The Great Reset and Bitcoin

Last year was the year of pandemic. Facemasks and quarantines became the new normal and changed the world has forever. It was also an unforgettable year for bitcoin. During the lows of pandemic in the March it traded below $5,000. Then in the fall and into 2021 it surged. It hit $20,000 in December, around the peak of the last run in 2017, and then hit $30,000 and following that, $40,000 in January 2021. The bitcoin price has soared around 250% since October. Moving past the pandemic, the World Economic Forum (WEF) has come up with a plan called “The Great Reset”. Basically, it means a complete transformation of the global economy. The idea is that society must transform in response to economic turmoil triggered by the COVID-19 pandemic, in anticipation of further economic turmoil related to climate change. Some think it’s radical and ambitious. The WEF see it as an opportunity for recovery. However, it is already clear that these grand plans are in stark contrast to the principles of cryptocurrencies. Centralization is a big part of the Great Reset.

Ilias Louis Hatzis is the founder and CEO at Kryptonio, a “keyless” non-custodial bitcoin and cryptocurrency wallet, that lets users manage bitcoin and crypto, without private keys or passwords.

In the past, to overcome global crises, global action was always need. Unfortunately, the results were not always as expected. After the first world war, the UK lead the creation of the League of Nations, which eventually failed because it ignored Germany’s economic recovery and political stability. After the second world war, to prevent some of the previous problems, Bretton Woods monetary system was established to ensure global economic stability. The financial crisis of 2008 was the first global recession since the 1930s, which led to several actions to prevent similar crises in future.

There are many parallels between the 2008 recession and the current economic crisis, beyond mounting debt alone. Both represent reset moments for the financial world. The 2008 recession taught us that credit rating systems need decentralizing and highlighted inherent flaws in the financial system. And now, amid another crisis, the world is realizing there’s also a way of opting out of the system altogether, with cryptocurrency.

In October 2008, one month after the failure of Lehman Brothers’ bank sparked the systemic collapse leading to the recession, bitcoin was born in the ashes of economic meltdown, was a response to the corruption of financial institutions. Satoshi Nakamoto published the bitcoin whitepaper and told us about a decentralized, peer-to-peer electronic cash system devoid of intermediaries and governmental interference.

The timing couldn’t be more appropriate. Several months later, in January 2009, bitcoin’s genesis block was mined into existence. Along with the first 50 bitcoin ever to be created, came a message. Serving both as proof of bitcoin’s creation on that date as well as a veritable nod to bitcoin’s raison d’être the message read:

“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”

Fast forward twelve years later, as the loss of confidence in the US. economy accelerates de-dollarization, leading global institutions have stepped forward. Halfway through 2020, the World Economic Forum (WEF) announced a plan to develop a “Great Reset” to emerge as a better world from the COVID-19 crisis. The WEF, together with the UN plan to build the foundation of an economic system and institute a new social contract for a world population with the internet of things, and use of advanced technology.

While world leaders openly announce the Great Reset, imploring the world to trust their vision, they paint a picture of a future, more centralized world.

The Great Reset will try to transfer the current financial system into a fully digital form. The government should be involved in the financial system, but only in the spirit of good governance. The pandemic has shown us that the central bank can print as much money as it wants. While governments want to issue central bank digital currencies (CBDCs) to give them more control over finances, there are still people who want to liberate finances. In the case of both gold, bitcoin, their amount is a finite number, which is why many people resort to them. Trust was needed for a centralized currency to work. However, central banks have violated this trust many times throughout history. If the CBDC would be used for cross-border transactions, it could endanger a lot of things. Centralized power has proven many times in history that it can be wrong. The development of the CBDC should not be celebrated, because it is not a victory for cryptocurrencies. CBDC is more like a credit card and the banks have absolute power over it. You don’t want the central authority to “cut you off” if you don’t follow the rules.

The cryptocurrency industry is also planning its own “Great Reset”, except it will be based on decentralization. To be honest, I am skeptical. If we want to be free, we have to realize that cryptocurrencies are the solution because they are decentralized and offer privacy. If the WEF is serious about creating a more equitable world, then it will embrace crypto in ways like never before. But my guess is that the WEF will embrace blockchain in limited areas like supply chain management, and do everything it can to avoid giving people the freedom that comes along with cryptocurrencies.

The Great Reset might come down to central bank digital currencies versus the cryptocurrencies of the people, centralization versus decentralization.

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