We’ve all heard the incredible potential of a Bitcoin future. I’m certainly on board for sound money and social scalability.
However, this drama will take decades. What if Bitcoin doesn’t survive long enough to realize it’s full potential?
Thankfully Satoshi learned from failed attempts at private money. Bitcoin’s genetic code was engineered for maximum survivability.
In this article, we’re going to explore the fertile macro environment and Bitcoin’s survivability through the lens of fungi.
Here’s the whole series for reference:
- Part 1: Bitcoin is a Decentralized Organism (Mycelium)
- Part 2: Bitcoin is a Social Creature (Mushroom)
- Part 3: Bitcoin is the Antivirus to Uncertainty (Medicine) → this one
- Part 4: Bitcoin is a Catalyst for Human Evolution (Space Money) — coming soon!
Let’s dive in!
Honey Bees, Varroa Mites, and Mushroom Medicines
In 1997 a curious Mycologist by the name of Paul Stamets observed a unique behavior demonstrated by honey bees. The bees went out of their way to consume water containing mushroom spores. “Hmm that’s interesting” thought Paul.
15 years later, Paul started to connect the dots. Honey bees were dying at an unprecedented rate due to colony collapse disorder (CCD). The bees were dying in part, by infestations of Varroa Mites which transmit deadly viruses such as Deformed Wing Virus and Lake Sinai Virus.
Chemicals used in modern agriculture poisoned the bees so their immune systems are too weak to fend off the Varroa Mites. As bees travel around they spread the Mites to all nearby bees leading to a 70% decline in Bee populations since 2005.
Who cares about the bees?
Bees are a bedrock species responsible for pollinating a large percentage of our food sources (avocados, almonds, etc). If we lose the bees, there are countless downstream effects such as lost jobs, destroyed ecosystems, and reduced food security.
Back to our mycologist Paul, who in 2012 made a monumental realization: fungi are known to support immune systems — the bees must have instinctively known to drink the fungal water. Paul tested his hypothesis and soon after demonstrated that using a simple antivirus “mushroom medicine,” we can reduce the effects of Deformed Wing Virus / Colony Collapse by 80%.
Our current monetary regime is the Varroa Mite
Our current central banking based monetary regime is just like the pesky Varroa Mites attacking our financial markets.
- Varroa Mites are hard to kill — fiat currency regimes benefit from a monopoly on violence
- They spread viruses on everything they touch — market distortions, cronyism, regulatory capture
- Negative downstream effects — capital misallocation, increased time preference, limits human productivity, increases risk of catastrophe.
Bitcoin is the antivirus (mushroom medicine) that “saves the bees.”
Bitcoin (mushroom medicine) prevents the spread of our destructive financial hegemony (Varroa Mites) which will usher in a new era of human achievement (saving the bees has secondary effects such as ensuring food security).
Heading into the Great Unknown
We’re heading into a period of uncertainty never before witnessed by our civilization. The fiat money experiment is on shaky ground and our social systems are beginning to break down.
Globally, we’re facing unprecedented debt-to-GDP levels. The Fed, European Central Bank, Bank of Japan, and the Bank of England now appear to “own a fifth of their governments’ total debt.” Central banks are running out of moves.
In a last ditch effort, European Central Banks are pushing negative interest rates. Are we really going to allow the hegemonic banking system to CHARGE depositors for storing our digital fiat in their insecure panopticon banks?
How about China?
China’s real estate market is shaky and long overdue for a correction. Capital controls and seeking yields in a cooling economy have led to inflated real estate prices in China. What happens when the market corrects and everyone rushes for the door? Better have a plan ₿.
And the US?
The US is currently over $22 Trillion in debt, however don’t expect the US to default on their obligations. Former Fed chairman Alan Greenspan said “the United States can pay any debt because we can always print money to do that.”
In an enlightening article titled This is Water, Ben Hunt explains how artificially suppressed interest rates (easy money) lead to decreased productivity and a zombification of our financial markets. This same pattern foreshadowed the 08/09 financial collapse.
Social structures are showing weakness
Countries around the world are seeking to eliminate physical cash. Cash is a fundamental tool for privacy and is a requirement to maintain an open society. Without physical cash (or Bitcoin), citizens are at the mercy of the financial surveillance machine. A slippery slope indeed.
Can’t forget China’s Social Credit System. Soon China’s surveillance technology will be exported all around the world.
Young people don’t trust their governments or financial institutions. 40% of Americans cannot afford an unexpected $400 expense. No wonder potential Democratic nominee Andrew Yang is gaining steam in the polls while campaigning for Universal Basic Income.
An uncertain future is a perfect substrate to breed extremism. Democratic Socialism, Modern Monetary Theory (MMT), Negative Interest Rates Policy (NIRP), the war on cash, widespread consumerism, and mounting student debt are merely symptoms of a derelict regime.
Our legacy institutions are simply not equipped to deal with the complexity of the information age.
Current attempts to fix the political-economical machine from the inside are unironically powered by the “waste heat of war machine” (h/t Vinay Gupta). We need a systemic change. Something cut from a different cloth.
What if a sound money regime (Bitcoin) is an antidote to the madness?
It is my hope that in the future, we’ll look back on our current “fiat banking experiment” with disgust. How could we live under such an archaic regime for so long?
Just like fungi transforms dead and dying organic matter into new life, Bitcoin will transform our decrepit banking system into a robust financial foundation upon which new growth can occur.
The Great Filter of Cryptocurrencies
Can bitcoin survive long enough to reach its full potential?
Cypherpunks, Anarchists, and Voluntarists have been trying to create private, non-government money for a very long time. In fact, modern attempts date back more than 30 years, since the early days of Chaumian Ecash, to E-gold, and B-Money.
Despite moderate success of private money before Bitcoin, eventually they were all shut down by overreaching governments and/or business interests.
The Great Filter Theory
The Great Filter theory was developed after noticing our lack of success finding intelligent life in the universe. Where is everybody?
The theory predicts: during life’s evolutionary process, there are some obstacles that are extremely unlikely or impossible for to overcome. That obstacle is “The Great Filter.”
For example, what if every time an advanced civilization created nuclear bombs it ended up destroying itself? In this scenario, it might be statistically improbable to survive long after inventing nuclear weapons.
For Cryptocurrencies, The Great Filter is surviving nation-state level attacks.
Bitcoin is the only monetary species that has a chance of surviving the great filter. More on this below.
Why would a nation-state or entrenched business want to attack a competitive form of money?
In short: he who has the gold, makes the rules.
The two main benefits of controlling the money supply are the ability to inflate the money supply (shadow tax) and the Cantillon effect .
The Cantillon effect describes the uneven expansion of the money supply. When the central bank prints new money, those closest to the money (banks and big corporations) profit from new “cheap money.” By the time the rest of the population receive the new money, price inflation has already begun.
The Cantillon effect results in a wealth redistribution from the poor to the rich.
The government goes to great lengths to protect their monopoly
Like E-gold in the 1990s, any competing cryptocurrency can thrive in times of peace. However, when sufficiently agitated, those in power will lash out to protect their interests. History is littered with examples.
Between 2006–2008, the US government expanded the definition of the ‘money transmitter license’ (under the Patriot Act) to target E-gold. In its peak, E-gold was processing over $2B worth of purchases per year. Unfortunately, the US government took advantage of the centralized nature of E-gold, busted down the door, and shut it down.
Moral of the story? Governments do not like competition.
In fact, Congressman Sherman from California recently called for a complete ban of Bitcoin. Sherman is surprisingly enlightened. He understands Bitcoin’s true mission: Creating a new global base money that cannot be weaponized by the global superpower du jour.
Time For a New Strategy: Be Unstoppable
In 1984, famous Austrian Economist, Friedrich August von Hayek, unknowingly laid the foundation of Bitcoin’s evolutionary strategy: be unstoppable.
“I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.” — Friedrich Hayek
With chilling foresight, Hayek predicted Bitcoin some 25 years prior.
Satoshi obviously read Hayek and he understood “The Great Filter of Cryptocurrencies”
In 2009 Satoshi Nakamoto released an implementation of Hayek’s “unstoppable money.” From day one, Bitcoin was engineered to survive “The Great Filter.”
“A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990’s. I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we’re trying a decentralized, non-trust-based system.” — Satoshi Nakamoto
In order for the full potential of Bitcoin to be realized, it needs to be so resilient that even nation state level actors cannot successfully kill Bitcoin. This meant preventing any party from having full control over the system.
Parallels with Fungi: the most resilient species on our planet
Over 1.3b years of evolution, fungi have perfected the art of staying alive. Unlike plants, fungi do not rely on sunlight, instead they find/create their own food. Fungi do not have a centralized point of failure making them resilient to attacks. When sufficiently perturbed, fungi steal genetic code from their ecological neighbors (Horizontal Gene Transfer).
Since complex life evolved on our planet, we’ve experienced 5 great extinction events where 75–96% of all life on earth perished.
During each cataclysmic event, fungi inherited the earth due to their anti-fragile nature. In an effort to survive “the great filter,” Bitcoin mimics effective evolutionary strategies observed in the fungi kingdom.
Can Bitcoin Survive “The Great Filter?”
How could you kill bitcoin? Turn off the internet? Make it illegal to use? Tax it to hell?
Any cryptocurrency that cannot (feasibly) survive a nation-state level attack is pointless. Simply delaying their inevitable demise.
Satoshi designed the Bitcoin super-organism to survive “The Great Filter” and to resist corruption. This lofty goal kick-started an evolutionary path separating bitcoin from all the other cryptocurrencies and “blockchain projects.”
Does this mean Bitcoin is guaranteed to survive the great filter?
Not necessarily. It’s impossible to know until the day it suffers a coordinated attack by a state-level actor. However, Bitcoin is the only existing cryptocurrency that stands a chance. Let’s explore some positive trends in Bitcoin’s survivability toolbox.
- Bitcoin is unregulatable. No one person or entity in charge. Code is free speech. Each country has their own competing jurisdiction.
- Game theory protects Bitcoin from a global coordinated attack. Nation states compete with each other. Unlikely to see top nations cooperate. If the US bans BTC, China has incentive to adopt. Nations not benefiting from the current USD regime have incentive to adopt BTC.
- Bitcoin’s PoW protects the ledger with an “energy shield.” By anchoring Bitcoin to real economic value (energy), the only way to change the ledger is to “re-do all the work” aka spend the same amount of money in the form of electricity. h/t @danheld
- Bitcoin inspires a religious fervor from its supporters. Ideologically motivated “hardliners” act as an immune system. Surviving the scaling wars (NYA/S2X) demonstrates this. Bitcoiners “provide cover fire” until Bitcoin gets through the door. (h/t Bitcoin Sign Guy)
- Bitcoin can route around ISP censorship. Bitcoin has a growing network of alternatives to the mainstream internet (mesh networks, HAM radios, and satellites). Maybe even routing transactions through a mycelial network(theoretically possible).
- Bitcoin is an idea, ideas are eternal. Bitcoin spreads like a mind virus. Even if somehow the current form was “killed,” the idea will live forever. “This Snow Crash thing — is it a virus, a drug, or a religion?” Juanita shrugs. ‘What’s the difference?’” h/t @nealstephenson
- Bitcoin’s privacy improvements reduce taxability. CoinJoins and other privacy technologies will minimize the ability for governments to attack Bitcoin through predatory tax legislation. Thank you @wasabiwallet @SamouraiWallet
- Bitcoin minimizes the ability to cheat. Bitcoin doesn’t rely on trust. Think “can’t be changed” instead of trusting that a system “won’t be changed.” Bitcoin recognizes leaders, formalized governance, and concentration of power as attack vectors waiting to be exploited.
- Nation states underestimate Bitcoin. This buys time for Bitcoin to get stronger + harder to kill. The hegemonic banking system is digging their own grave with shovel made of 100% pure hubris. If only we had a ₿ackup plan
So far, we haven’t seen any serious state level attack on Bitcoin. However, if Bitcoin continues to absorb value there is an incentive to attack it. In the future, we’ll call this period in Bitcoin’s life the “great peace.”
Alternative Game Theory: Honey Badger Lives Here
Bitcoin only needs to convince a few super powers that the reward of adopting it outweighs the risk of attacking it.
This game theory is similar to having a sign in front of your house that says “Security system installed” or “big angry dog lives here.” Doesn’t matter if you actually have a dog or security system, the threat alone acts like a deterrent to would-be attackers.
Bitcoin has a sign in the front yard that says “Beware of Honey Badger.” This sign reminds nation states that they cannot easily kill Bitcoin.
If nation-states attempt to destroy their monetary competition, they’ll highlight the very need for bitcoin in the first place. And yet, the longer they wait, the stronger Bitcoin becomes.
The “Blockchain Industry” is a Red Herring
First, it’s important to understand that blockchainers, stable coiners, security tokenizers, and corporate chainers do NOT compete with Bitcoin. They taxonomically branched off and are attempting to satisfy a separate niche.
By and large, the “blockchain industry” is a Red Herring, leading businesses and governments to false conclusions. It serves as a distraction and unwillingly provides cover fire for Bitcoin.
Does that mean we should shun the blockchainers? No. They simply mistake Blockchain Hype (Mushroom) for Bitcoin (Mycelial Network).
We should first attempt to educate them as most people were not born Bitcoiners. That being said, deliberate scammers deserve to be flamed.
How the “blockchain industry” helps Bitcoin…
Blockchainers tie up government resources, train future developers, confuse incumbent businesses, and lull banksters to sleep.
Banks like JP Morgan will train hundreds of blockchain developers. Eventually they’ll discover Bitcoin and say goodbye to boring bank coin & and instead join the peaceful revolution. JP Morgan is funding their own demise? How poetic.
Zuckerberg will soon put a “crypto wallet” in everyone’s pocket. Instead of competing with Bitcoin, ZuckBucks may actually attempt to compete with USD. Either way, it gets people comfortable with non-state money on their phone similar to WeChat and Alipay. The first widespread censorship of ZuckBucks will nicely demonstrate the need for BTC in the first place.
Blockchainers and scammers claim Bitcoin is old and can’t scale. It’s Beanie Babies and myspace. They paint Bitcoin has a friendly, but limited-use fungus, that “brought us the blockchain.”
While the blockchain zeitgeist chases their tail, Bitcoin is quietly growing underground, fusing with the “roots” of the legacy finance system, building resilience, recruiting volunteers, infecting curious minds like a cordyceps mushroom, and preparing for “The Great Filter.”
If we’re lucky, Blockchainers will distract global superpowers just long enough for Bitcoin to become “too big to fail.”
Let’s Wrap Up
Part 4 teaser: Let’s assume Bitcoin fulfills its destiny as the global monetary base. What are the effects of unleashing a globally accessible, technologically advanced, open, ideal money? Bitcoin enables humanity to reach the heavens. Bitcoin is space money. Bitcoin is the renaissance.
Thanks for reading,
PS: Lots of people have asked for resources to learn more about fungi.
- I suggest watching Paul Stamets on Joe Rogan’s podcast.
- If you only have 17 minutes, check out Paul Stamets TED Talk: 6 Ways Mushrooms can Save the World.
- Curious how the forest communicates? Radiolab’s Free Tree to Shining Tree
- Thanks to Nic Carter, Gigi, Robert Breedlove, and Danielle Diamond for reviewing earlier drafts.
- Thanks to the Bitcoiners who supports these wacky ideas.
- Thanks to everyone who tags me in fungi related content on Twitter (I really do love this)
- Thanks to Paul Stamets for inspiring my love for Mycology. The Bitcoin community welcomes you whenever you’re ready.