CHAPTER NINE — MONEY AS AN AMPLIFIER
Money can be viewed as many things. It is often described acting as a medium of exchange, a store of value and a unit of account. As discussed earlier, one can boil down the definition even further. At its very core, money can be defined as a linguistic tool for expressing value, or even just gratitude, to another person, through space and time. From this perspective, money acts as an amplifier of a person’s personality. If you’re altruistic by nature, suddenly having lots of money won’t make you less generous, but rather enable you to express your personality in more ways. Unfortunately, in a cultural environment such as the one we live in now, credit is cheap and economic incentives are skewed. Impulsive, irrational financial decisions in all segments of society are dictating all of our lives. If we didn’t have inflation, in other words — if we had sound money, we would be incentivized to save rather than spend. Sustainability would come naturally to us. The lack of sound money also affects the impact money has on our personalities, and its effectiveness as a personality amplifier. Sound money would allow for more honesty and more real solutions to more real problems.
One of the problems that arises from speaking a malfunctioning language of value is that it affects freedom of speech. If the system is rigged to focus on everything but the underlying problem, the entire political landscape becomes a cosmetical charade to keep us from asking the really hard questions about how a human society really ought to operate. Can a person be truly honest publicly in an environment that constantly forces him or her to work harder and harder to afford higher and higher cost of living due to artificial inflation? Those that are wealthy enough might, but the system keeps funneling power from the common man to the elite. In an era where a handful of companies handles almost all internet traffic, subverting free thought can be a very dangerous thing. In addition to the subtle subversion originating from a flawed monetary policy, the titans of Silicon Valley seem more and more prone to give in to the angry mob that proclaim to stand united under the banner of social justice. Political correctness, that spawned out of a collective feeling of guilt in some parts of the western world, plays a large part in the wave of censorship that has been drowning out some of the more controversial content creators from their respective platforms lately.
We live in dangerous times when it comes to freedom of thought. The old media houses keep claiming that their world view is the only honest one while regular people, and all their different opinions, are increasingly challenging what is and what isn’t to be considered as news. The increasing distrust of politicians all over the globe might be a product of fear mongers to some extent, but it is also a direct consequence of the fact that people have more options when it comes to how they consume information about the current state of the world. In other words, brainwashing is not as easy as it used to be. Unfortunately, distrust in politicians has mostly led to more extreme variations of the same thing. Nationalism on the right and socialism on the left are ideologies on the rise on both sides of the Atlantic Ocean. These are red herrings at best. Politicians won’t give power back to the people, that’s just not what they do. In the next decade, many of humanity’s most important decisions will be made. The fate and future of the EU, China and the US will be determined by these decisions. You won’t be able to alter or even influence them but you will be able to choose to what extent they will dictate your future. There are ways of opting out of everything. You can quit watching TV, stop reading news papers and fill your roof with solar panels but most importantly, you can opt out of the financial system to whatever extent that suits you. Bitcoin is a voluntary system, democracy isn’t.
2018 saw the rise of the so called intellectual dark web. An umbrella term for a collection of free thinkers who have used the internet to defend their respective positions in a variety of matters, and freedom of speech particularly, for the last couple of years. Being concerned with the rising trend of deplatforming and censorship on major social media platforms, some of the more popular members of the group are now trying to find alternative ways of monetizing their content. Ten years after Bitcoin’s immaculate conception, major renegade thinkers are starting to oppose the Orwellian tendencies of the Silicon Valley giants. All the tools we need for taking a stance against censorship are at our disposal, but it’s up to each and everyone of us if we dare to use them or not. The internet keeps on disrupting every imaginable business model and shows no signs of slowing down this process. On the contrary, peer-to-peer solutions like Über and Airbnb, are increasingly taking over and exposing “regulated markets” for what they truly are. Cartels. In an era where credit card companies have the power to disconnect any user with an unwanted spending pattern from their money, centralized databases can be very dangerous and a business model is not really disrupted until every rent-seeking middle man has been removed from the equation. Whoever controls the money supply is the ultimate middle man. That’s where the cord needs to be cut if we truly want to emancipate ourselves. You decide. Not them. You.
The phenomenon of fake news is easier to understand if you remember how much bigger newspaper organizations used to be in the past and what made them smaller. Their whole revenue model got disrupted when the internet turned the advertising industry on its head. All of a sudden, ads were no longer a guessing game but a precise tool that could be used to collect vast amounts of data about how many potential customers a product would have and later on, specific data about each and every customer. This led to a downsizing of the news organizations as their ad revenues started to shrink. Simultaneously, everyone on earth was given the ability to spread whatever they had to say to everyone else and to monetize their voices through ads. Both the old and the new media quickly started to accuse each other of spreading false information and the trust that we had all outsourced to journalists, started to erode. Nowadays it’s harder than ever to separate trustworthy sources from untrustworthy ones. On the other hand, propaganda machines are harder to build, since everyone’s able to hear different perspectives on every subject. What would happen if money itself was to be disrupted in the same way that the old media houses were? What if people started to label “the full faith and credit of the national bank of nation x” as fake news? What happens when we collectively start to question the credibility of our Dollar bills or Euros or Yen? We’re about to find out and we can still choose what side of history we want to be on. It’s hard to separate real from fake when it comes to news but when it comes to money itself, the perfect tool for evaluating the realness of it, is already there. The market will tell you what’s valuable and what’s not. Over time, the truth will reveal itself.
Money is an amplifier of ideas and money doesn’t really care if the idea itself is good or bad. Political ideas often have the opposite effect of what their intended, or at least advertised, effect is. An income tax for instance, stops generating revenue for the state as soon as the tipping point of the Laffer curve is reached. After a certain level, the income tax just prevents people from working altogether. Especially if there’s a social insurance policy in place. The Robin Hood -esque narrative of the left is often portrayed as a morally noble thing by its proponents despite the growing number of examples of the opposite all over the the globe. The internet startups are leaving San Francisco for Texas and the misfits start flocking in instead. People are literally dying from drug overdoses on the streets while the politically correct overpaid hipster in the neighbouring café enjoys the feeling of superiority that comes with the environmentally friendly paper straw he just got in his chai latte. Opportunist men in their thirties claim to be refugee children in order to leech on the welfare states of Sweden and Germany, creating a political divide and a much worse situation for those in actual need of help. In a world with sound money, the greedy would have to provide a lot more value to their fellow man in order to accumulate wealth since money would be harder to come by. We’d better remember that Robin Hood was first and foremost fighting against taxes. Money is an amplifier and unsound money inevitably produces unsound societies.
As the Bitcoin network grows, so does its fee market. Some people argue that because of this, Bitcoin cannot scale. This viewpoint stems from an unsound attitude towards Bitcoin. Some loud-mouthed actors in the cryptocurrency community start to bicker and moan whenever Bitcoin chooses to implement or, more often than not, chooses to not implement a proposed upgrade. Their view of what Bitcoin ought to be doesn’t matter to Bitcoin. Bitcoin’s ironclad resistance to the whims of the self-entitled early investor Tony Stark wannabes of its social media entourage is one of the biggest aspects of what makes it so special. Imagine trying to buy a cup of coffee with gold. In order to make a safe transaction, where the validity of your tiny gold pebble was verified by several independent chemists and your pebble was transported to your local Starbucks in an armored van, you would have to pay an absolutely enormous “fee”. Despite its obvious flaws as a medium of exchange, gold is very valuable. Despite its complicated divisibility, its lack of eligible usage properties, its lack of a decentralized layer 2 scaling solution and its relatively easy confiscatability, it remains a good store of value. Bitcoin is also, regardless of what anyone thinks about it, a store of value above a medium of exchange. This is more important than it might seem. If bitcoin should fail at holding value long term, its whole value proposition would disappear. A fast and smooth, highly centralized medium of exchange is not a groundbreaking invention in any sense. We already have plenty of those. It is quite arrogant to think that your influence could steer Bitcoin in another direction. You can deceive people into thinking that your fork of Bitcoin is the real deal, but that will damage your reputation more than it will damage Bitcoin in the long run. A fork of Bitcoin ignores Bitcoin’s consensus rules and that makes a fork little more than any other copy-pasted code.
Admitting that you’re a Bitcoiner publically is not without risk. Not only does it pose a personal risk to you as you become a potential target for burglars and thieves, but in doing so you also put your reputation at stake. Not mainly because of the reason people think, namely that bitcoin might not work and its price might go to zero because of this or that. The biggest damage done to the reputation of us Bitcoiners is being done by the seemingly endless amount of scammers and free-riders that this technology attracts. Even though the Bitcoin network is a lot bigger than any of its competitor’s networks, people outside of the cryptocurrency space are having a hard time telling the difference. As most (if not all) of bitcoin’s rivals are scams, bitcoin is being perceived as guilty by association by a large portion of the general public. This may cause the public Bitcoin enthusiast a lot of reputational damage short term. Long term however, is a different matter altogether. Long term, denying the impact bitcoin will have might be a far worse opinion to hold. The people going public with their ill-informed skepticism to something they don’t fully understand will be remembered in the same manner as those comparing the internet to a fancy fax-machine in the nineties at best. Bitcoin is hard to understand because it shatters many political ideas since money becomes virtually non confiscatable in a bitcoin dominated world economy. Just as the business models of the twentieth century that revolved around charging people for selling them copies of films, music or books got shattered by subscription services such as Netflix, Spotify or Audible, macroeconomic business models based on the notion that you can force people to crowdfund projects through taxes or inflation will suffer the same fate if they don’t adapt quickly enough. This realization is way too big a mental somersault for some people to grasp. It turns how we think about value on its head and forces us to accept the hard truths of economics, currently only truly understood by economists of the Austrian variety. Given a generation or two though, bitcoin’s advantages will simply be undeniable.
Thank you for reading my book!
Chapter Ten — The environment,
Chapter Eleven — A new form of life, and
Chapter Twelve — The years ahead
…are available in the full book.
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