack of understanding means the old power has and will continue to underestimate Bitcoin, they also at least partially recognize the threat, and power is rarely ceded without a fight. This will manifest in hostile institutions like the IMF and World Bank, perhaps sanctions, and certainly a massive propaganda campaign. Physical force is a last resort because it’s too obvious especially when pumping disinformation is more effective anyway.

If it fails, in any scenario, for any reason, it will be a setback. It will injure but not kill. With some time there would be another attempt to take adoption to the next level. The tech will improve with time — either on Bitcoin or, if Bitcoin is too tarnished, with another project built on its foundations. The status quo will be more transparent and less effective each time they try to reverse the tide.

If it succeeds, then it’s game over. There will be a rush to duplicate that success, now with a blueprint. History unfolds quickly in this scenario.

Most likely outcome

Almost no matter what happens there will be enough spin by interests on both sides to muddy the waters and make it difficult for outsiders to know (which would allow them to pick whatever narrative they already believed, so not very different from the situation today). It’s hard for me to imagine a situation where people like Elizabeth Warren or Donald Trump — guards of the old world — will admit they were wrong rather than doubling down.

The real beauty of Bitcoin though has nothing to do with making money, and everything to do with making those people and institutions irrelevant. Money is just a first-use case. Bitcoin will radically increase transparency and decentralization on everything it touches which will mean that the influence of those centralized figures and intuitions will wane with time. This will push forward a world where individuals will learn to flex their cognitive muscles and be more able to come to their own conclusions.

I’ll be moving to El Salvador before September 7th, when Bitcoin becomes legal tender, to witness history, and try and ensure this experiment sets a positive precedent. I’ll be starting a Bitcoin education non-profit with the goal to make the intangible real.

“What better place than here, what better time than now.” — Rage Against the Machine