A 71-year-old demagogue and a currency system backed by technology for the age of the Internet -- it is not easy at first to fathom how these two phenomena can have anything in common. We should recognise that for specific groups of people both bitcoin and Trump are perceived as symbols of radical alternatives. Good or bad is not relevant, as symbol they are to their specific followers the disruptive forces they wanted and they need. Hence, we have a disruptive idea (bitcoin) and an "outsider" candidate (Trump) not from the established political system. The common denominator for both is distrust - distrust in conventional institutions and institutional political leaders have fuelled the ideological grassroots support for both bitcoin and Trump.
Any new idea, product, candidate that is non-conformist has its own loyal base of supporters and opposition. Changes associated with societal makeup, democratisation of information, economic dynamics acts as a positive catalyst or a negative one to such non-conformist phenomenon. Barack Obama was not the first black candidate with goal to become the President of the United States. Jesse Jackson tried twice in the 1980s to get the Democratic nomination without success. Similarly, several versions of digital currency were experimented before bitcoin came into prominence but none survived. Obama campaign not only revolutionised the use of data and statistics to gain voter traction but it also benefitted from the mass adoption of the idea of a black President. The demographic condition within the United States in 1980s did not facilitate that same idea to be mass adopted.
The caveat with mass adoption is that if the system is not ready then after the adoption it not only reverts but reverts more to compensate. An appropriate analogy would be price correction or shakedown in financial markets. Political system also goes through political correction or shakedowns, and just as significant price correction creates havoc, the same is true for political correction and shakedowns. As we can see from Obama-Trump transition although the rise of Trump can be traced back to the rise of Tea Party movement in 2010.
Tea Party candidates winning against both established Democrats and Republican candidates in 2010 election at the Statelevel election was a significant premonition of the US voters' distrust in traditional institutional candidates. The succession from then to Trump might seem accelerated and surprising but it is not. The system gradually processed the mass adoption of the idea of disruptive candidates. Finally, distrust in the Washington DC's traditional institutional candidates rose high enough to create a decentralised mass adoption of "Trump Presidency". The distrust not only remains but also has grown stronger within the political base of Trump. Trump supporters, even when presented with facts to critique the President, tend to discredit the facts due to their distrust. This phenomenon of distrust is a primal factor behind rise of bitcoin as well.
The bitcoin technology is a disruptive idea consisting of decentralised operation, open-source architecture, innovation-driven and consensus-based decision process. Since inception, bitcoin has had its fair share of opposition and doubters. Such opposition and critique are necessities for any institution or idea to prove its worth and optimise itself to be resilient. The concept of digital currency has been on the technological ether for decades. The idea has been misunderstood by many and integration of existing banking system in the internet through credit card, debit card and PayPal was considered by many to be the final answer for a financial system for the Internet. As long as people had their trust in that same system then it could have sustained the process.
That trust in the existing financial system eroded during and after the 2008 Global Financial Crisis. It was no coincidence that the concept paper for bitcoin written by Satoshi Nakamoto (whose identity until now is mysterious) came into being few months after the financial crisis. It epitomised the idea that government and institutions tried to control the Internet for a long time but eventually realised - the Internet by nature is a free space. If the Internet is a free space then participants in that space can freely conduct communication and transactions. Such transactions need no permission or oversight from existing geographically constrained nation-states. Rather the Internet users will create a consensus-based community for such oversight.
We have to imagine the Internet as a country and just as any sovereign country in this world has its own set of rules and its national currency, in the same manner, a currency for the space of the Internet is the evolutionary next step. Email was the only part of the Internet that was in mass adoption for decades and gradually entertainment, education, businesses, everyday service industry, transaction integrated into the Internet and our lives through home-computing, smart-phones and IOT (Internet of Things). The mass adoption of the Internet was one necessity for an "internet/digital currency" to become reality. The second necessity was for people to want an alternative for existing fiat currencies. After the 2008 Financial Crisis the ubiquitous distrust towards the governments and institutions created a nascent but loyal demand for the fiat-alternative - digital currency. This necessity has faced significant opposition from existing system of political-economy. This opposition is part of the evolutionary process for any new ideas. An idea to survive in time is the truest test of its strength and necessity.
The fallout effect of incremental distrust in political establishment resulted in President Trump. The rise in distrust in financial system gave impetus to tech entrepreneurs towards digital currency. Cryptocurrency, the proper way to address all the digital currencies, is here to stay and after some necessary shakedown and correction this disruptive force will truly bring benefit to the masses. However, the resolution of Trump as a disruptive force is not promising and is rather bleak. Two disruptive phenomena with roots based on distrust. The same phenomenon of distrust exists in Bangladesh as well and eventually this will find a disruptive idea and rally behind it in a decentralised manner. Will our disruptive idea be a progressive one like bitcoin or a conservative one like Trump?
The writer is Archer Fellow, Lee Kuan Yew Scholar.
