Blockchains Are Here To Stay And So Is Crypto

July 1st, 2022 | RR

Cryptocurrencies may not always be the wisest investment choice, especially for less seasoned traders, but cryptocurrencies and the technology they run on are here to stay. The number of politicians, particularly Conservative politicians, who don't understand blockchains and crypto is astonishing and disturbing all at once. The ongoing collapse in crypto has only fuelled the ignorance and angst against those who have supported the technology.

Could Bitcoin hit zero? Of course, but that doesn't mean the end of the crypto market. In fact, it's only the beginning. At some point, crypto will find a way to decouple itself from our existing fiat currencies and the stock markets. At the moment, cryptocurrencies swing with the times because they aren't the dominant currencies. At the moment, stock markets are crashing and we are in a bear market. Bitcoin's price is reacting accordingly—just like everything else.

Is it possible that there was a crypto bubble? Probably. Just like there was a dotcom bubble, the crypto bubble may finally be bursting. It's very possible that Bitcoin has spent the last ten years being extremely overvalued and is now facing a long overdue reckoning. Maybe $50,000 USD was an unrealistic value and $20,000 is more reasonable. This re-balancing and reckoning is not the end of crypto, nor is it a sign that crypto is a fad.

Crypto crash cycles should be factored into what is considered normal. Any investor who failed to do that should have stayed away from it. Anyone who isn't willing to see 50-90% swings in prices should stay away from crypto—for now. As time goes on, crypto will become more stable. At the moment, there is only one strategy for crypto investors: HODL (“hold on for dear life”, based on a previous and common typo for HOLD).

Crypto is a new technology and, like all new technologies, there is a learning curve for everyone. Once cryptocurrencies cement themselves and become common currencies for online transactions and everyday offline transactions, prices will stabilize and strong coins built on reliable blockchains will be the new normal. There will also be a growing number of “stablecoins”, which pin themselves to other currencies for stability.

In an honest world, the average person can't afford a single Bitcoin.

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Free market forces have already changed the playing field for Bitcoin and Ethereum. Competition in the crypto market has become fierce and winners and losers are quickly being exposed. Not only is this amazing, it's natural and anti-Orwellian. The weak “shitcoins” will sink, while the quality coins that live on reliable blockchains will rise.

If Bitcoin and Ethereum remain the kings, they will need to become more affordable—because that would be a good thing for everyone.

As more coins come and go, prices will become more reasonable. Like in all free markets, more is merrier. The more coins we have to choose from, the more viable crypto becomes as a traditional and functional currency. As more people embrace crypto, more businesses will begin transacting in crypto—which will increase their demand, value and sustainability. This is how all currencies work.

When, not if, crypto gains a foothold as a traditional currency, we will begin to see governments attaching their own currencies to crypto coins and creating their own national cryptocurrencies and stablecoins. Talk of these things is already growing among global leaders and inside global forums. The wiser politicians are working behind the scenes with Millennials and Zoomers to figure out a way to save themselves and their failing fiat currencies. As the USD loses traction in the coming decades, American leaders will start looking for alternatives to the petrodollar. To stay on top and to maintain the current world order, the United States needs to find something quickly.

Blockchains could be the Western world's saving grace.

Crypto Denial Is Foolish

Attacking and denying the validity and importance of blockchains and cryptocurrencies is straight up foolish. In the beginning, we all had our doubts, but a little bit of research can go a long way. By knowing exactly what a blockchain is and how it works, the average person would quickly come on board the crypto bandwagon. Sadly, the average politician couldn't be bothered to wrap their heads around the concept.

These are the same politicians and Boomers who told us inflation would be under control by the end of 2021.

By not knowing how our existing fiat currency works, these Boomers shouldn't be expected to know anything about blockchains and crypto. Most of them still haven't learned how to send an email and emails have been around more than 20 years. These are the same Boomers who would still wage a war to protect the petrodollar, rather than find a peaceful alternative to back their currency.

In Canada, we have people like Chrystia Freeland and Patrick Brown. Two utter morons who need to retire and find other ways to pass their time.

Freeland recently called criticisms of the Bank Of Canada “economically illiterate”. It was an indirect jab at Pierre Poilievre, who called the Bank Of Canada and its policymakers the same thing. Freeland then went on to push a $9B spending package designed to “fight inflation” by doling out billions in more free money to Canadians.

"Blockchains could be the Western world's saving grace."

Every competent economist was able to predict our current inflationary troubles in 2020, when governments closed businesses and handed out almost a trillion dollars of free money to their citizens. Combined with an already high national debt, the closures and free money created our current mess and more spending is likely to make it worse. Chrystia Freeland's package to fight inflation is an attempt to use more inflation to do it. This makes it clear who the real economically illiterate buffoon is between herself and Pierre Poilievre.

It's not that high national debt and spending always lead to inflation, because if that were true, we would have seen runaway inflation years ago. It comes down to how fast money is being printed and injected into the economy. In 2020, the CERB infused billions into the economy at once while governments simultaneously closed it down. Infusing another $9B into the economy will have a similar effect within a year—long after interest rates have reached crippling levels.

Then what happens?

Will the central bank need to increase rates even further to deal with Freeland's inflation? How high will rates need to go in 2023 when inflation surges back with a vengeance? By injecting more free money into the Canadian economy to help Canadians deal with inflation and rising interest rates, Freeland is risking more inflationary damage down the road. It's almost as if she has no idea how the current monetary system works.

She would be joined by the idiots at Canada's central bank who, in late 2021, said, “Our view remains that inflation will stay high in the first half of 2022 and ease back toward 2% in the second half of the year.” As we head into July, inflation is hovering around 8%. That leaves five months for the central bank to tame inflation. Thus far, they have failed and miscalculated nearly every target since inflation began to rear its head in April of 2021.

In April of 2021, when it all started, they said, “The Bank expects CPI inflation to ease back toward 2% over the second half of 2021.” You can see it for yourself right here. As we know, the exact opposite of what they predicted happened.

They did recently change their forecast again to: “We now expect inflation to average 6% in the first half of 2022 and remain well above our 1% to 3% control range throughout the year.”

The BoC's stupidity can be measured by how many times they change their predictions. Chances are, they will simply keep changing their forecasts to make up for their own miscalculations and errors as inflation sticks at 7% for the remainder of the year. They now predict that inflation won't meet the 2% target until the latter half of 2023. There is no indication of whether their prediction includes Freeland's new $9B infusion, but it's doubtful inflation will be at 2% by the end of next year. It's possible they will one day release a more honest forecast pinpointing "never" as the official end of high inflation.

By the end of next year, Freeland's economic literacy and genius will have left us with 4% higher interest rates and compounded inflation.

Freeland's helping hand will be great for everyone in the first few months and in the short term, but when inflation keeps rising with interest rates in six to twelve months, the free cash will have only amounted to more inflation. Freeland's $9B in relief will be worthless and completely pointless for those who have to keep paying more for gas, groceries and electricity in 2023. In theory, cheap childcare and $50 more per month in child benefits is great right now, but when the cost of everything increases another 10% in 2023, families will be back to square one.

When Canadians realize Freeland and Liberals have failed, we can only hope they'll turn their sights to a Conservative Party led by someone who understands blockchains, crypto and the future of monetary policy.

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