Wait… my amount has doubled! Why did it go up so much??
My hairdresser was very surprised when she opened her Bitcoin wallet to receive my payment yesterday. In dollar terms, her wallet balance had nearly doubled since my last visit.
I’ve been paying for my haircuts with Bitcoin for a few years now. My hairdresser treats her Bitcoin wallet as a savings account – so she only checks it when I come in for another cut.
This is the first time she’s noticed a material jump in dollar value though. That’s largely because she’s built her balance up to the point where a Bitcoin price surge can move the needle.
Naturally, she wanted to know what happened. Why did this internet money thing that only one crazy guy seems to talk about skyrocket in dollar value?
My answer: Because they are printing trillions of dollars every year now… and Bitcoin is money that can’t be printed.
Bitcoin’s value proposition runs much deeper than that, of course. But I’ve found that the simple answer is often the best answer in short conversations. It’s the one that will stick.
We talked on Monday about America’s proud localist tradition. We’ve always maintained a spirit of self-reliance and rugged independence in this country.
That spirit may have dulled over the past 100 years or so… but it’s starting to reawaken. The seeds of a localist renaissance have already been sowed.
And I’m convinced that Bitcoin has a big role to play in the coming revival. Because it enables us to transact with one another any time for any reason with money that will not lose purchasing power over time.
That last part is the key.
We’ve all had to grapple with the largest bout of consumer price inflation since the 1970s. I don’t know about you, but I’ve found that the price tag for my family’s trips to the grocery store has roughly doubled over the last few years.
But that’s not because something changed with the groceries. It’s because something changed with the dollar we use to buy them.
Namely, our dollar fell in value. Each dollar now buys considerably less than it used to – because those in power printed over $5 trillion since 2020 alone. That’s new money that didn’t exist before.
The truly sinister thing about this is that it makes it hard to save money. This both hollows out the middle class and makes it very difficult for small businesses to plan ahead.
And that’s where Bitcoin comes in.
My hairdresser now saves a portion of her income in Bitcoin. And we both happen to buy our beef from the same local farmer. What if we started buying that beef with Bitcoin?
Then the farmer could save a portion of his income in Bitcoin… and suddenly we have a tiny but resilient circular economy at the local level. We could buy goods and services from one another using Bitcoin – and that would make us immune to inflation.
From there suppose we get the chicken and pig farmers on board. And then the local cidery… and then our local contractors and tradespeople… and so on.
We could create an independent local economy where people can purchase most of the goods and services they need and want using money that will grow in purchasing power over time.
And given that many of us would use this same money (Bitcoin) as a savings vehicle, our local economy would become more prosperous as the dollar price of Bitcoin increased. We would almost certainly see real estate deals and car sales happening in Bitcoin at that point.
Suddenly the local economy would be about as independent and inflation-resistant as it could possibly be.
But here’s the thing – it wouldn’t be isolated. Because the Bitcoin network is global. And bitcoins are completely fungible. As such, it’s now possible to buy most anything online using Bitcoin or a bitcoin-funded debit card.
So ultimately Bitcoin is a tool that could enable a localist renaissance perhaps more resilient than anything we’ve ever seen before in history. Talk about a practical use case…
What do you think? Does this sound too far-fetched? Too naïve?
Let me know – you can reply directly to this email.
-Joe Withrow
P.S. Bitcoin just shot past the $60,000 mark this morning, and it’s almost certainly on its way to new all-time highs.
For more on how Bitcoin integrates into a comprehensive financial plan, check out our Finance for Freedom program right here: https://membership.phoenicianleague.com/courses/finance-for-freedom