Brian Armstrong, CEO of Coinbase, has sparked significant debate in the bitcoin and cryptocurrency community with a recent post on X. Armstrong presented a compelling idea: bitcoin could be crucial to sustaining and extending civilizational influence and values western.
bitcoin as an antidote to inflation
Armstrong's initial mail set the tone: “One idea I've been contemplating is that btc may be the key to extending Western civilization.” He delved into the historical patterns of countries with reserve currencies, highlighting their inclination to inflate the money supply and increase deficit spending.
This path, he suggested, could eventually erode his monetary dominance. Armstrong referenced Ray Dalio's “The Changing World Order,” noting America's current position in this cycle. He also added that the yuan and euro have their own problems and “are not viable alternatives” for the United States to continue inflating the world's reserve currency.
Armstrong maintained that as the United States continues its monetary expansion, the global community now has an alternative in cryptocurrencies. He believes this could be a crucial antidote to inflation. “(People) can start converting fiat money into crypto, as an antidote to inflation,” Armstrong said.
He further explained: “The natural tendency of any country that has the reserve currency is to inflate the money supply and increase deficit spending until that advantage is lost. “America is somewhere in this journey.”
Contrary to the widespread belief that bitcoin could threaten national currencies like the US dollar, Armstrong advocated for a complementary relationship. “I believe that (btc and cryptocurrencies) will be a natural check and balance that will complement the dollar and be the best defender of long-term American interests (and Western civilization in general).”
He added his thesis that it is better for the United States to move from the dollar to cryptocurrencies than to the fiat currency of another country or region. “I also believe that both fiat and crypto will coexist for a long time. They are more complements than substitutes. And dollar-backed stablecoins like USDC, or flat currencies, will play an important role in unifying these worlds.” Armstrong stated.
Community reactions and discussions
The bitcoin and crypto community's response to Armstrong's theory was mixed. Robert Breedlove, recognized as a bitcoin educator, firmly agreed with Armstrong, noting: “Western civilization is only as strong as the credibility of its guarantees of preserving the life, liberty, and property of civilians. For this purpose, no tool is more effective than bitcoin.”
Christopher Calicott, co-founder and CEO of TVP, expanded On this, he suggests that btc represents a modern incarnation of the founding principles of the West, particularly property rights. “bitcoin encapsulates the promise of property rights upon which the flourishing of the West has been built, but in the age of the Internet,” he commented, highlighting btc's potential to combat the rise of digital authoritarianism.
Sharing Calicott's thoughts, Armstrong added: “Good point: bitcoin would extend the basic principles of economic freedom (property rights, sound money, etc.) in Western civilization for a long time, something we risk periodically losing.” “.
Dennis Porter of Satoshi Act Fund expressed his perspective on the peaceful coexistence of bitcoin and the dollar. He noted: “I agree that bitcoin and the dollar can coexist peacefully for many years/decades to come.”
Debates on economic growth and the role of bitcoin
Castle Island VC's Matt Walsh raised a pragmatic point, suggesting that the United States should reconsider its approach to its bitcoin holdings. “It is also beneficial for the US that we own a considerable amount of btc. You should reconsider selling these holdings through Marshals auctions and also accept btc for tax payments,” he advised.
LukeYoungblood.eth increase an economic concern, comparing bitcoin's finite supply to the gold standard and its potential limitations to economic growth. According to him, the biggest argument against bitcoin is that it cannot grow along with the economy. Therefore, a bitcoin standard could hinder economic growth because businesses and consumers cannot borrow.
Armstrong, in response, clarified that a deflationary currency like btc would not eliminate lending, but would need a higher threshold for its occurrence. He said, “Okay. The only thing I would change is that a deflationary currency does not mean zero lending, it just means a higher bar for lending to occur.”
At the time of this publication, btc was trading at $41,698.
Featured image from Vanity Fair, chart from TradingView.com
