They tell us it’s because of the exploits, volatility, and high-profile collapses, but in reality, it’s about power. Crypto, the alternative digital financial system, is free from the government’s influence in a way that the government is uncomfortable with.
They do, however, recognize that digital money makes sense in our digital world.
So, they’ve invented their own digital asset, known as Central Bank Digital Currencies (CBDCs).
But, these CBDCs are more dystopian than the average person realizes.
That’s why, when Florida Governor Ron Desantis this week announced legislation to ban CBDCs in Florida, we thought it would be worth exploring what exactly CBDCs entail and why BTC is ultimately the better option.
What’s A CBDC? CBDCs are stablecoins controlled by the US government. The easiest way to think about them is as digital dollars.
The concept behind them is that basically you get all of the benefits of cryptocurrency and stablecoins with none of the associated risks.
This basically means that because they are central bank-backed, there is no risk of depegging, getting hacked, or a protocol collapse (unless you ask Balaji).
Plus, the enthusiasts claim, they come with some of their own built-in benefits.
They make monetary and fiscal policies easier to implement. CBDCs offer central banks greater control over the money supply, as they can be issued and withdrawn more easily than physical cash. If our government wanted to hand out another stimulus, for example, all they would need to do is wire some CBDC to people’s wallets/bank accounts instead of relying on checks and the lousy postal service.
Increased efficiency and cost savings: CBDCs can be more efficient than traditional payment methods because they can be transferred instantly, 24/7, and without intermediaries. This can lead to cost savings for both the government and the public.
They could help promote financial inclusion: The pivot to CBDCs could provide greater access to financial services for citizens who are currently unbanked or underbanked, as they don't require a traditional bank account to use. This could potentially help to reduce financial exclusion and spur economic growth.
They could reduce reliance on foreign currencies: Some countries may use CBDCs to reduce their reliance on foreign currencies, such as the USD. In certain circumstances, this can protect their economies from external shocks and help support economic independence.
They can help to dissuade illegal activities. CBDCs are digital. This means that transactions would be much easier to track and monitor than with physical cash. While this may be the spookiest “benefit” (we’ll talk about this below), it could help reduce fraud and illegal activities such as terrorism financing and money laundering.
For these reasons, 114 countries are exploring launching a CBDC.
Pure Evil Pure evil is how Arthur Hayes described CBDCs.
That’s because, despite the above stated benefits for governments, CBDCs could do much more harm than good for the average citizen.
At the end of the day, CBDCs are controlled by the authorities and could be potentially weaponized against the people.
Do we really want money that could be turned on and off by government bureaucrats?
It’s easy to envision how this could spiral out of control quickly. Disagree with the ruling party? Say goodbye to your money. And before you say this is an unrealistic scenario for Western democracies, just look at what happened to the Canadian truckers last year.
Or how about when Nigerans were protesting against police brutality and found their bank accounts frozen?
A CBDC is a huge infringement on privacy.
Privacy is a human right, and everybody should be able to privately make transactions. With CBDCs though, this privacy goes completely away. The government will be watching your every move, ready to prosecute you or turn your money off at the first sign of disobedience.
CBDCs also make fighting back virtually impossible. How will an opposition party fund their efforts if the ruling party can see their every move and shut them down at any time?
“They are always trying to close down our bank accounts – but we always find some kind of workaround.
We use bitcoin because it’s a good legal means of payment. The fact that we have bitcoin payments as an alternative helps to defend us from the Russian authorities. They see if they close down other more traditional channels, we will still have bitcoin. It’s like insurance.”
A CBDC would also enable dangerous levels of money printing.
As it currently stands, the Fed already has too much power over the money supply. We’ve seen where this control takes us: runaway inflation, and now, a potentially painful recession to fix the inflation caused by the Fed turning the money printer on.
Now, just imagine if a CBDC was released. All the Fed would have to do to turn on the money printer is release more CBDCs. And, judging by the history of central banks, they will always eventually resort to turning on the money printer.
If you think inflation is bad now, just wait until we have CBDCs.
We’re Not Gonna Take It Ultimately, a CBDC is a ‘financial solution’ that people don’t want:
Not only are CBDCs something that people don’t want, but it’s something that people don’t need. We already have bitcoin, which is superior to CBDCs in every way imaginable.
Bitcoin Today, Bitcoin Tomorrow, Bitcoin Forever Bitcoin serves the same purpose as CBDCs in the sense that it is digital money that can be cheaply sent to anybody at any time.
But the underlying principles of both bitcoin and a CBDC couldn’t be any more different.
Instead of being controlled and weaponized by the authorities, bitcoin is controlled by the people. There is no higher power telling you how to spend your money.
Instead of infringing on privacy, bitcoin grants privacy and anonymity to each transaction. Makes sense, as cryptocurrency traces its roots back to the cryptographic privacy movement and the cypherpunks.
There is no possible way for the bitcoin supply to be inflated to oblivion. The famed 21 million cap is set in stone as Jack Mallers so eloquently stated on CNBC this week.
Instead of being something that people reject outside of coercion, bitcoin is something that people actively seek to use. Over 100 million people have voluntarily adopted bitcoin, and this number is constantly rising.
So, ultimately, you have to ask yourself: does central bank surveillance money or bitcoin have a better chance of success?
Personally, we’re betting on the horse chosen by the people.
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When it comes to layer-2 (L2) blockchains, there is no player with more positive momentum than Arbitrum.
It’s the largest and most valuable L2 by a country mile. It is host to a variety of innovative protocols, including the bear market darling and Arthur Hayes favorite, GMX. It just underwent its Nitro upgrade that boosted speeds by 7-10x.
On Thursday, eligible users will be able to forget about the bear market for a few hours as they are gifted a nice chunk of change.
Let’s break down everything you need to know about the airdrop, what it might be priced at, and how to play it.
The ARB Airdrop Basics Airdrops are one of the more popular methods that crypto projects use to gain some initial traction.
The concept is that by a company teasing “free money” for early adopters, people are incentivized to use the project.
In theory, airdrops are a win-win. The project gains early adoption, while early users are rewarded with a token that has the potential to rise in value significantly. The Uniswap airdrop is a classic example of a successful airdrop. Uniswap went on to become the dominant decentralized exchange, while airdrop recipients were rewarded with a token that ultimately became quite valuable.
Now, of course, airdrops sometimes play out a bit differently than this as people tend to dump their rewards and then leave, but we digress.
People have been predicting an Arbitrum airdrop for what feels like forever. Hell, we started writing about a potential airdrop in September, 2022.
Arbitrum Gets Much Faster | CoinSnacks
Arbitrum officially underwent its much-anticipated Nitro upgrade making it much faster and cheaper to use and raising anticipation of an airdrop.
Arbitrum’s ARB token is officially hitting the wallets of a lucky few (check your eligibility here) on Thursday.
The specifics of the airdrop are as follows:
The total circulation of ARB will be 10 billion.
56% of these tokens will go to the community treasury and 44% will go to the Arbitrum team.
11.5% of the treasury will be airdropped, while 1.1% will go to Arbitrum-based DAOs.
ARB is a pure governance token. ETH will remain the gas token for Arbitrum.
The airdrop is awarded based on a points system. The more of the airdrop criteria you check off, the more tokens you receive.
Now that you know the basics, let’s see if we can figure out what the initial price of ARB will be.
The Initial Price The initial price of the token is obviously a big deal, as that will determine how much money you can make.
Unfortunately, there is no crystal ball we can peer into to know exactly how much ARB will be worth. However, we can estimate it using two different methods.
The first is to compare it with fellow L2 Optimism’s OP token. We don’t want to bore you with the math (you can read more about it here), but if you price ARB this way, you’ll end up with something between $0.60 and $2.00.
The other way is to use the ARB over-the-counter (OTC) market. Right now, people are pre-selling their ARB on peer-to-peer OTC markets. These markets currently have ARB valued around $1.35. Considering that people buying OTC aren’t going to be selling it for less than they bought it, we can safely assume that the $1.30-$1.35 is an initial floor price for ARB.
Both methods get us to the same general ballpark, somewhere around $1 to $2.
How Should You Play It? Typically, the best play for airdrops is to sell right away as most everybody wants to cash in on their free money, and thus, the prices of tokens typically crash hard.
But, Arbitrum is a bit of a different case. This isn’t some random protocol. This is the fourth-largest blockchain in all of crypto, and one that many smart people believe has a bright future. It’s possible that selling the airdrop early will turn out to be a huge mistake.
In our opinion, if you plan on using Arbitrum in the future, or plan to participate in foreseeable voting efforts – it makes sense to hold at least some of it. Those who are patient and decide to ignore short-term volatility could very well benefit from Arbitrum’s growing popularity and use-cases down the road.
But if you’re not going to use protocol in the future and want to lock in profits right away – do yourself a favor and sell your position as quickly as you can.
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