A Chronic Case of Bitcoin (Part 2)
Bitcoin Is Here To Stay. This Is What It Means.
In Part 1 of this article we discussed why America has a serious case of Bitcoin.
In part 2 we explore why it’s chronic and spreading.
Bitcoin itself is unstoppable. It turns out that a lot of things are, but we don’t often think about that fact. We of course can’t stop aging — that’s unstoppable.
We’ve also been unable to stop nearly everything that the government has set out to stop. For example, we can’t stop crime. We can just discourage it and punish it.
Our government can stop certain things. It can shut down a web site, or even an entire company. (However, doing this often only forces whatever the company was offering into a ‘black market’ rather than making that offering stop.)
Stopping Bitcoin is not so easy. Bitcoin is not a web site and not a company. It has no head office. It has no employees. It has no center of operations. It has no rulers. It has no assets. Bitcoin adjusts itself all by itself so that if energy resources are taken away from it, it simply requires less of it to survive. Bitcoin is built for ultimate survivability. It’s a good thing that Bitcoin is a good thing.
Take a look at China where the government there, with far greater control over the economy and individuals than exists in America, has tried on numerous occasions and in different ways to stop Bitcoin. It just hasn’t worked, at all.
Bitcoin would only stop if nobody in the world wanted it. It runs only because people choose to run it. So it runs only if it is good for people — or at least as long as people judge bitcoin to be good for them.
If you are considering the idea that Bitcoin can be stopped, perhaps the single-most important thing to understand is this: as long as someone—anyone, anywhere—is running Bitcoin, Bitcoin can’t be stopped. Lots of people, for lots of good reasons, want to, can, and do run Bitcoin.
With all this, it’s therefore not surprising that we see growing political support replacing political opposition to Bitcoin. There’s a growing base of supporters. Shrewd politicians are waking up to this. Older politicians are facing younger opponents who, like the rest of us, are warming up to the benefits of Bitcoin and the importance of legally protecting the rights of Americans to use it. Smart politicians are seeing those test results from the previous section too, and they want to win the support of this growing body of citizens, employers and productive entrepreneurs.
Understanding, supporting and embracing Bitcoin is even increasingly being recognized as important for America’s leadership role in the world.
There are a lot of things you’ll notice start to change as America’s case of Bitcoin progresses.
Here are some symptoms to look out for that we can expect to see growing in America’s people and institutions:
Inclusivity for All
Curiosity, question asking and answer seeking
Work ethic and pride in work
Motivation and purpose
Generosity and kindness
Friendship and goodwill to others
Longer term focus
Let’s look very quickly at one example of each.
One unfortunate condition of present-day America is the rate at which it incarcerates people. In 2008, before, the launch of Bitcoin, America’s incarceration rate was the highest in the world — roughly seven times that of European countries or neighboring Canada. This situation has improved but America still remains the most highly incarcerated nation on Earth. Incarceration eventually ends for the overwhelming majority of those who have to serve time, but the stigma and hangover effects can last a lifetime. It is hard to get a loan, a credit card and even just a basic bank account if you have a criminal record or have been imprisoned. This makes it hard to get a job, to get paid and to become re-integrated into society.
United States is the World’s Leading Jailer Prisoners per 100,000 Population in 2008
Source: Roy Walmsley, World Prison Population List, 2009 (8th Ed.), United Kingdom Home Office Research
But everyone can use Bitcoin.
In fact, Bitcoin allows everyone, including ex-convicts, to access all the services it offers—services which are akin to what the banking and finance sector offer.
Justin Rhedick wrote and recently released “From Bars To Bitcoin”, a book that tells his story of an incarcerated individual released into society who found Bitcoin, and over five years, made himself a productive individual who now assists others released from prison to learn to use it to save money and become productive law-abiding members of society.
Bitcoin’s permissionlessness and censorship resistance means anyone can use it. Bitcoin welcomes all, not just ex-convicts, but new immigrants, anyone of any race, with any disability, of any income level, of all political stripes. The excerpt of the poem “The New Colossus” which is inscribed on the Statue of Liberty is highly appropriate to Bitcoin.
If you want to further understand the general case for inclusivity in Bitcoin, there is a three-minute- long article in Why Bitcoin, The Series, called “Why Bitcoin is the World’s Most Inclusive Institution"
Bitcoin is a radical departure from many long-held beliefs that were taken for granted but which are now being questioned.
The view that government should have total control over the supply and price of money (interest rates being the price of money) has hardly been questioned in American politics or its academic institutions. Many Americans didn’t even think about this issue, and few were even aware that throughout most of history governments did not control money at all, let alone monopolize its issuance.
But Bitcoin is raising awareness that there may be alternatives to our current system, just at the time when that system is demonstrating many weaknesses.
Bitcoin is fanning the spirit of Americans to ask questions and to find sound solutions to problems they see. It starts with questions like “What is money?” and “Can Bitcoin be money?” but quickly spreads to “How do economies actually work?”, “How does Bitcoin work?”, “How can I protect myself from the flaws in our current system?”, “How do I preserve and enhance my Freedoms?”, “How does Bitcoin help with this?”.
And it goes on.
Bitcoin encourages the study and integration of knowledge from many fields. That’s what we need most. Americans know deep down and from their history that it is only by research, experimentation, innovation and rational methods that progress is made.
America is the nation of individuals. Its constitution was the first ever to acknowledge the rights of every individual in its historic Bill of Rights. Bitcoin is in many ways a new method for Americans to preserve, protect, and enhance some rights enshrined therein.
Bitcoin is a form of speech—it is just strings of text sent back and forth among its participants. So it is legally protected by the first amendment. But its uncensorability also ensures that it is a form of speech that cannot be stopped.
Bitcoin uses the most powerful technology known to secure it, making it unseizable—and thus creating something perfectly aligned with part of the fourth amendment, freedom from unreasonable seizure of property.
Most importantly though, Bitcoin is something that individuals must choose and must learn how to use. It is not mandated. Choosing Bitcoin is an individual choice. That choice may be arrived at in many ways and for many reasons, but it is an act of individualism to choose Bitcoin, and as we saw from our tests above, more and more individuals are choosing it all the time.
It is unfortunate, but honest nevertheless, to have to note that we are suffering from a lack of honesty.
Our politicians’ promises are unreliable.
We have lost confidence in big businesses because we don’t believe them to be honest.
Trust in congress has fallen from 42% of Americans saying they have a “great deal of” or “quite a lot of” trust in congress in 1973 (when the study cited began) to only 12% today.
One third of Americans trusted big business in 1975. Today that’s only 18%, down by nearly half.
Trust of Public schools fell from 58% to 32%
Televised news fell from 46% to 16%—down nearly two-thirds!
The medical system dropped from 80% to 44%!
And finally, trust in banks declined from 60% to 33%.
Bitcoin on the other hand, is a truth machine. Every single transaction and block in the blockchain is mathematically verifiable to be true. Bitcoin cannot tell a lie. Every participant verifies every statement within it.
Bearing witness to an institution of such honesty and integrity is inspiring to so many who have lost trust in the above institutions over the last fifty years.
Bitcoin sets an example of honesty that may well spread back out to the institutions who have lost so much trust through having failed to maintain their honesty.
Perhaps another reason that trust in institutions is down is because people haven’t been taking as much pride in their work or working with the same ‘ethic’ as they used to. The global economy, which uses the US dollar as its reserve currency, has encouraged outsourcing of American work overseas, often to the lowest bidder or lowest cost provider.
Quality has been sacrificed for quantity and price.
Bitcoin can help in two ways here, one practical and one philosophical or spiritual.
Practically speaking if Bitcoin were to replace the US dollar as the world reserve currency it would eliminate the disadvantage American manufacturing and American labor suffer from the Triffin Dilemma. This dilemma identifies the fact that other countries require US dollars and trade their hard work for our paper, leaving our workers at a significant disadvantage.
Philosophically, Bitcoin is money that can only be produced with hard work. It cannot be conjured from thin air or made ‘cheaply’. It is money that inspires doing good, honest, excellent, reliable work, because that is the type of work needed to create and maintain Bitcoin.
With money that can’t be conjured up for political advantage, a lot of the shenanigans that have led to the erosion of trust in our institutions and society simply become impossible. There is no way to print Bitcoin to buy votes, or to bail out bankrupt entities who have failed and need to be replaced by ones that won’t repeat the mistakes that led to failure. Without the expectation of being bailed out for mistakes, motivation to not make such mistakes increases from none-at-all, to being essential.
It is no surprise that the website “hope.com”, owned by Microstrategy, the company founded and led by Michael Saylor. His quote at the top of the site reads “Bitcoin is a bank in cyberspace, run by incorruptible software, offering a global, affordable, simple, & secure savings account to billions of people that don’t have the option or desire to run their own hedge fund.”
Indeed, it is not hard to find plenty of testimonials online of individuals who have found their way out of hopelessness and into hope thanks to Bitcoin—not only those who achieved wealth through its appreciation in value, but those who found purpose. And it is easy to find even more who have hope that honesty, trust, motivation, work ethic and more of the virtues described above are, in fact, on the upswing thanks to Bitcoin.
With money that cannot be debased, inflated, confiscated or destroyed, the possibility of longer term focus becomes increasingly realistic. One can rely on their money’s purchasing power long into the future. While inflationary government currencies instead guarantee that they will be worth less into the future, and government policies to stimulate the economy encourage short term consumption at the expense of the long term, Bitcoin can always be expected to increase in purchasing power.
In Bitcoin circles this is tendency towards the long term is referred to as “Low Time Preference” and corresponds to an ongoing study famously known as “The Marshmallow Test” begun in 1972 by Stanford University professor Walter Mischel. This test offered children a marshmallow but told them if they didn’t eat it and waited fifteen minutes, they would receive two marshmallows. The study followed these children throughout their lives and found that those who delayed gratification and waited for the second marshmallow actually fared far better in life.
Bitcoin is the ultimate marshmallow test. The longer you wait to spend your Bitcoin, the better you’re likely to do.
There’s plenty more positive effects Bitcoin is having on us. These include increasing self-confidence, generosity, kindness, friendship and goodwill. These topics can all be explored personally or through other readings.
Broadly speaking, we can classify the chronic condition of Bitcoin as having five stages:
There are a few people, mostly computer and math enthusiasts or those in the fields of libertarian economists talking about Bitcoin. A few companies experimenting in it.
Significant savings start to move to Bitcoin. Some people begin moving large portions of their wealth into Bitcoin to protect their savings. Bitcoin is recognized as unstoppable by many.
Skepticism of the fiat monetary system increases—people start calling it “fiat” and bureaucrats ask that those people stop doing that. Lightning network begins growing at double digit percentages each month. Legislators begin attempting to regulate activities around Bitcoin. Tremendous value captured.
Bitcoin based financial products and services explode in number and value. Bitcoin expands beyond a savings vehicle to medium of exchange and unit of account for many. Holders of Bitcoin outnumber non-holders. Politicians begin accepting the reality of Bitcoin and turn to laws that accommodate it rather than restrict it.
Bitcoin is used nearly everywhere. It is the primary savings vehicle. People recognize the “right to bitcoin” is a right to be free from interference in using Bitcoin and it is honored and cherished the world over.
If you’re in agreement that Bitcoin is here to stay, is growing, and is good, what should you do?
Learn how to hold it and use it. There’s no big hurry to scramble to do this. Take your time. The Swan team loves to educate about Bitcoin and so does much of the Bitcoin community. Your concierge can guide you to great resources on any questions you might have.
Get enough Bitcoin for your family, for the long term. Consider its advantages over the things that might go away or lose value as Bitcoin spreads: low and negative yielding bonds, fiat currency sitting in savings accounts, and stocks of companies that rely on repeated bailouts and access to cheap credit for their valuations.
Learn and prepare for the principles of a Bitcoinized nation: Smaller government, less bureaucracy, more freedom, more personal responsibility, and a general view to live and let live.
The sequel to the groundbreaking film “2001: A Space Odyssey”, was called “2010: The Year We Make Contact”. The most famous line of dialog from that film was “Something is going to happen. Something wonderful.”
It was just about then, only one year earlier, in 2009, that Bitcoin “happened”. Bitcoin may indeed be a “something wonderful”. And it couldn’t come at a better time for our country, our planet, and ourselves.
If you’d like $10 in free Bitcoin just for signing up and starting a DCA plan with Swan Bitcoin click here!
This blog offers thoughts and opinions on Bitcoin from the Swan Bitcoin team and friends.
Tomer Strolight is Editor-in-Chief at Swan Bitcoin. He completed bachelors and masters degrees at Toronto’s Schulich School of Business. Tomer spent 25 years operating businesses in digital media and private equity before turning his attention full time to Bitcoin. Tomer wrote the book “Why Bitcoin?” a collection of 27 short articles each explaining a different facet of this revolutionary new monetary system. Tomer also wrote and narrated the short film “Bitcoin Is Generational Wealth”. He has appeared on many Bitcoin podcasts including What Bitcoin Did, The Stephan Livera Podcast, Bitcoin Rapid Fire, Twice Bitten, the Bitcoin Matrix and many more.
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Thoughts on Bitcoin from the Swan team and friends.