Fix the Money, Fix the World
Unless you've been living in the remote wilderness of the Australian outback, or coinhabiting with an indigenous tribe on the grasslands of the Serengeti, then you’ve probably heard about this new “magical internet money” called Bitcoin. So what is Bitcoin? Well, some people think it's just a vehicle for financial speculation, while others believe it’s a sinister Ponzi scheme, hellbent on reeking havoc across the environment. But for me and many others, Bitcoin is emerging as one of the greatest technological advancements in human history; a revolutionary protocol which is not only going to devour the existing global monetary system, but also embed itself into the very foundations of the entire internet. Whether people know it or not, Bitcoin is on a collision course with the status quo; a collision so powerful, that it's going to alter the very course of human civilization forever. Now before you throw me a tinfoil hat, hear me out.
Firstly a disclaimer, this is not financial advice, and I am by no-means an expert; there are plenty of extremely intelligent and exceptional individuals within the community, who have a far greater knowledge and understanding than myself. I would much rather be spending my time writing spec scripts and educating myself on the art of screenwriting, but I’m often inundated with questions from family, friends, colleagues and acquaintance. These questions are nearly always in relation to NgU (number go up), but price is the least interesting aspect of Bitcoin, therefore, I feel it's my duty to share my little knowledge, understanding and opinion, with those who come seeking answers.
Central Bank digital currencies
Bitcoin is a decentralized global software network which was created by a pseudonymous individual named Satoshi Nakamoto in 2009. Nakamoto solved the double-spend problem - in layman’s terms - he figured-out how to send a piece of information across the internet, without that piece of information being able to be duplicated. Doesn’t sound that revolutionary right? but this allows for some exciting uses that just aren't possible with conventional payment systems.
Bitcoin also has some very unique properties. It has no central authority, is open-source, censorship resistant, seizure resistant, borderless, permissionless, pseudonymous and programable. It cannot be regulated, captured, or rendered compliant. Bitcoin is honest, reliable, inclusive and non-discriminately; it is open to each and every person who has access to a smartphone (currently estimated to be around 50% of the worlds population, which is predicted to grow to 70% by the end of 2022). Bitcoin transactions don’t go through banks or intermediacies, but travel directly from one person to another. The Bitcoin ledger is public and can be fully audited by any individual running cheap hardware such as a Raspberry Pi. Bitcoin has rules, not rulers.
And finally, Bitcoin is extremely scarce. The number of Bitcoin in existence can never exceed 21 million units - although, a single Bitcoin can in-fact be divided into 100 million bits (known as Satoshis or Sats). This makes Bitcoin one of the hardest currencies the world has ever seen.
BITCOIN AND HUMAN RIGHTS
Bitcoin is quickly becoming the ultimate freedom fighter; an emerging technology that protects human rights and offers economic freedom to the financially repressed around the world, so it comes as no surprise that Bitcoin adoption is hitting the developing world the fastest. A recent study by the Human Rights Foundation found that 53% of the worlds population (4.2 billion people) live under authoritarian regimes. Those regimes often use money as a tool for surveillance, control and censorship.
Activist, dissidents, journalists and creative minds who speak-out against the misuse of power, can often find themselves eliminated from the financial system through asset seizures and frozen bank accounts. For them, saving and transacting outside of government ecosystem isn’t a dodgy business, it’s a way to preserve their freedoms, and a way to escape sanctions, restrictions and embargoes that are placed on them by corrupt rulers and unscrupulous politicians. Bitcoin offers them a lifeline to earn an income, receive donations and provides them with a way to preserve their money in cyberspace - locked away with mathematics, computer science and encryption - which can be stored on a flash-drive, mobile phone, piece of paper, stainless steel, or even in the confides of your memory.. Bitcoin is a technology in which war-torn, fleeing refugees throughout history, could only have dreamt of.
For a deeper look at how Bitcoin is becoming an important tool for human rights, check out the writings of Alex Gladstein.
BITCOIN AND CIMATE CHANGE
Anyone who has recently visited any mainstream media platform, has probably seen at least one fear-mongering headline regarding the energy usage of the Bitcoin network; “it’s boiling the oceans” they shout from within the luxury of their private jets. But the truth is, the majority of those click-bait articles are written by politicians and journalists who not only reside in countries of financial privilege, but also have little understanding on the nature of the subject.
A recent study from The Cambridge University Centre for Alternative Finance, estimates that 39% of Bitcoin’s energy outlay derives from renewables, with 76% of miners using renewables in some capacity. They claim that the total carbon emissions (MtCO2e) from Bitcoin mining is around 41.1 million tons (0.09% of global emissions). In comparison, Gold mining, the Finance and Insurance sector, and the Military Industrial Complex is estimated to emit 144 million tons, 1368 million tons, and 2500 million tons respectively. The global financial system cannot exist without the petrodollar, which cannot exist without the backing of the United States government, and by extension, The United States Armed Forces, and by further extension, the rest of the world’s governments and armies. Therefore, if we wish to compare Bitcoin’s emissions to the “legacy financial system,” the military must be accounted for, as well as its primary supporting industries.
In the grand scheme of things, Bitcoin emits nothing compared its legacy counterparts, and as mentioned previously, Bitcoin is programable which allows new technology, Apps, Dapps, and Lapps to be constructed on top of the protocol. One such technology, the Lightning network (more on this later) is capable of of processing billions of transactions per second, and is over 1 million times more energy efficient than Visa.
Bitcoin mining is also a competitive business - miners thrive on margins, and as a consequence, miners are forced to seek out the cheapest form of electricity, which usually comes in the form of renewable and stranded energy - whether that’s geo-thermo from volcanoes in Iceland, hydro-electric power from dams in Sichuan, or stranded natural gas
Bitcoin mining is incentivizing the creation of renewable energy infrastructure, without the need for government intervention and incentives such as ESG and carbon tax credits. For example, digital payment firm Square, have partnered with Blockstream to deliver a 100% solar-powered Bitcoin mine in the United States; the nation state of El Salvador (who recent made Bitcoin legal tender) are constructing a 100% geo-thermal Bitcoin mine on top of a native volcano, and
The truth is, the existing inflationary monetary system is incompatible with fixing climate change; the climate cannot be solved from within a system that continually requires perpetual growth on a finite planet.
The morality of energy consumption ultimately comes down to a matter of opinion. One could hold the opinion that Christmas lights are a complete waste of energy, whereas others (myself included) could argue that Christmas lights bring joy and happiness to millions of people around the world; a symbol of tradition, hope, peace, giving and sharing; a jubilant celebration during the season of festivities and goodwill. Then there is social media platforms such as Facebook and and its energy-hungry data servers. One could argue that it's a complete waste of energy; that Facebook is a stain on humanity; an unethical and sinister organization that not only will rip the privacy from your soul in the name of profits, but also censor opinions of individuals that do not suit their underlying agenda. Others may argue that washing machines and dishwashers are toxic to the environment, and that we should all go back to using our bare hands. or that we should ban the use of "happy-meal" toys, that are being mass produced only to end-up in landfill after about 10 minutes of use. Hell, while we're at it, lets just do-away with the internal combustion engine and bring back the horse and cart. In my opinion, dictating how people use energy is totalitarian, we should let the free market decide. Bitcoin may be useless to you, but the fact is, it's providing economic freedom to millions of people around the world - the majority of those being financially repressed.
For a deeper look into the energy usage of Bitcoin, check-out the work and writings of Nic Carter.
BITCOIN AND INEQUALITY
Profound unfairness of central bank activity. exubaration, explosion of wealth inequality. We havnt even seen anything. As an induvial, if you didn't own assets, you were crushed. inequality is expanding at an alarming rate; people are struggling to make ends-meat, food bank usage is soaring, the young are unable to get on the property ladder and hyper-inflation is gripping developing countries This is a direct consequence of quantitative easing / fiscal stimulus / covid recovery package - it doesn’t matter what you call it, at the it’s money printing. This is not a direct consequence of government policies, but ultimately, the blame lies within the existing financial system; a system which is past the point-of-no-return; stuck in a negative feed-back loop that requires more and more printing for governments to pretend the system is still working. If the free market was left to take its course, the system unwinds to the ground and fails spectacularly.
Currency devastation has dramatic consequences on society. It’s a tax without legislation, it robs employees of their time and labour, and it absolutely crushes the most vulnerable in society (those with no assets). It’s no coincidence that the rich got richer and the poor got poorer over the period of the last 18 months as governments printed unprecedented amounts of money to deal with coronavirus pandemic - which in turn, pulled back the curtain for the world to see. So many people are fighting about climate, wealth inequality, racism, populism, crime, without a clue as to what is causing I.e. a system that requires inflation. Until that is fixed - all symptoms will worsen.
Technology is deflationary, photos, DVDs, etc technology is a driving force to bring down prices.
If you allow deflation to happen, the whole system unwinds to the ground,. There are no free markets inflation is a hidden tax on the most vulnerable parts of society, the people who have no assets
The system will fail spectacularly without inflation, every single bank collapses, every song institution collapses , chaos on the streets, global collapse, stuck in a corner
Everything around us should be getting cheaper and cheaper technology is not moving slower, it’s moving faster at an exponential rate
It will put the electorate in a spot that will overthrow the government
Why do we pay taxes
sets the world on a path of abundance and individual rights and freedoms by stopping corruption of money, and centralized control.
CENTRAL BANK DIGITAL CURRENCIES (CBDC's)
Central Bank Digital Currencies do not pose a threat to Bitcoin, but they do pose a threat to human freedom. Authoritarianism, de-platforming and censorship are growing trends within democratic nations, and as we hurtle towards a digital world, cash (one of the last bastions of privacy and freedom) is disappearing at an unprecedented rate. Nations around the world are now scrambling to implement their own native digital currencies. At first glance it may appear that our current currencies are digital, but they are in-fact non-digital currencies. A truly digital currency is a programable protocol; it has a certain set of rules; it is interoperable with the internet, and is underpinned with mathematics and computer science. But unlike bitcoin (power is decentralized across the world by individuals), CBDC's are centralized in the hands of few wealthy and powerful people who have total authority to alter and change those rules on a whim.
Central Bank Digital Currencies in partnership with digital identities, rolled-up into a mobile app, grant states dystopian levels of power and control over their citizens. It provides them with the authority to not only to micro-track every single transaction, ability to confiscate, to discriminate at will to particular minorities, or people with certain political belief, or even the anility to force spend, with money with expiration dates. but to censor transactions as they see fit; they would have the power to set limits on the likes of red meat, alcohol, sugar, takeaways or any other consumer item which they deem *unsuitable^, and will be able to coerce the population to suit there own agenda.
Now you may think that I'm being overly dramatic here, but you only have to head over to the World Economic Forum webpage, where you will see articles on topics such as prohibiting alcohol consumption for any woman of child bearing age, or removing all privacy and property rights by 2030, and my personal favorite, replacing the consumption of red meat fin favor for insects. It may not be plausible, but the fact remains that it would be possible and power corrupts, and absolute power corrupts absolutely.
The digital currency resolution could go go in two directions, either a triumph of decentralization, privacy and free market forces, or a triumph for centralized currencies which inevitably lead down a dark path to authoritarianism and dictatorship.
BITCOIN, THE UNBANKED, AID AND REMITTANCES
Foreign Aid so much of foreign aid is lost in the middle, at times almost 80% doesn't make it to the people who need it due to all the middlemen How much is wasted through beurocrocies and intermediacies. Direct peer to peer who can buy food and feed people instantly. incumbencies.
The use of bitcoin is coming up from the bottom. For the first time in history the world now has an open source monetary network. Bitcoin can achieve cash final settlement anywhere in the world, any time, any day, 24/7 365, with liquidity in any currency pair,
in El Salvadore, Jack Mallers firm strike
70% of the population in El Salvador do not have access to a bank account.
24% of the GDP in El Salvador is remittances. Before strike, the the way that transaction worked, is that it go to western union, there are not that many western unions in El Salvador, - some people have to drive 3-5 hours on a bus to western union to collect the money and be weary of gangs. with the lightning network, an individual can buy bitcoin, with strike, zip it across the lightning network to the family member in El Salvador, instantly for free = saving up to 50% in fees and a long unesecery journey
Deep entrenchment of the traditional financial rails. Roots get deeper and deeper. You cant turn the thing off now. Bitcoin is continuing evolving. Dictators don't really understand it, at least not yet. The activists have an opportunity of a lifetime, an opportunity for the oppressed to turn the tide against the oppressor's. Dictators accumulating bitcoin, what they don't realise is that is eating and eroding their power from the inside. A world that is so compromised when it coms to morals - for example, business' who do business with countries who have a total disregard for human rights nobody can separate their business from these human rights violators. One time deal, came up with a way to separate money and state and they knocked it out of the park. It was a one and only shot and it is not repeatable. When it sinks in and people realise that there is a money that government doesn't control, if your into seizing peoples property, volant redistributionism, people are going to be able to control their own wealth in a peaceful way that is really difficult to confiscate. Healthy check on governments.
#A #Bitcoin full node is a program you run that fully validates all transactions and blocks in the network. It can be downloaded and synced with the entire network using an average computer or laptop, from anywhere in the world. That's what makes #Bitcoin decentralized. From Satoshi Nakamoto's first transaction in 2009, to the one you send yourself today, when you download a full node, you're able to validate each transaction to ever happen. You do not rely on any third-party to tell you what's true, you validate it ALL yourself. The file size of the #Bitcoin blockchain is about 392.1 GB right now. Your laptop has much more space than that. But if Bitcoin had larger blocks, it would grow exponential in size. The average person would never get to take part. The entire point of #Bitcoin would be lost. Only "server farms", warehouses filled with top-of-the-line computers, typically companies and governments, would ever get to download the blockchain. They would be the only ones with enough money and resources to buy the hardware needed to sync such a large amount of data.
Let's start with what is a full node? In simple terms, it's not very different from a database, mapping bitcoins to their owners. Every #Bitcoin transaction updates the current state of the database, deleting the old owners and assigning the new ones. To stay up to date with the latest changes, the node communicates in a "peer to peer network" with other nodes and asks them for new transactions and blocks. When a new block arrives, the node will validate that it complies with a certain set of rules (the "consensus rules") and if this validation process pass, the node will update its database with the changes in ownership caused by the new transactions in the block. These "consensus rules" can be of a wide range, from the limit of the size of the block, to the check that no transaction (excluding the initial subsidy awarded to miners) can spend bitcoin which do not come from a current owner in the database. / This database of the current state is called the "UTXO set". Every node in the network must maintain a full copy of this set to be able to verify new blocks and transactions, since without this, it won’t know who are the current owners of each bitcoin. The blocks themselves, however, can be discarded after used for updating the UTXO set (in rare cases they might be needed, but we will ignore this here for simplicity), this is what differentiates archival nodes - which keep old blocks, from pruned nodes - which discard them. Now that we have some idea what a full node is - a copy of the current "list of owners" of all bitcoins - we can continue to the bigger question, why should I run a full node?
THE LIGHTNING NETWORK
Bitcoin's philosophy from a design perspective is to be careful and conservative, its really only gonna change if there's a really fricking good reason. Move fast and break things. Be born onto a second layer. Global, instant final settlement.
Just like with how the fiat system is layered, the base layer cheque or credit card is a second layer solution, Bitcoin asset is the base layer, the lighting network is a second layer solution, so you can turn fiat into bitcoin, move the bitcoin to the lightning network, zip that anywhere in the world at light speed, they are received, that can be converted back to fiat. Fiat has been moved over bitcoin rails, without merchant fees, exchange fees - instantly and for free.
CURRENCY DEBASEMENT & INFLATION
Fiat currencies have lost 99% of their value.
1.2 billion live in double or triple digit inflation in around 35 countries. Venezuela - largest refugee crisis in the world - richest country in south America. Flee your country with what was on your back, but today, with bitcoin you can take your wealth with you.
disproportion on a rich persons portfolio and a poor persons portfolio. A poor person, likely that the proportion of their net worth is 90, 95, 100% cash, in contrast, a rich persons portfolio is probably 5, 10 percent cash. Cash is radically decreasing in value. Cash is no longer an asset, cash is a liability. And the more the FED prints, the more the none cash portion increases in value, and the cash portion decreases in value - which hits the poorest the hardest. The most vulnerable people need bitcoin the most. When you are poor and and all you have is fiat, a melting ice cube of value, you lose dignity every single day the FED prints money. The good news is that bitcoin is a monetary system governed by rules, not rulers and people get tp choose if to stay on the fiat standard, a system which a very small group of people get to produce new units of money - just not you , or opt in to a bitcoin standard where nobody gets to do that. which is more fair?
Venezuela, turkey, Iran, Pakistan or Zimbabwe. every single day more and more people are storing their lifeforce, their days labour in bitcoin. store of value, unit of account, medium of exchange. It is a choice between surviving and not surviving - in dark places in the world where risk is off and survival is on = those people are choosing bitcoin.
WHAT IS MONEY
first and foremost, money is technology. for taking our wealth today and doing our best to make that wealth available tomorrow. You store your labour in money, we sacrifice our time for money. money is human time.
So when the FED prints 3 trillion of money in the matter of weeks by pressing a button, iy steals people money, and by extension, your labour and by further extension your time. Bitcoin is our peaceful weapon of choice against central bank driven time theft.
fiat is the thing that is subject to the whims of human frailties, human decision making.