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From Swan Bitcoin Vol 31
CBDC vs. BTC
You've probably heard of Central Bank Digital Currencies (CBDCs).
As more and more people are saving and transacting with Bitcoin, central banks are getting worried.
Enter CBDCs, the Central Banks centralized answer to decentralized money. Similar to digital USD today, except the government has complete control. If your views and actions stray too far from the mainstream narrative, your money could be turned off.
And it's not just China, 114 countries are exploring this option right now.
Here's why CBDCs are bad for humanity
What is it Good For? Absolutely Nothing!
CBDC advocates promise all kinds of benefits: Reduced payment costs and settlement times, improved financial inclusion, and a more stable financial system.
However, in reality, this would do more harm than good. Here are three potential negative outcomes:
1.) A CBDC would be controlled by authorities and weaponized against the people.
Imagine your money could be turned on and off with a flip of a switch. It can be programmed to expire in 7 days, enforce quotas, and be used to control users.
It is a tool for social engineering and censorship disguised as a money upgrade.
2.) A CBDC would infringe on privacy and create honeypots of sensitive data for hackers
Privacy is a human right that CBDCs threaten. Can you imagine these institutions trying to keep this data safe from hackers?
Over the years, there have been countless hacks with billions of victims.
Yan tweet
With a CBDC, it would only be a matter of time before everyone's financial data would be hacked and leaked.
3.) A CBDC would exclude the elderly, rural communities, and other disenfranchised populations that are not technically savvy or don't have access to stable Internet connection.
When it comes down to it, the risks associated with a CBDC far outweigh the potential benefits.
Heck, even some Fed officials are wondering what problems a CBDC solves!
A Solution No One Wants
Last year, Americans were asked to send comments in response to the Fed's CBDC White Paper..
73% of the 1,887 comments sent to the Fed were opposed to a CBDC.
The same outcome was observed in Europe where over 80% of the public's comments were against a CBDC.
But the ECB ignored the public's response and still plans to move ahead with a Digital Euro.
People who support democratic values neither want nor need CBDCs. That's why governments and central banks have to force it on their people.
This top-down strategy hasn't been working very well
In 2020, the Bahamas launched its version, called the Sand Dollar, but adoption has been nearly non-existent.
After two years, there's only $338,908 of Sand Dollars in circulation or around 86 cents per capita. Total flop.
In 2021, Nigeria launched its CBDC, but Nigerians aren't having it. Current estimates suggest less than 0.5% of Nigerians are using it.
Meanwhile, Bitcoin adoption continues to soar in Nigeria, with ~40% of Nigerian survey respondents saying they would use Bitcoin to protect themselves against inflation. Can you guess why?
CBDCs are failing because citizens around the world have lost trust in central banks and governments.
Just look at how Americans feel about their institutions.
Swan Bitcoin
Is it really that shocking to see people rejecting CBDCs that would only give MORE power to these untrustworthy institutions?
If a product has to be forced on the public, it's probably not a good idea.
Bitcoin: Digital Money Chosen by the People
Unlike CBDCs, Bitcoin doesn't require coercion.
Bitcoin is digital money allowing users to send cheap, fast payments that no one can control or debase.
In a world with soaring inflation and increased financial censorship, Bitcoin sells itself.
CBDCs require government mandates and forced adoption.
Meanwhile, over 100 million people have voluntarily adopted Bitcoin and it's growing exponentially.
So which form of money do you think has a better chance? Central bank surveillance money or Bitcoin?
I know which horse I'm betting on, the one chosen by the People.
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