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Daily Ramble
I used to believe in our institutions. And I hope to in the future. But I’ve realized this is not a time to believe in them. This is a time to allow them to be replaced. What am I talking about? The loss of popular sovereignty.
I was listening to a podcast on the life history of Frederick Douglass, an African American man who escaped slavery and became a powerful voice in the abolitionist movement of the mid-1800s. His life’s story is not the thrust of today’s Ramble, but a phrase he uttered piqued my interest: popular sovereignty.
Popular sovereignty is an idea with roots in the Enlightenment period. It states that the rule of law is based on the consent of the governed. Voting was how the governed have historically offered their consent. And it has worked tolerably well for a couple of centuries. But I don’t see it working now. At least not in the USA, where the population is straining against the seams of the idea. The cultural variation from state to state makes the unification of a single popular sovereign within the USA borders a tough pill to swallow for more than a few. Incredibly, a similar dynamic has happened roughly every 80 to 100 years for the last 500 years. Called the 4th Turning by the authors of the book of the same name, this period’s hallmark is a reimagining and rebuilding of institutions due to a crisis period — much like a caterpillar metamorphosing into a butterfly.
So it makes sense why the idea of “popular sovereignty” is giving way to the idea of the “sovereign individual.” (Sovereign means one who exercises supreme authority.) The institutions governing our lives have become increasingly inept at working for the people. As a result, a growing number of individuals feel their individual freedoms are being imperiled, whether through the marriage of international corporations and government, the surveillance state, the inability to decide on their children’s future, or the inability to transact money freely. As the crisis period moves further along, I anticipate seeing the gap between the “sovereign individual” and the “popular sovereignty” camps grow. Just think how wide the gap currently is between the unvaccinated and the vaccinated for a single, eye-opening example.
In this mercurial time period, our individual actions expressing what is most important for humanity will have an outsized impact on the future. We are no longer in Kansas any longer. Instead, if the last 500 years of 4th Turnings are a historical roadmap for our future, we will be living in a different societal reality by 2030. And the decisions we make now will shape the next 80 to 100 years for our children and grandchildren. So, for the sake of their future, I’ll leave everyone the questions I’ve been chewing on today: what legacy and society do I want to leave for my children and grandchildren? And do my actions today align with the legacy I envision? If not, what changes will I be making?
Farenheit 451 Things on the Interweb
Steamrolling the electronic equipment necessary to secure Bitcoin, an open, permissionless monetary network, smacks of booking burning efforts of yesteryear. I can imagine this will be an iconic video in another 100 years.
Bitcoin Price Prediction
Yesterday: $30.7k - $33.2k
Today: $29.8k - $33.2k
Weekend: $28.5k - $33.2k
Things are not looking great if you’re a bull. Each bounce up in price is getting weaker follow through before the bears push price lower again. Since we did not close yesterday about $32.2k, I anticipate we see $30k being tested, and given the number of times we’ve tested $30k, I’m not anticipating it will hold. I’ll be pleasantly surprised if it does! That’s my bearish bias speaking. Giving the bulls the benefit of the doubt, we could break $30k and see a sweep into the $28k region to set up a bullish reversal again. The weekend could also see some bullish relief too — or the weekend could bring a bearish nuke. The weekend is consistently a wild card when volatility is low, and we are trading in a region where decisions by large traders can move the market.
Bitcoin Q & A
Q: Is Bitcoin becoming more centralized?
A: No.
There are many different ways to consider decentralization. One of the best is the number of Bitcoin nodes on the network. The greater the number of nodes on the network, the more difficult it becomes to change the network rules. Currently, there are 13,000 nodes spread around the planet, which is up from 11,600 in January.
Another way to look at decentralization is by looking at hashrate, which measures Bitcoin’s security. The more global its distribution, the less any country influences the Bitcoin network. The best data, coming from April, shows that China’s hashrate has declined from 75.5% in 2019 to 46%, while the hashrate in the US, Kazakhstan, and Russia has increased substantially. With China shuttering mining operations this year, I anticipate the next look at the hashrate distribution will show the trend continuing.
Thanks for reading,
Kent
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