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CBDCs vs. Bitcoin

At this point, it’s well known that the powers-to-be are not fans of cryptocurrency.

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.

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?

There’s a reason that Kremlin critic, Alexei Navalny, uses BTC as reported by Reuters:

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.

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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The Arbitrum Airdrop is Finally Here

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.

And now, its much-anticipated airdrop is finally here.

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.

But, as weeks turned to months, seasons changed, institutions collapsed, competitors airdropped their own token, there was still no sight of ARB.

That is, until today.

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:

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.

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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