This is an opinion editorial by Samson Mow, CEO of JAN3 and former CSO of Blockstream.
Approximately one year ago, I had the opportunity to speak at Feel The Bit in El Salvador alongside President Bukele. During the event, we announced the Bitcoin Volcano Bonds, while President Bukele made a significant announcement of his own: the creation of Bitcoin City. By legally recognizing bitcoin as tender and establishing Bitcoin City, President Bukele took a bold step toward nationwide adoption. This decision has helped to accelerate the timeline for bitcoin becoming a recognized currency on a national level.
Following the announcements, I received numerous requests from Bitcoiners around the world asking for my assistance with implementing Bitcoin projects in their local communities or with their governments. This interest came from both individuals actively involved in the Bitcoin community as well as from investors. The enthusiasm was largely inspired by the developments happening in El Salvador and the impact they were having on the global Bitcoin landscape.
Driving Nation-State Adoption Of Bitcoin
I had been considering the idea of promoting the adoption of Bitcoin by nation states for some time. After careful thought, I decided to leave Blockstream in 2022, start my own company called JAN3 and dedicate myself to advancing the adoption of Bitcoin as a global currency, known as hyperbitcoinization, and its adoption by nation states. Now, many might ask, why help nation states, why accelerate hyperbitcoinization?
The traditional fiat currency system has greatly exacerbated the credit cycle, a wave-like pattern characterized by periods of prosperity and recession. Under a gold standard, credit is issued based on assets like gold deposits or real estate. In contrast, under a fiat standard, credit is issued by governments and is backed by debt, such as government bonds. During times of economic expansion, more loans are issued and businesses grow. However, at a certain point, there may be too much credit in circulation relative to the actual output or productivity of the economy, leading to a mismatch between the financial and real economies and resulting in the formation of bubbles or market corrections. These events have been occurring more frequently and with more extreme highs and lows.
The mechanisms that central bankers have traditionally used are becoming less effective, like a diabetic needing more and more insulin. If this trend continues, we can expect a severe economic depression in the future. Without clear price discovery, a dynamic economy and the technological and market forces to alleviate competitive pressure, nation states may devolve into conflict and war. When the pie is not expanding, it is easier to take from someone else.
Under a Bitcoin standard, nation states have more incentive to better utilize their resources, as there is a real cost. This encourages peaceful, diplomatic resolution as the default game theory equilibrium. Adopting a Bitcoin standard and accelerating hyperbitcoinization may be our best hope of avoiding civilizational collapse, and ensuring a free and prosperous future for humanity. Simply put, it may help to prevent conflicts and wars driven by economic competition.
I announced the formation of JAN3 at Bitcoin 2022 in Miami. JAN3 is of course named for January 3, 2009, which is the day that Bitcoin came into existence, also known as Genesis Day.
As our director of operations, a former Royal Marine named Doogie, told me, establishing a presence in El Salvador was important for gaining a foothold for Bitcoin and allowing it to take root. We made the decision to open an office there for this reason.
For the Bitcoin network to become more robust, it is essential for more countries to adopt a Bitcoin standard. Although Bitcoin does not need anyone’s help, it can be accelerated and supported by having more countries, territories and cities adopt it. For example, if a country is mining Bitcoin, it is not attacking the network. If a country has made bitcoin legal tender, it is not likely going to attempt a ban on “unhosted wallets.” Overall, having more countries adopt a Bitcoin standard is positive for the network.
Hashing Through 2022
2022 was an interesting year for many reasons.
Madeira, Portugal’s president, Miguel Albuquerque, announced the creation of F.R.E.E. Madeira, which gives Bitcoin a foothold in the European Union. The autonomous nature of the Madeira region gives it the ability to make bitcoin a de facto legal tender.
Próspera, Honduras has become one of the most active Bitcoin hubs in the world. President Joel Bombar announced that bitcoin is legal tender in Próspera during Bitcoin 2022. Recently, a Bitcoin space was inaugurated there, and a legal framework has been put in place to enable the issuance of Bitcoin bonds.
On April 27, the government of the Central African Republic announced that it would be adopting bitcoin as a legal tender. This news was welcomed by Bitcoin enthusiasts, but the government also announced a project called Sango, which is based on an alternative cryptocurrency. It is clear that the adoption of Bitcoin in the country has not progressed as quickly as some had hoped, but we remain hopeful that the Central African Republic will continue to embrace and support the use of Bitcoin.
The crypto market experienced a bear market due to a variety of factors, including the collapse of the FTX exchange, the Luna/Terra crash and the collapse of companies like Celsius and Three Arrows Capital.
At the Panama Blockchain Conference in July, Towerbank, a leading Panamanian bank, announced plans to offer crypto banking services throughout Latin America and beyond and has enlisted our assistance in implementing the Liquid network. Liquid, a Bitcoin sidechain, allows for the expansion of Bitcoin’s capabilities through the use of smart contracts, without introducing a native token. This relationship with Towerbank is a promising development in the world of crypto banking and could help to further establish Bitcoin as a powerful and versatile financial tool.
On October 28, at Lugano’s Plan B Forum, Senator Zury Ríos of Guatemala presented a video for the Bitcoin community in which she expressed an interest in potentially incorporating Bitcoin into her future political plans. She opened up a dialogue with the community and invited them to share their thoughts and ideas on the matter. El Salvador also announced it was opening an office in Lugano, intending to exchange knowledge and benefit commercially. Through the incredible efforts of Bitfinex and Tether CTO Paolo Ardoino, Lugano is making great progress onboarding merchants to Bitcoin. They have already succeeded in getting thousands of merchants to adopt the cryptocurrency, and they are continuing to bring on more.
At the Adopting Bitcoin conference in El Salvador in November, it was clear that the situation with gangs in El Salvador has greatly improved. Public safety has significantly increased, with a notable decrease in homicides and other crimes. This improvement is a testament to the effective measures put in place to address the issue and bring peace and security to the people of El Salvador.
The minister of the economy in El Salvador announced a new digital securities bill, paving the way for the country to issue bitcoin-backed bonds. The legislation will establish the National Digital Assets Commission, which will be responsible for regulating digital asset issuers, service providers and other participants involved in the public offering process of digital securities.
There’s a lot more to go over, but unfortunately I can’t discuss it just yet. Change is coming and Bitcoin is going to be a major topic across the world.
Visions For 2023
2023 is shaping up to be a promising year for Bitcoin. In El Salvador, the digital securities laws that will form the foundation of the Bitcoin Volcano Bonds have been sent to Congress for approval. These bonds could be available on Bitfinex Securities very soon.
El Salvador’s star will truly continue to rise. El Salvador has already attracted a lot of interest for its embrace of Bitcoin, and many other countries are watching closely to see how things progress there. As El Salvador continues to lead the way in Bitcoin adoption, we expect it to continue to rise in prominence.
We expect to see more adoption of Bitcoin in the coming year, as it continues to gain traction despite the current lows. The world needs bitcoin, at any price. For those living in affluent countries, Bitcoin is optional, but for people living in the global south, it is a necessity. Take note, the gap between “affluent county” and “global south” is closing fast.
At JAN3, we have been receiving numerous requests from people in different countries for assistance with adopting Bitcoin. In addition to our work in El Salvador and the Madeira region, we are also focusing on countries like Costa Rica, Ecuador and more. Just last week, Sitiveni Rabuka, the prime minister of Fiji, stated that he was considering making bitcoin legal tender.
Despite the current bear market, we believe that there is no better time to build a strong foundation for the future of Bitcoin adoption. The work we do now will lay the foundation for a more free and prosperous economic future through the acceleration of hyperbitcoinization and nation-state adoption.
This is a guest post by Samson Mow. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.