In Crypto We Trust

Printed on the back of every twenty-dollar bill are the words “In God We Trust.” A close second to God, and among the august founding fathers including Washington and Jefferson, was Alexander Hamilton,

Hamilton, America’s first Secretary of Treasury, not only interpreted the true intent of our Constitution by drafting the majority of the Federalist Papers, but literally created our currency, the Dollar, backed by all the faith and credit our fledgling Republic could muster.

Fast forward to today when, after nearly 75 years of America’s dominance and the ensuing relative global peace and prosperity, we encounter some major challenges to such dominance, including the threat of our weakened currency. 

Weakness, compared to what, one might ask. After all, the dollar is holding up reasonably well versus the fiat currencies of many other nations. 

Enter a new game in town, cryptocurrency.

Looking back at the lessons of history, we find many examples of currency debasement, such as the global political and financial shift in Germany a century ago, reflected in the relationship between the Weimar Republic banknote and gold. 

History may not repeat, but it often rhymes. One may ask whether we are in the midst of such a rhyming pattern when it comes to the relationship between the Dollar and Bitcoin, evidenced by the fact each time the Government announces a new $2 Trillion program, the price of Bitcoin surges? Does one reasonably believe there’s a way we could pay off our ~$30 Trillion National Debt without its debasement through massive inflation? Can the Dollar maintain its position as a defacto global currency in a rapidly expanding global economy? 

Enter the notion of a universal decentralized global smart digital currency to take the place of gold and/or the Dollar.

Perhaps it is time to ask whether the “full faith and credit” behind the dollar is a passing sentiment and whether today’s Dollar/Crypto relationship is a Déjà vu of the Weimar mark/gold relationship of last century?!

— Sina.