Welcome, Netizen!
The Netizen Revolution is a newsletter for investors interested in learning about Bitcoin, macroeconomics, and the emergence of the web3 economy.
My name is Brian - I’m the Founder & CIO of Netizen Capital, a global macro digital assets fund investing in Bitcoin, Layer 1 blockchains, and DeFi protocols building the web3 economy. We launched the fund in late 2021 as a way to help our family & friends navigate the unfolding paradigm shift enabled through the creation of Bitcoin.
We’re living through history. We’re transitioning from citizens to netizens. From state money to decentralized money. From nation-states to network states. From a trust-based economy to one of self-sovereignty.
How Did We Get Here?
If you’ve paid any attention to the global economy over the past two decades, you may have noticed there is a lot that doesn’t make sense. Anytime there is a war, crisis, or endemic, the U.S. government’s response is to increase the money supply. A few billion here, a few trillion there. Eventually, it makes you question “what is money?” and “how did we get here?”
After WW2, the U.S. was relatively unscathed and owned two-thirds of the gold supply. As a result, the Bretton-Woods System in 1944 established the USD as the reserve currency of the world, with the USD pegged to gold at $35/ounce. USDs were “as good as gold.”
A few decades later our allies became concerned we could no longer maintain the USD-gold peg (they were right), and they requested their gold back. In response, President Nixon decoupled the USD from the gold standard in 1971 - officially creating fiat (trust-based) money.
This led to the Petrodollar, the death of our middle class, and the offshoring of our industrial economy. In exchange for U.S. protection and American weapons, Saudi Arabia would agree to purchase U.S. Treasuries with the profits from selling oil in USDs, effectively allowing the United States to print money (issue U.S. Treasuries) to purchase oil (and eventually other goods and services).
In a post-gold-standard world, money became a circular Ponzi scheme, built upon trust in two key institutions, The Federal Reserve and the U.S. Treasury.
Where Are We Headed?
As our trust-based economy grew, so did our debt burdens - debt, that the U.S. government has no ability (nor intention) to ever payback. As a result, the U.S. government has been sterilizing our purchasing power for decades, leading to financial asset inflation, which disproportionately benefits the wealthy at the expense of the working class.
The underlying problem is that our society is built upon fake money which requires blind trust in our institutions to act with integrity and fairness. This has led to over-indebtedness and massive inequality.
We believe the 2008 Global Financial Crisis marked the beginning of the Fourth Turning for our social, political, and economic climate.
Satoshi Nakamoto’s Bitcoin white paper in 2009 offered us a solution - an electronic peer-to-peer sound money independent of government. Bitcoin and smart contracts fundamentally shift how financial systems distribute trust, eliminating the roles of centralized authorities in favor of an ecosystem built on computer science and cryptography.
Since the emergence of the COVID-19 endemic, the U.S. government has created more than $5 trillion of new debt. The supply chain disruptions seem never-ending, a new COVID variant emerges every few months, and households globally are seeing their purchasing power quickly erode from inflation.
Our view is that an inevitable inflationary deleveraging will end the USD’s role as the global reserve asset. Many argue what will take the USD’s place - a Central Bank Digital Currency (CBDC), gold, or another foreign currency. We would argue the world has already chosen Bitcoin, with nearly ~$1 trillion in value stored.
With its decentralized governance system, codified monetary policy, and inextricable relationship with clean energy, Bitcoin has the potential to fundamentally change the world for the better.
History doesn’t repeat, but it rhymes. Over the next few decades, this paradigm shift will unfold.
What To Expect
While this newsletter is written specifically for investors in Netizen Capital, I want to make this information free to the extent anyone wants to follow along. Hopefully, you can make some money along the way as well.
Inside each report, I will touch upon the following:
Macroeconomy - What macroeconomic regime are we currently in (Goldilocks, Reflation, Deflation, or Inflation)? How is COVID disrupting the global economy? What’s happening to the USD? What will be the U.S. policy response?
Bitcoin Update - What is the Bitcoin on-chain data showing? Where are the signs of adoption? What is being built in the Bitcoin ecosystem?
Layer 1 Blockchains - Which smart contract platform will solve the blockchain trilemma? Will we end up with an interoperable, multi-chain world? Which Layer 1 is seeing the most adoption? Which ecosystem will see the most DeFi usage?
As well, I will be sure to sprinkle in some more philosophical thoughts about what’s going on and how we can take advantage.
Remember my friends…chaos is a ladder.
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Disclaimer - Nothing in here is investment advice. Do your own research.
