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The UK has already failed once at investing in digital asset technology. This blog explains why the UK has the potential to lead Bitcoin innovation in Europe
Bitcoin has always been a key part of the Out of This World Investment portfolio. For this reason, along with being based in Wales, there has always been a connotation surrounding the infamous Bitcoin story that put Wales on the map. For those unfamiliar, in 2013, a man from Newport accidentally threw out 7,500 Bitcoin – a cool £175 Million today. Since then, a huge effort has been made to excavate a landfill in an attempt of retrieving the computer hard drive containing the Bitcoin. This unsuccessful story somewhat represents the UK and its treatment of Bitcoin and digital asset technology over the last decade.
Firstly, the Bitcoin network is exponentially spreading across the world. One of the reasons for this is down to the growing active number of miners and self-running nodes at present. Another reason is undoubtedly El Salvador and its lofty ambitions since making Bitcoin legal tender. Most notably, no one has yet staked its claim in Europe, thereby providing the UK with a fantastic opportunity of adopting an industry-disrupting technology.
The astonishing thing about this is that it wouldn’t have been the first time the UK had the chance to cement blockchain innovation on its land. In addition, over a decade ago, Simon Dixon wrote the first-ever Bitcoin book that addressed its core principles. It outlined his thesis for why governments must understand the importance of financial technology for transforming banking and finance e.g. digital assets and virtual currencies. Interestingly, Dixon gave copies of his book to many MP’s at the time and worked closely with the government for over 3 years, even speaking at the House of Lords.
Unfortunately, what once were leaders in financial technology, the UK’s risk-averse stance on this innovating industry led to UK-based companies having to change jurisdictions. Many of today’s leading names in the industry including Coinbase, Circle, and Bitfinex were looking for a financial hub before going public. Tragically, what was certain to be in the UK ended up getting rejected, and instead left these businesses with no option but to move overseas, taking all the innovation with it. As an emerging asset class already worth over a $1 Trillion, the disappointment of potentially front-running it is still felt today. Currently, Matt Hancock MP, is leading the calls for promoting and supporting fintech and crypto, stating “Britain will be left in the dust with our tepid attitude to cryptocurrency”.
With the global rise of Central Bank Digital Currencies (CBDC), “Britcoin” has been labelled as the UK version. However, unlike Bitcoin which is censorship-resistant, fixed in supply and absent from government intervention, a CBDC just enforces more government control. Take China and its authoritarian digital e-Yuan for instance. Moreover, whilst the digitisation of the world is an inevitability people shouldn’t refrain from, it must be highlighted that privacy and self-ownership has to be at the forefront of a western democracy. Otherwise, people run the risk of very quickly becoming void in making financial decisions independently and freely.
Additionally, current innovation is in El Salvador, the heartbeat of the fastest-growing industry and network in the world. Unless the UK makes direct steps at supporting regulation and loosening the current restrictions on UK brokers, the innovation will remain away. Furthermore, the Bank of England must find a new way of integrating its CBDC whilst also providing free-market opportunities. If they fail to do that, the alternative becomes clear: A decentralised protocol that is both immutable and anti-fragile.
Finally, the world is honing in on climate change, sustainability and renewability. The Bitcoin network is supposedly estimated at 50% renewable and is constantly finding new innovative ways to become 100% renewable. In El Salvador, the use of volcanoes and dams are being considered as methods for extracting and harnessing energy. For instance, hydropower will be able to utilise the energy produced in return for helping the mining process, reducing costs and pollution at the same time. Whilst the UK doesn’t have volcanoes, there is a wide range of dams and waterfalls in Wales and Scotland that can be used to create renewable energy in the form of mining, electric vehicles, and more.
In summary, the direct consequence of the UK taking the time now to invest into digital asset companies fostering renewability will ultimately see them years ahead of other countries in the not so distant future. As always, it will depend on the self-interest of politicians in power and whether or not they choose to accept what is undoubtedly the future of money, technology and widescale renewability.
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