It’s not often you’ll hear me say positive things about a U.S. government regulator, but I nearly fell out of my seat when I heard what the Chairman of the U.S. Commodity Futures Trading Commission (CFTC), Christopher Giancarlo, said at today’s hearing with the Congressional Committee on Banking, Housing, and Urban Affairs.
In case you missed it, here’s his opening statement:
With your permission, I’d like to begin briefly with a slightly different perspective, and that is, as a dad. I’m the father of three college age children, a senior, a junior and a freshman. During their high school years, we tried to interest them in financial markets. My wife and I set up small brokerage accounts with a few hundred dollars that they could use to buy stocks, yet other than my youngest son who owned shares in a video game company, we haven’t been able to pique their interest in the stock market. I guess they’re not much different than most kids their age.
Well something changed in the last year. Suddenly they were all talking about Bitcoin. They were asking me what I thought, and should they buy it. One of their older cousins, who owns Bitcoin, was telling them about it, and they got all excited, and I imagine that maybe members of this committee may have had similar experiences in your own families of late. It strikes me that we owe it to this new generation to respect their enthusiasm about virtual currencies with a thoughtful and balanced response, not a dismissive one, and yet we must crack down hard on those who try to abuse their enthusiasm with fraud and manipulation.
That’s just about as good as you’re gonna get from a government regulator. Beyond the fact that he’s advocating an entirely reasonable approach, I was shocked to see how well he had his finger on the pulse of one of the most significant and often overlooked aspects fueling Bitcoin and crypto assets overall, the generational factor.
This is something I’ve touched on in the past, most specifically in the post, The Generational Wheels Are Turning:
The financial crisis of 2008/09 similarly shattered the worldview of tens, if not hundreds of millions of people across the globe. I believe that the old manner of doing things as far as organizing an economy and society died for good during that crisis and its aftermath. Sure it’s been shadily and undemocratically propped up ever since, and we haven’t yet transitioned to what’s next, but for all intents and purposes it’s dead. It’s dead because it has no credibility.
Increasing numbers of people accurately see the institutions that currently manage our lives as outdated and corrupt. More importantly, many of us don’t want to simply replace the current crop of unethical people in charge with a new bunch, we want to completely change the way things are done at a systemic level. This is precisely what lies at the heart of Bitcoin, as well as decentralized, trustless systems in general. If there’s any fundamental lesson from history it’s that human beings cannot be trusted to use power and authority altruistically and wisely. As such, it’s imperative that we distribute those things as much as possible.
If you aren’t observing what’s currently happening with regard to Bitcoin’s ascendance (and crypto assets more broadly) from a generational perspective, you’ll completely miss the big picture. The Baby Boomer generation, which has dominated so many aspects of our country for so many decades — including the overall narrative of everything — is finally heading off into the sunset.
The perspectives of an entire generation of young Americans were forged during the corruption and lawlessness of the financial crisis. They know the financial system is a rigged fraud, and they know they got ruthlessly swindled before even graduating high school. They inherently understand these things, which is why they’re attracted to Bitcoin and not equity and debt securities. This is the exact backdrop that Chairman Giancarlo described in his opening statement, and I doubt this outlook will change any time soon.
When I see old finance people sound off on Twitter, the level of condescension, arrogance and ignorance toward Bitcoin is striking. It’s as if they haven’t talked to a person under 30 in the past decade, or if they have, they just ignore everything they have to say. Who do you think is going to shape the future of this world? Dismiss younger generations and mock their worldview at your own peril.
As I noted in my prior post:
If you want to try to figure out where we’re headed, you need to get out of your own head and into the minds of younger generations. While it’s fun to mock millennials and avocado toast, this is one of the most systemically screwed over generations in a long time. Thrown into the job market in the midst of an economic collapse, they watched their parents lose their homes while Wall Street got bailed out. These are lessons and experiences that stick around for life and fundamentally shape how one sees the world. The younger generations aren’t going to be interested in tinkering around the edges of the current paradigm, they’re going to want to replace it entirely. They have no loyalty to a system they’ve witnessed do so much damage.
I didn’t expect a U.S. regulator to get this, and for that I am thankful. So thank you Mr. Giancarlo, for having an open mind and listening to your children. After all, they’re the ones who will have to live on this earth a lot longer than us.
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In Liberty,
Michael Krieger
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Message heard. I am a believer in plant value. Supply and demand will take care of the rest.
Exactly!
Baby boomers heading off into the sunset? Well at least they managed to create bitcoin before they left. After they first had created the pc, internet, email, social media etc.
From that same post, but not included in the excerpts.
If you’re a Baby Boomer please don’t take this the wrong way. This piece isn’t meant to disparage older generations while mindlessly elevating the youth. Many of the tools and ideas now being embraced and implemented into our society were developed by brilliant minds many years ago, and we should always pay homage to the gigantic shoulders on which we stand. Pushing 40, it’s not like I’m some spring chicken anyway.
As someone who is technically a baby boomer, I know that the list of bad things far outweighs the list of good things from that generation, SG.
So you may want to dismount off of that high horse, before you fall off of it and break your neck.
I agree. I am a babyboomer and I am honestly ashamed of the mess that we have left to future generations. It’s the debt that is so selfish and unfair. Basically we have lived way beyond our means and left check to be paid for by generations to come. Debt is basically a draw on future productivity. It can and will be cleaned up but it really is disgraceful.
I hate to break the bad news. Crypto has totally failed as a currency. It will never make it as a currency or even come close to replacing the dollar. In my life time I have built and improved upon just about anything you can imagine, race cars, race bicycles, award winning heating systems, computers, boilers, engines, websites, html programming, trading stocks options and futures, entire bathrooms and more. I understand how things work.It is what I am best at. I am very good at it.Not how people say something works but how it actually works or reality.
Transaction times are way to long, mining uses way to much energy in a pointless way, There are way too many currencies to choose from and it is way to easy to start a new one, Crypto is way to volatile.
Crypto doesn’t function well as a currency. Crypto is mostly a speculative vehicle that operates in the same way as a ponzi scheme that is sure to crash once everyone is “All In” and everybody has heard of it.
Crypto does work well as a “Western Union” for transferring funds from country to country but there are better ways of doing that too. Just not developed yet. and some Crypto works well in the black market.
It’s funny John. Your arguments about why crypto currencies will never last sound very similar to the arguments I personally heard from major record label execs back in 1998-99 explaining why p2p music downloading of MP3 files would “never make it” as a viable option or “even come close to replacing” CD’s.
How many record stores do you see anymore? How many people buy CD’s anymore other than hard core audiophiles like myself?
And here we are 19 years later and streaming services like Pandora, etc. are rapidly replacing MP3’s as most peoples preferred way to buy music.
John,
While I agree that many crypto currencies have some of the problems you state, none of those problems are an inherent property of CCs and none are technologically insurmountable.
Why don’t you compare the speed, efficiency, and general functionality of automobiles 100 yearr ago with the ones today?
I agree with Mike on 98% of the stuff he writes here. I really like his view points. He is very good at what he does.
But we disagree on Crypto.
I find it’s the youngsters who are disparaging toward us old gits, not the other way round 🙂
“You don’t understand cryptos, get with the times old man” and so forth.
I do take your point that the younger generation has been hit hard with student debt and few career prospects. I’m from the UK not the US and over here we haven’t the massive unemployment (yet). But they’ve still been shafted – it’s more a case of student debt and no prospect of ever affording a house. Average London house prices are about 15 times earnings.
All the people I know who are interested in Bitcoin, young people included, are interested because they saw it as a way to make a quick buck. They aren’t interested in the libertarian or technical ideas.
Interesting because I have the exact opposite experience, including myself personally, who was attracted to it and an early supporter of it for philosophical reasons.
So now you know at least one person who goes against your experience. There are countless others.
Due to the nature of my business I deal with millennials on a daily basis.
The ones I have discussed it with cite all 3 reasons (libertarian, technical, and speculative) as to why they bought into Bitcoin and other crypto currencies.
Which is hardly a surprise.
Please explain why that’s “hardly a surprise”.
I’m 71.. one of the oldest boomers. But I’m thrilled with crypto, for the political reason… cut down the financial fiends. I wish more folks knew that we could fix our nat’l debt, infrastructure, etc the way the Colonys, Lincoln, and others did… with debt free money. Please check out ‘The Chicago Plan Revisited’ … so more of us will know the options when the SHTF.
It’s hardly a surprise that all 3 factors play into their decision making process to buy crypto.
i’ll ask one thing.
what if crypto is just a tool. like the ink and metal plates invented for the printing press.
arguably crypto is just a new tool of software combined with not particuarly innovative hardware (yet, watch out samsung is going after bitmain’s chips) —and the miners hooking up to the network of telecommunication fibre optics.
what if crypto is just another digital tool. what if.
tools are tools. praising a tool is not very inciteful. it’s about praising how the tool is used.
i think ‘crypto’ will be far far more powerful than mike even states. mike is understating how it will take over the world.
it will penetrate the globe just as have cannon, electricity, bicycles, the wheel, the pen and paper, boats. etc….
the question is where do you see crypto going ? where and how will this tool be predominantly used in our future, ‘for the people’ ‘against the people’ . both of course.
i believe , however, that the establishment understands how very powerful this tool is. they will use it as they please, and the people of the world will do as they please as well.
but the insittitional versus the individual perogatives are a feature of the human hegelian dynamic. they will always be with us.
i think to celebrate the invidial and liberty loving aspects of crypto with pause to think how crypto can IS and very much WILL be used by the establishments against the free individual and free people’s is to imagine one half of the story without the other.
mike , you are a relentless cheerleader. not a bad thing. but can crypto’s SUCCESS actually have some narratives where it’s power will be used against people?
i’d argue blockchain can also lead partially to a world of humans in chains. i’ve written sci fi stories about crypto 5 years ago some of the details of which have already materialized.
if youu work in the crypto space as ai do now, i think many can predict the future of the narrative.
i’ll make one prediction. the ‘identity’ wars are coming.
you think that the recent efforts of TSA to require all domestic travellers to have a federal ID are historically oppressive?
relatively speaking perhaps. but if you see what i see. i think the TSA as we see it now is actually a teddy bear.
Crypto is going to be something like the matrix. not where your brain is jacked in, but where your entire existance on paper is digitized and ‘decentralized’ by the authorities not for your benefit but to track everything , EVERYTHING about you.
crypto is the foot in the door and the narrative of liberation, while not wrong, is just , at this point, helpful for bringing everyone out of the escape path into the digitzed brave new future.
the social caste system will , in some ways, be very much reinofrced by this cultivation. the panopticon and omniscience factor of those groups and individuals that control our shadow state will grow beyond what one could ever imagine. the ‘real’ matrix is indeed coming. it’s not the fantasia of a childs science fiction entretainment flick. it is a digital future where your lack of cooperation with the chains dooms you to marginal existence and misery a t the level of grand social participation. it will be unimaginably organized and controlled from the top down, without you ever even knowing it most of the time…so long as you participate.
but there will always be room for rogue sophisticated actors to make use of the ‘crypto’ for liberative purposes. there’s always a fight .any order creates a spontaneous resistance to itself. the nature of things.
full disclosure.
that said, i’m still just jealous of crypto millionaries. we all want a little bit of freedom that money supposed can buy us. after all, the only true commodity is time and money does indeed buy that, as it does food and a roof over ones head. lest us forget the realities of being a human being regardless of nations, systems, moneys, debts, etc….you cannot eat crypto , nor gold, nor money, but food alone and sustains us. the soul humanizes us. and the metaphorical pen civilizes us. money organizes us. crypto is then next era of human organization. the world was not flat before, but it might be getting closer.
Intresting how the baby boomers , were all so anti establishment, anti Nixon ( government) and simply anti evrything but pot and free love .
Now fast forward into to today … & look at the devestation they have created in the world markets / government corruption! It’s really astonishing …. the Level of hipocrisy these gentle free love people have reeked !! It must be said I was born in 63 so .. but am a mason !