@ Kudzai Kutukwa

2024 has turned out to be an interesting year for Bitcoin, probably better than what most expected. From the approval of spot Bitcoin ETF’s in January, increased adoption by corporations as well as pension funds following the Microstrategy playbook, to talks of creating Strategic Bitcoin Reserves (SBR) by different countries including the United States of America. Of course the European Central Bank also had to weigh in with their luddite perspective and let us know how early adopters “steal” economic potential from new comers. Then came the big one when the Bitcoin price crossed $100 000 for the very first time on the 5th of December, to much pomp and fanfare. Yet amid the euphoria, it’s critical not to lose sight of Bitcoin’s revolutionary mission: the separation of money and state. As conversations about the impending Bitcoin bull run and $1 million price predictions dominate online chatter, a darker reality emerges. Many Bitcoiners appear willing to compromise with governments and institutions—the very entities Bitcoin was designed to render obsolete—all for the sake of pumping their bags. While I am definitely not trying to dictate to anyone what they should be doing with their Bitcoin or how they ought to think; but I am trying to remind those that are still interested in the separation of money and state not to lose sight of the ultimate goal.This article is not meant to be a hot take for stirring any controversy or anything of that sort, just a different perspective that’s all. ## Bitcoin: A Peer-to-Peer Electronic Cash System The opening line of Bitcoin’s whitepaper isn’t just a technical statement; it’s a declaration of war: “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.” It’s clear from this that Bitcoin was designed to be a digital means of exchange first that could be transmitted without a third party. Put another way, Bitcoin was created as decentralized digital cash—a tool for economic freedom, bypassing intermediaries and state control. Yet today, narratives like “digital gold” and SBRs dominate the discourse, reframing Bitcoin as a reserve asset for nation-states and institutions. While these narratives acknowledge the failings of fiat, they risk chaining Bitcoin to the very systems it was designed to dismantle. ## The Lessons of Gold: A Warning for Bitcoin History provides a cautionary tale in gold, once a cornerstone of monetary sovereignty but was gradually co-opted and centralized by the very powers it sought to keep in check.The erosion of gold’s monetary sovereignty began in earnest with the creation of the Federal Reserve in 1913. This new central bank was designed to stabilize the U.S. economy by controlling the money supply and interest rates, yet its very existence marked a shift away from the decentralized, market-driven gold standard. By granting the Federal Reserve control over the issuance of currency, the link between paper money and gold—a scarce and neutral medium of exchange—began to weaken. Over time, gold was demoted from being the backbone of the monetary system to a reserve asset held predominantly by central banks. By 1933 the process had accelerated that gold was permanently kneecapped in 1933 with the signing of Executive Order 6102 which criminalized private ownership of gold by American citizens and subsequently forced them to sell their holdings to the government at a fixed price. While framed as a necessary measure to combat the Great Depression, the true consequence was the removal of gold from public hands, consolidating it within the coffers of the state. Gold was no longer the people’s money—it had become a strategic reserve for government monetary policy. Gold’s role as a medium of exchange was further diminished by the Bretton Woods Agreement of 1944. This international accord established the U.S. dollar as the global reserve currency, ostensibly backed by gold. However, this system created an asymmetric dynamic: central banks could trade dollars for gold, but private individuals could not. The result was the effective demonetization of gold for the average person. It became a commodity stored in vaults, a relic of a bygone monetary system, while fiat currencies assumed its role as the dominant medium of exchange. The final nail in the coffin came in 1971 when President Nixon closed the gold convertibility window. This not only fully entrenched the era of central bank coordinated alchemy but crushed the productive capacity of every individual without proximity to the money printer. This historical tale reveals a dark and inconvenient truth: gold lost its power not because of any inherent flaws but because it was centralized gradually and systematically detached from its role as a medium of exchange. Its transformation into a mere commodity made it vulnerable to state control, paving the way for the unchecked proliferation of fiat money. The story of gold’s co-option should serve as a rallying cry: Bitcoin must never become just another asset locked away in institutional vaults, disconnected from the very people it was designed to empower. ## The Illusion of Reform While it remains true that Bitcoin is indeed a trojan horse designed to obsolete central banking, it would be a bit naive to expect these fiat alchemists are just going to just roll over and play dead. Bear in mind that the dollar is the oil that drives global commerce and capital markets, which is a financially lucrative position that the powers that be won’t give up without a fight. In case you hadn’t noticed, the fight is already on and it’s not as hostile as most would have expected. As calls for an SBR get louder by the day, many view this as a win. While it may seem on the surface like capitulation by state actors, the history of gold above should serve as a cautionary tale. Not all Bitcoin “adoption” is created equal. One of the key points that is usually raised in favour of nation states adopting an SBR is that it would force the state to adhere to tighter fiscal discipline and controls. A point that I am personally skeptical of for a number of reasons. For starters, the fundamental issue with fiscal indiscipline is the state’s monopoly on violence and the issuance of money. If history is any guide, as long as the state maintains control over the power to create money and enforce legal tender laws, it will find ways around nominal constraints. Legal tender laws force individuals to use state money, enabling governments to devalue it through inflation. Furthermore fiscal discipline is achieved by balancing budgets and curbing unnecessary expenditures, not just by accumulating reserves. An SBR in and of itself will do nothing to address the structural issues that drive government deficits, such as; excessive entitlement spending, military-industrial complex overreach and bloated bureaucracies. The problem is not the asset backing the currency but the moral hazard of government control over money. In theory while an SBR is viewed as a “disciplining mechanism” that will constrain state spending; the reality is that the state has always systematically undermined any constraints on their monetary power. Even when the dollar was officially gold-backed, the government found ways to expand spending beyond its means through techniques like suspending convertibility, changing redemption rates, and eventually abandoning the standard entirely. There's no reason to believe that an SBR would create any more discipline than gold did. An SBR would likely follow the same pattern as gold reserves - initially presented as a disciplining mechanism, but gradually subverted through: 1. Fractional reserve practices 2. Creation of paper claims exceeding actual Bitcoin holdings 3. Development of complex financial instruments to leverage Bitcoin reserves 4. Selective suspension of Bitcoin redemption rights 5. Gradual reduction of backing ratios Bitcoin fixes many things, but let’s not delude ourselves—it’s not the magic bullet for every societal ill. Bitcoin may be provably scarce and fully decentralized, but it doesn’t fix corrupt human hearts hell bent on maintaining a system of financial slavery. Nation-state adoption of Bitcoin in its current form should not be mistakenly interpreted as the state nobly surrendering the money printer to advance individual freedoms. The most likely scenario, in my view, is that most governments will continue to issue fiat currency against their Bitcoin reserves, engaging in the same inflationary practices that debased gold-backed systems. The problem is not the asset backing the currency but the moral hazard of government control over money. History has shown us time and again that even the soundest monetary systems falter when subject to the whims of centralized authority. The only way to achieve true fiscal discipline is to abolish legal tender laws and allow competing currencies, including Bitcoin, to flourish in the free market. As long as legal tender laws compel the use of fiat currency, governments will continue to inflate their money supply at the expense of the public, regardless of how much Bitcoin they hold. An SBR would not change this dynamic. Bitcoin, locked in their reserves, will become a tool to prop up the very system it was designed to destroy. ## The Stakes Couldn’t Be Higher The aim of this article isn’t to foster doomerism or any sort of pessimism, but it’s a reminder of what’s at stake. The allure of “number go up” might excite speculators in the short term, but it risks diverting attention from Bitcoin’s real purpose. A rising Bitcoin price is not a celebration of Bitcoin’s growing value—it’s a grim indictment of fiat’s accelerating demise. Each new all-time high is a reflection of fiat’s gradual but inevitable erosion.The real tragedy lies in misunderstanding this dynamic.The true measure of wealth is not fiat gains but sovereignty—freedom from the clutches of a system designed to perpetuate dependency and control. To achieve this, Bitcoiners must resist the temptation to seek validation from governments and institutions. Instead, they must champion Bitcoin’s role as a peer-to-peer currency, a medium of exchange that operates outside the reach of centralized control. The battle is far from over, but the path forward is clear. The higher Bitcoin climbs, the more desperate the fiat establishment will become. Let us remember: the goal is not to join the system but to transcend it. Only by keeping this vision alive can Bitcoin fulfill its revolutionary promise as the people’s money—a beacon of hope in a world shackled by financial oppression.