Bitcoin's Adoption by US Threatens Its Original Vision, Critics Say

Bitcoin is experiencing unprecedented levels of adoption, with the United States establishing a “strategic Bitcoin reserve.” However, some prominent Bitcoin advocates argue that this move could be taking the cryptocurrency away from its original vision. Jack Dorsey, a well-known Bitcoin proponent and the founder of Twitter, expressed his concerns earlier this year. He stated that if Bitcoin is merely used as a form of “digital gold,” it would fail to achieve its true potential. Dorsey believes that a national Bitcoin reserve might benefit the nation-state but could be detrimental to Bitcoin's core principles.

Dorsey emphasized that Bitcoin should return to its original white paper and focus on becoming a peer-to-peer cash system that can be transacted globally. This vision aligns with the concept of “circular Bitcoin economies,” which are local economic ecosystems where Bitcoin is used as a medium of exchange, a unit of account, and a store of value. These economies aim to showcase Bitcoin's viability and potential future as a widely accepted currency.

The Bitcoin Federation defines a Bitcoin circular economy as a local economic ecosystem where Bitcoin fulfills the three roles of currency: a medium of exchange, a unit of account, and a store of value. These communities believe that Bitcoin is the superior form of money and should be used for everyday transactions, diverging from the prevailing attitude in the United States where crypto advocates view it as a reserve asset akin to digital gold. President Donald Trump, for instance, advised against selling Bitcoin, likening it to an investment asset.

Michael Saylor, CEO of Strategy and a Bitcoin maximalist, likened Bitcoin to an investment asset during a lecture at the Bitcoin Policy Institute. He suggested that a significant stake in Bitcoin would allow the holder, such as the United States government, to exert control over the digital economy. Isa Santos, founder of the Bitcoin Isla project in Isla Mujeres, Mexico, acknowledged that government adoption of Bitcoin could take it away from its founding principles but also highlighted the permission-less nature of Bitcoin, making it accessible to everyone, including governments.

Stelios Rammos, founder of the Bitcoin crowdfunding project Geyserfund, believes that government adoption of Bitcoin is inevitable. He emphasized that the Bitcoin community has a core set of values that promotes grassroots adoption over government welfare. Rammos noted that circular economies will play a crucial role in bringing about a future where Bitcoin is used by everyday people, rather than being held as a pure asset within digital vaults at large banks and governments.

Despite the challenges, such as Bitcoin's volatility and the difficulty of growing outside the group of Bitcoin expats and enthusiasts, these communities offer financial education programming and community-building initiatives. Bitcoin Ekasi, a Bitcoin circular economy in South Africa, supports the local Surfer Kids community project by paying coaches’ salaries in Bitcoin and onboarding local shops and vendors to accept Bitcoin payments. Rammos highlighted that these communities can attract tourism through “Bitcoin expats” who want to spend their Bitcoin and grow the local economy, creating a true symbiosis between the local populations and the Bitcoin network.

Whether driven by Wall Street or Main Street, the end goal for the organizers of these communities is to have Bitcoin fully integrated into the financial world. Rammos concluded that there will be a point in the future where the term “circular economies” will no longer be needed, as Bitcoin will simply be part of the economy. This vision underscores the potential of Bitcoin to revolutionize the way we think about money and financial systems, moving beyond its current status as a speculative asset to become a widely accepted medium of exchange and store of value.