Bitcoin maxis, a libertarian with a liberal streak, often shares the idea of inflation being stealth taxation and its connection to war financing.
This is a result of an old idea called “debasement”, which was famously used in 16th-century England by King Henry VIII to fund wars against France and Scotland. To reduce the cost of currency production, the king substituted precious metal coins such as gold for cheaper metals like copper. Nero, the Roman Emperor, used a similar trickery to reduce the amount of silver in the currency. By some estimates, debasement led to annual inflation of around 1,000 percent at one point in Roman history.
According to the dollar-debasement theory supporters, the US government is doing something similar today. To fund foreign wars, the government prints more money than it has underlying assets to support it. This is at the expense citizens through taxes.
Song stated that the Bitcoin doesn’t allow governments to spend this insane deficit spending because they have to borrow money from the market.
Erik Voorhees is one of Bitcoin’s first public advocates and the CEO of ShapeShift self-custody cryptocurrency platform. He told Motherboard that although the situation in Afghanistan may be complex, it’s a sign of a militarist empire overextending itself.
Voorhees stated that while Bitcoin may not be able to alleviate immediate suffering, it does help solve the problem. He said that Bitcoin has the potential to starve the empire of its tax revenues and limit its ability of printing currency for funding wars.
He said, “A Bitcoin world is one of smaller governments. Smaller governments don’t invade or occupy foreign countries for more than 20 years.”
Song stated that the greater concern is the violence and destruction in those countries. However, Bitcoin can still be a help in war-torn and poverty-stricken countries, Song believes. ‘If your bank is your own, you don’t have to worry about bank runs,’ Song stated.
The idea of self-custody or being your own bank is the core of Bitcoin’s almost mythical origin story, which began in 2008 after the global financial crisis. Satoshi Nakamoto, Bitcoin’s mysterious founder, stated that Bitcoin would allow peer to peer electronic transactions without the need for users to trust banks. This idea is also what has some Bitcoiners skeptical about centralized exchanges that have custody of your coins. A common mantra is “Not your keys, but your coins”.
The challenges facing Afghans right now are real. Afghan filmmaker Sahraa Karimi, the first woman to be appointed as the director-general of state-run Afghan Film Organization, posted yesterday a heart-breaking video appeal. She said that the Taliban had surrounded Kabul and she was trying to get money at a bank. They closed and evacuated her. I still can’t believe that this happened.
Many people in Afghanistan don’t think about Bitcoin right now. Using a historical crisis to promote cryptocurrency is sure to cause a lot of upset. It is also worth noting that it has become a common meme in Bitcoin to suggest that the Taliban might adopt Bitcoin. This was also true of ISIS, but this never happened.
Song stated that ‘Whatever the government does with Bitcoin will not matter nearly as much to what the people do’.