Bitcoin has received and continues to receive a lot of fervent support. Its unsteady yet linear ascent from a paltry $0 in 2009 when it was first created, to a $66,000 peak in 2021 is a testament to this fact. These sterling developments beg the question: why is Bitcoin so popular and what exactly does it do for us? Is it really all that it is made up to be or is it just a passing fad?
Dispassionate investigation into this subject led this author to the sobering conclusion that Bitcoin is definitively worth zero. This conclusion might be confusing to some – disappointing even – because the prevailing zeitgeist paints Bitcoin as a harbinger of unparalleled socio-economic revolution.
Contra this colourful prognosis, emerging truths now reveal that Bitcoin is structurally incapable of delivering on its bold promises. Bitcoin fails as a currency, as an investment, as a store of value and as a hedge against inflation – all of which have been touted as unique selling points of this nascent piece of technology. This write-up will dive deep into each of these issues and in the process dispel the erroneous belief that with Bitcoin we are on the cusp of something revolutionary. This discussion couldn’t be any more timely considering that globally Africa currently has the highest cryptocurrency adoption rate with countries like Nigeria, Kenya, Tanzania and South Africa leading from the front.
Having set the agenda, let us begin. Bitcoin fails as a currency because of two things: volatility and scalability concerns. In its 12 years of existence, Bitcoin has maintained extremely high levels of volatility i.e. 60 per cent to 100 per cent annualized. Contrast this with the US dollar, which has an annualized volatility of 17 per cent. This mercurial nature of the digital coin is problematic given that for anything to be considered a currency it has to exist within certain bounds of stability. Anything that moves 5 per cent a day, 30 per cent a month — up or down — cannot be a currency.
Pundits have tried to peg Bitcoin’s volatility to the fact that it is still in its early adoption phase. When it becomes widely accepted and new investors come on board it will settle, they say. This sounds like a fair argument until you run the numbers and realize that at higher levels of capitalization, Bitcoin’s volatility compounds. Simply put, the more people buy Bitcoin, the more unstable it gets.
The scalability issue, on the other hand, is quite straightforward. Bitcoin’s high energy consumption levels (700 KWh per transaction) render it incapable of satisfying the day-to-day monetary needs of entire populations. That and the fact that it is also painfully slow. It takes on average 10 minutes for a transaction to be verified on the Bitcoin network. This means that if you decide to buy a cup of coffee on the side of the road, you would have to wait a whole 10 minutes for the transaction to be completed.
The more people buy Bitcoin, the more unstable it gets.
Attempts have been made to resolve this problem without undermining the integrity of Bitcoin’s infrastructure under the “Lightning Network” project without any due success. Vitalik Buterin, a co-founder of the cryptocurrency Ethereum, notably stated that no crypto can be safe, scalable and decentralized at the same time. He called this the “Blockchain Trilemma”.
Surprisingly, there have been claims that Bitcoin is extensively used as a currency in El Salvador. This is very misleading. The dominant currency and unit of account in El Salvador is still the US dollar. The use of Bitcoin in that country is primarily for remittances by citizens working abroad to their families back home. These citizens rely on Bitcoin for cross-border money transfers to avoid the high costs that come with such transactions, and also because most citizens of El Salvador, i.e. 70 per cent, don’t have bank accounts. This does not make Bitcoin a currency. It is also worth noting that because of its volatility, Bitcoin is not a reliable medium for cross-border money transfer.
The failure of Bitcoin as an investment arises from the fact that it is a no-yield asset. This means that investors have no expectations of making any future earnings except through engaging in zero-sum games with other speculators. Warren Buffet, one of Bitcoin’s biggest critics, weighed in on this saying, “If you buy something like Bitcoin, you don’t have anything that is producing anything. You’re just hoping the next guy pays more. And you only feel you’ll find the next guy to pay more if he thinks he’s going to find someone that’s going to pay more.”
Basically, sentiment is what drives Bitcoin’s price action. The coin itself has no intrinsic value – it is worth zero. Therefore, given the foregoing, referring to Bitcoin as a pyramid scheme would not be too farfetched. A common rebuttal to this point by economic dilettantes is that the stock exchange might as well be considered a pyramid scheme because people buy low hoping to sell high to the next person. This is a poor comparison because companies listed on the exchanges are actually producing something. Ergo, investors can expect returns on their investments without having to speculate in the markets.
The failure of Bitcoin as an investment arises from the fact that it is a no-yield asset.
Moving forward, Wikipedia defines a store of value as “an asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved. More generally, a store of value is anything that retains purchasing power into the future.” In simple terms, a store of value is a place to safely put your wealth where it won’t depreciate. Traditionally, gold and silver have been used as the preferred stores of value because of their long-term stability, durability and desirability. So, why can’t Bitcoin match or even supplant gold as the preferred store of value? Simply because it is volatile and untested. These two factors take Bitcoin out of the running.
Get this: on May 19th 2021, Bitcoin dropped by 31 per cent in a matter of hours after Tesla CEO, Elon Musk, publicly voiced his concerns over its enormous energy consumption levels. These sudden drawdowns are exactly why Bitcoin makes for a terrible store of value. A true store of value does not drop by 54 per cent in 1 month, as Bitcoin did in the May-June period.
Secondly, Bitcoin fails as a store of value because it is untried and untested, having been in existence for only 12 years. Compare this with gold, which has been a constant fixture of human civilization for over 5,000 years. The transient nature of technology makes it difficult for us to know for how long Bitcoin will be around. What happens to investors’ wealth if a better alternative to Bitcoin materializes in the next 5 years? Evidently, redundancy is a real risk.
Bitcoin has also been presented as an all-encompassing solution to printer-happy governments notorious for increasing the general money supply whenever they feel like it. These actions usually cause inflation and lower the purchasing power of money, thereby leaving ordinary citizens in dire straits. Since the total supply of Bitcoin is capped at 21 million tokens, governments can’t print any more of them, alas. Inflation problem solved, right? Not quite.
A true store of value does not drop by 54 per cent in 1 month, as Bitcoin did in the May-June period.
While the attempts to end years of state-sanctioned madness are admirable, the notion that Bitcoin is a hedge against inflation is mostly false. The two variables are unrelated. Bitcoin only responds to capital inputs from its adherents, meaning that it marches to the beat of its own drum. Think about it like this: what would happen if, during a recession, investors responded by moving their money out of Bitcoin into safer assets? After answering this question how can you then, in good conscience, still regard Bitcoin as a reliable hedge against inflation?
On a different plane, I would like to address an unsettling observation I made about the Bitcoin community. Many of these investors are, for the most part, oblivious of the financial risk to which they have exposed themselves. To them, Bitcoin is an infallible colossus, and anything outside of that reality is simply ignored. The half-truths and hive mind-set that has entrenched itself in the crypto space is to blame for this major lapse in judgement. This insidious monoculture has ensured that any attempts to question Bitcoin’s legitimacy are met with strawman arguments, hostility and sour rejoinders. How unfortunate. Perhaps the sagacity of Nassim Nicholas Taleb, an eminent risk analyst, will help get through to this unwavering crowd: “When you invest you must focus on what can go wrong, not what can go right.”
According to market predictions, Bitcoin is expected to hit the US$100,000 mark in the near future. Whether that happens or not has no bearing on the intractable truths articulated here. Bitcoin’s worth is still zero, and one day the bubble will pop. This could happen tomorrow, or fifty years from now. Nobody really knows when.
The main take away from all of this is that you don’t want to be the dupe left clutching at their pearls when it happens.
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Twitter: Let It Burn!
Whether or not Twitter survives should be irrelevant to those committed to building a democratic public sphere.
Elon Musk finally bought Twitter. Although everyone expected the move to quickly prove foolhardy, the speed of the implosion has been impressive. The latest gaffe is a failed attempt to monetize verification by requiring paid subscriptions for them, which has led to all manner of comical impersonations (one macabre highlight was a “verified” George W. Bush account tweeting “I miss killing Iraqis. “Tony Blair” responded with “Same tbh”). Some are watching with shock and horror and wondering if Twitter can be saved. But, when sulfur and fire rains, it is best not to look back.
Africa Is a Country managing editor, Boima Tucker, put it best some years ago: “Contrary to the utopian dreams of the early internet, the idea of a more democratic communications space has given way to a system of capitalist exploitation.” The thing to reckon with is the extent to which we have exaggerated the emancipatory potential of networked communication and social media, partly owing to our own psychic overinvestments in it. Which is not to deny that it has never shown democratic and egalitarian potential, but that’s never been what Twitter is for. There can be no right platform in the wrong world.
What was Twitter for then? In the New York Review of Books, Ben Tarnoff describes it as a “network of influence.” In a world characterized by the economization of everything, social media is the place to commodify the self, to transform one’s unique traits and personality into a product for public display. The main imperative online is to “stay on brand,” to cultivate an appealing enough persona in the endless “production of new genres of being human.”
The key contradiction of social media use, of course, is that even though these platforms appear to us as complete products that we participate in and consume, we are the ones responsible for ensuring their possibility in the first place. As the media scholar Christian Fuchs notes, “Digital work is the organization of human experiences with the help of the human brain, digital media and speech in such a way that new products are created. These products can be online information, meanings, social relations, artifacts or social systems.” Thus, it is us who create the value of these platforms.
In a better world, these digital communications platforms would be democratically owned and operated. But one also wonders if in a better world they would be as necessary. Perhaps, when we are less socially disaffected, living in societies with social provision, an abundance of recreational public goods and less exploitative, dignifying work, then we would all have less reason to be online. For now, the question is: in a time when this ideal is nowhere close to being within view, how best can we use platforms like Twitter as tools to get us to that world?
The possible answers here are murky. Twitter seems like a critical piece of infrastructure for modern political life. Musk is not alone in thinking of it as a marketplace of ideas, as something like a digital town square. Yet, and especially in Africa, Twitter is not as popular a platform, and even on it, a minority of Twiteratti exert an outsized influence in terms of setting the discursive agenda. But setting aside the question of who is excluded from the digitalized public sphere of which Twitter is a cornerstone, the important question is whether the quality of political debate that takes place is healthy or desirable at all. Granted, it can be fun and cathartic, but at the best of times, amounts to hyper-politics. In Anton Jager’s explanation, this:
can only occur at a discursive level or within the prism of mediatic politics: every major event is scrutinized for its ideological character, this produces controversies which play out among increasingly clearly delineated camps on social media platforms and are then rebounded through each side’s preferred media outlets. Through this process much is politicized, but little is achieved.
We would lack critical self-awareness if we did not admit that Africa Is A Country is a venue whose existence greatly benefits from an online presence—so it goes for every media outlet. Tarnoff points out that “… if Twitter is not all that populous in absolute terms, it does exert considerable power over popular and elite discourses.” To lack an online presence is to reconcile oneself to irrelevance. Although, the news cycle itself is a disorienting vortex of one topic du jour to the next. It makes difficult the kind of long, slow, and sustained discourse-over-time that is the lifeblood of politics, and instead reduces everything into fleeting soundbites.
Nowhere is the modern phenomenon of what Polish sociologist Zygmunt Bauman called “pointillist time” more apparent than on Twitter. For Bauman, pointillist time is the experience of temporality as a series of eternal instants, and the present moment’s connection to the past and future “turns into gaps—with no bridges, and hopefully unbridgeable.” The consequence of this, is that “there is no room for the idea of ‘progress.’” Living through a mode where everything seems to be happening all at once, is both to experience time as what Walter Benjamin called “a “time of possibilities, a random time, open at any moment to the unforeseeable irruption of the new,” but curiously, at the same time, for everything to feel inert, and for nothing to seem genuinely possible.
For a while, notions of historical progress have been passé on the left, associated with Eurocentric theories of modernity. Now, more than ever, the idea is worth reclaiming. The Right today is no longer straightforwardly conservative, but nihilistic and anti-social, thriving on sowing deeper communal mistrust and paranoia. These are pathologies that flourish on Twitter. The alternative to media-fuelled hyper-politics and anti-politics is not real politics per some ideal type. Politics, in the first instance, is not defined by content, but by form. The reason our politics are empty and shallow is not because today’s political subject lacks virtues possessed by the subjects of yore. It’s because today’s political subject is barely one in the first place, lacking rootedness in those institutions that would have ordinarily shaped an individual’s clear sense of values and commitments. The alternative to digitized human association, as noted by many, is mass politics: only when the majority of citizens are meaningfully mobilized through civic and political organizations can we create a vibrant and substantive public sphere.
AIAC editor Sean Jacobs observed in his book, Media In Post-apartheid South Africa: “the larger context for the growing role of media in political processes is the decline of mass political parties and social movements.” Whether Twitter dies or not, and if it does, whether we should mourn it or not, should be beside the point for those committed to building a world of three-dimensional solidarity and justice.
COP 27: Climate Negotiations Repeatedly Flounder
The distribution of global pandemic deaths ignored existing country vulnerability assessments and dealt some of the heaviest blows to the best prepared countries in the world
As COP 27 in Egypt nears its end, I find it difficult, almost impossible, to talk to my children about climate change. The shame of our monumental failings as a global community to address the greatest crisis our planet has consciously faced weighs too heavy. The stakes have never been higher, the moral quivering of political leaders has never been more distressing.
“All animals are equal but some animals are more equal than others,” goes the famous commandment from George Orwell’s political allegory Animal Farm. It applies with particular acuity to international negotiations, where each country has a seat, but seats hold very different weights. The outcome of the Sharm-El-Sheik conference will in large part depend on what Western governments are willing to commit to and follow up on. Rich European and other Western countries are historically responsible for the bulk of carbon emissions. The moral case for them being the first-movers and the biggest movers on cutting emissions is crystal clear, and genuine commitments on their part may hold the key to opening up the floodgate of policy innovation towards decarbonization in other countries.
In this context, viewed from the Global South, recent events in the country that still held the COP presidency until it was handed over to Egypt appear as signs of the madness that grips societies before a fall. In her short time as head of government in the UK, Liz Truss spoke as if she lived on another planet that did not show signs of collapsing under the battering of models of economic growth birthed under the British Empire, gleefully pronouncing that her three priorities for Britain were “growth, growth and growth.” Her successor, Rishi Sunak, announced that he would not attend the COP 27 climate summit because he had to focus on the UK economy. The silver lining is that Truss did not last long and Sunak was shamed into reversing his decision. In a scathing rebuke, the Spanish environment minister called the shenanigans of British political leaders “absurd” and pointed out that elections in Brazil and Australia show that voters are starting to punish leaders who ignore climate change.
I see another silver lining. Last week, the World Meteorological Organization (WMO) announced that Europe was warming twice as fast as other parts of the world. A similar report was not issued for North America, but other studies indicate faster than average temperature increases across the continent’s northeastern coast, and its west coast was home to one of the most striking heat waves last year, with a memorable summer temperature peak of 49.6°C recorded in British Columbia, Canada.
Professor Petteri Taalas, the WMO secretary-general, emphasized that the findings highlighted that “even well-prepared societies are not safe from impacts of extreme weather events.” In other words, the report should make Europeans think it could happen to us, with “it” being devastating floods on the scale of what Pakistan and Bangladesh recently experienced, or the hunger-inducing droughts afflicting Madagascar and the Horn of Africa. While some may find it dismal that human beings remain relatively unmoved by the plight of other human beings considered too distant or too different, this is a part of human nature to reckon with. And reckoning with it can turn a sentiment of shared vulnerability into an opportunity for the planet.
Climate negotiations have repeatedly floundered on the unwillingness of rich countries to pay developing countries loss and damages to fund their transitions to greener energies and build crucially needed climate adaptability to limit deaths. Underlying such a position is a centuries-old smug belief that Europe and North America will never need to depend on solidarity from other parts of the world. The WMO report calls into question such hubris, as did the Covid 19 pandemic before that.
The distribution of global pandemic deaths ignored existing country vulnerability assessments and dealt some of the heaviest blows to the best prepared countries in the world. Europe and North America, where barely 15% of the world population resides, accounted for more than half of COVID deaths. Turning the normal direction of disaster statistics upside down, high- and upper-middle-income countries accounted for four out of five Covid deaths globally. While some scientists still pose questions over the real death toll in low-income countries, I was grateful to not live in the West during the pandemic. In Burkina Faso, Kenya and Senegal where I spent most of my pandemic months, I often encountered “COVID refugees,” young Europeans who had temporarily relocated to work remotely from Africa to escape pandemic despair at home.
We are at a point in our failures to fight climate change where fiction writers and other experts of human nature are often more useful than scientists in indicating what our priorities should be. Many fiction writers have turned their focus on what will be necessary for humans to remain humane as societies crumble. Before we get to that stage, let us hope that political leaders and delegates keep remembering that climate disaster could very concretely befall them personally at any time. Let us hope that the sense of equal—or more cynically, unpredictable—vulnerability instills a sense of global solidarity and a platform to negotiate in true good faith. Let us hope that we can start talking to our children again about what we adults are doing to avert the disaster that looms over their futures.
The Specter of Foreign Forces in Haiti
The so-called ‘Haitian crisis’ is primarily about outsiders’ attempts force Haitians to live under an imposed order and the latter’s resistance to that order.
What actually happened on the nights of October 6th and 7th, 2022, remains unclear. What reverberated was the rather loud rumor of the resignation of Haiti’s acting prime minister Ariel Henry. He was a member of President Jovenel Moïse’s pro-US Pati Ayisien Tèt Kale (PHTK) party. (Moïse was assassinated in July 2021.) Had Henry truly resigned? Or was it just a well-propagated rumor? Could it have perhaps been both at the same time: that Henry might have indeed resigned but had been coerced to stay, thus making the news of his resignation spread like gossip that the governmental communication machine had fabricated for public consumption?
Nevertheless, we witnessed the following the next day: in Henry’s address to the nation, he first requested the intervention of foreign military forces in Haiti. He then made a formal request to the United Nations. This call was picked up by international organizations, particularly the Secretary General of the United Nations, António Guterres. In the media coverage of the events, no relationship was established between the (rumored) resignation of the de facto Prime Minister and his request for military intervention. Was it a way to keep our minds occupied while waiting on a response from the international community? Or was the military intervention a promise made by the international community to Henry for the withdrawal of his letter of resignation?
Media coverage has seemingly obscured what happened on October 6th and 7th by choosing to focus solely on the request for military intervention, obscuring a chain of events in the process. Was the same request addressed to the UN and the US administration? Or were these two distinct approaches: one within a multilateral framework and the other within a bilateral framework? Supposing it was the latter, what does this tell us about the Haitian government’s domestic policy, about US foreign policy toward (or against) Haiti, or even about geopolitics (as part of a white-hot world order)—especially in light of US Assistant Secretary of State Brian Nichols’ visit to Haiti, his ensuing meetings, and the presence of US Coast Guard ships in Haitian waters?
At least one thing’s for sure. Since the request for formal intervention and the presence of the US in the form of its warships and its emissary, the question of military intervention has been swiftly framed as a discourse on the supposed “consensus between Haitians.” In reality, it refers to the convergence of interests between the representatives of the de facto Haitian government; the representatives of the Montana Accord (agreed on between civic and political groups in the wake of Moise’s assassination); and the president, Fritz Jean, and prime minister, Steven Benoit, agreed on as part of that accord. The message is clear: If you do not want a military intervention, side with Ariel Henry, who initiated the request himself. Any posture of self-determination must undergo review by Ariel Henry and his crew.
In these circumstances, there can be no self-determination. It is as though those truly responsible for the military intervention (which was already underway) aren’t those who asked for it, but rather those who were unable to thwart it by finding an agreement with the former group. In this sense, the “nationalist” label (the current catchall term which, among other things, is being made to include any praxis refuting the colonial apparatus) refers to doing everything possible to avoid military intervention—and that means doing exactly what the representatives of the “Colonial Capitalist Internationale” want.
American presence in Haiti—in the form of warships and a high-ranking emissary—takes after historical colonial endeavors such as the Napoleonic expedition for the reestablishment of slavery (1802) and King Charles X’s fleet, sent to demand ransom for Haiti’s independence (1825). Yet, in this case, the point is not to put pressure on those who hold the keys to institutions, but rather to avoid losing control in a context where those in government are not only misguided, but also display the greatest shortcomings in managing the lives of the population for the better. The US’s current presence thus more closely echoes the language of the English warship HMS Bulldog, sent to shell the city of Cap Haitien to support President Geffrard against the anti-government insurrection of Salnave.
The Henry government uses the same grammar as its tutelar powers to discuss the current situation. Much has been made of “efforts deployed by the United States and Canada”: they have consisted in flying police equipment into Haiti on Canadian and US military cargo aircraft. Henry and the Haitian National Police offered warm, public thanks for material paid for with Haitian funds some time ago; indeed, these deliveries have come very late, and only thanks to pressure from Haitian civil society actors. More problematic still, the presence of foreign military planes at the Toussaint Louverture Airport in Port-au-Prince has served both as evidence of an ongoing military intervention and as a subterfuge to obtain such an intervention.
This request for intervention, while it seeks to obfuscate this fact, nevertheless exposes the political illegitimacy of the Henry government—made up of members of Henry’s PHTK and former members of the opposition. Its illegitimacy doesn’t rest on the usual discussion (or lack thereof) and confrontation between the governors and the governed, nor on the classic power play between the political opposition and the authorities in place; rather, it is the result of the absolute rejection on the part of Haitians of an order controlled and engineered by the PHTK machine in Haiti for over 10 years with one purpose in mind: defending the neoliberal interests and projects of the Colonial Capitalist Internationale. The request for intervention reveals the fact that the rejection of the PHTK machine is but one part of a broader rejection of the neoliberal colonial order as it has manifested itself in various anti-popular economic projects, which themselves were made possible by many attempts at reconfiguring Haiti socially and constitutionally: consider, to name but a few, the financial project of privatization of the island of Gonâve, the referendum to replace the 1987 Constitution, and others.
For the first time since the US military intervention of 1915 (the centenary of which was silenced by the PHTK machine), we are witnessing a direct confrontation between the Colonial Capitalist Internationale and the Haitian people, as local political go-betweens aren’t in a position to mediate and local armed forces (whether the military, the militias, or the armed gangs) aren’t able to fully and totally repress unrest. In this colonial scenario—drafted in the past five years, maintained and fueled by the geopolitics of “natural disasters,” epidemics, pandemics, and the presence of gangs (simultaneously functioning as the armed extensions of political parties and materializing “disorder”)—the only possible solution to chaos is military intervention by foreign forces.
Yet one cannot pretend that such an intervention will help the Haitian people, and no agreement crafted in the language of the colonial system can stifle popular demands and aspirations which, in the past twelve years, have built what Haitian academic and activist Camille Chalmers calls a real “anti-imperialist conscience.”
What of late has breathlessly been labeled the “Haitian crisis” must instead be identified as the highest point of the contradiction which has brewed throughout the PHTK regime: between the International Colonial Capitalists’ will to force us to live under an imposed order and our resistance to that order.
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