Bitcoin and a Renaissance Trifecta
Three Decentralizing Elements
Examining the 14th-century Renaissance and the coming decade with a trifecta lens reveals many startling parallels. In 2030, the United States may enter a new Renaissance, an era of resilience and enormous economic growth. The alignment of the earlier Renaissance and our contemporary trifecta is rare. Three decentralizing-elements.
- The florin was not devalued with seigniorage. It was an era of sound money. Transactions were person-to-person without an intermediary taking “their” cut.
- The Gutenberg printing press helped decentralize the pursuit of knowledge. It was more difficult for the church and state to control. The internet expands the printing press’s decentralizing effect.
- The third element was plague, a rare perturbation of population growth. Reduced population, sound money, and the printing press were all critical precursors for the 14th-century Renaissance. All these decentralizing elements have contemporary counterparts and may provide an economic Renaissance, a starting point, providing decentralizing resilience lasting centuries.
Following the Middle Ages, the Renaissance was a European economic “rebirth.” Generally described as taking place from the 14th century to the 17th century, the Renaissance was an age of flourishing rediscovery of classical philosophy, literature, and art. One important economic reflection of the 14th-century Renaissance is the notion of “sound money.”
SOUND MONEY: “The Florentine florin was a coin struck from 1252 to 1533 with no significant change in its design or metal content during that time.”[1] The florin is attributed to providing sound money across Europe without seigniorage — adding tin, copper or other metals. Seigniorage is theft. Money printing is theft. Since 1971, the US dollar is now a fiat currency. In Latin, fiat means “by decree.” Since 1971, USD is no longer backed by gold. Since 1971, USD is regularly devalued at an accelerating rate.
Similar to The Roman Empire altering both the denarius size and the denarius silver content, The Fed (US central bank) regularly prints more money at an accelerating rate. A proverbial money printer might be simplistic, but The Fed buying US Treasuries is the same effect. Money is created out of thin air.
[1] Ricordanze (Recollection) di (of) S. Maria di (of) Cafaggio, mentions florins being used in the year MCCL (1250)
Seigniorage and money printing have the same effect. Both are the main variable leading to inflation. The impact is delayed but invariably steals savings, wages, and fixed income. Both increasingly centralize the free market into a less efficient, less resilient economy.
Just like pre-Middle-Age seigniorage, the financial hierarchy benefits, while the middle-class suffer a disadvantage and the poor, having no hard assets, are hit the hardest. The same can be said about fiat money printing.
Since 1971, when the US dollar became a fiat currency, nominal wages increased while real wages remain mostly flat. Productivity gains — thanks to technology — are hijacked by the money printer and passed to the financial class who have access to the artificially-low interest rates. The money-printing method increasingly spirals our free-market economy into a centralized economy. Figure 2, https://wtfhappenedin1971.com
Simply put, money printing increasingly builds a centralized economy. The financial class use real estate, equities, and other hard assets to escape currency devaluation, while the middle-class is at a disadvantage, and the poor are increasingly excluded from the economy. As the debt spiral accelerates, both the middle class and poor are eviscerated. There are plenty examples of this happening: Weimar Republic, Venezuela, Lebanon, and others.
World debt is four times larger than GDP. The total debt/GDP is nearing the end of an inescapable debt. We have passed the event horizon and entering a black hole. Debt is now compounding faster than GDP growth. This is not complicated. It is simple math.
We have experienced the dot com bubble, the real estate bubble, and we will experience a sovereign debt bubble. Debt has been growing slowly since 1971 and is now accelerating. When sovereign debt does not roll at an auction, you will see the bond market devalue. Credit will suddenly tighten. Without cheap credit, stocks will fall.
Credit Default Swaps indicate Turkey will be the next fiat currency failure. Like a hydraulic effect, the conclusion of the long-term debt cycle will give rise to Bitcoin. Similar to what Soros did to the sterling pound, speculative attacks on fiat will increase. Smaller fiats around the world will pop like popcorn. Corporations and nation-states are already borrowing fiat and buying Bitcoin.
Slowly, then suddenly. The global economy runs on a credit-based system. Slowly, fiat money printing is eroding faith in the fiat currencies. Suddenly, the world will understand Bitcoin is the most perfect money every created. Bitcoin is a macro-consensus machine. Every day it grows more secure, more efficient, and more conscious.
Bitcoin is alive. Bitcoin nodes and Bitcoiners have a symbiosis, like a tree-mycelium meta-network. The roots of trees and mushroom mycelium interlink and provide inter-tree communication … signaling resources, defense, and kin recognition.
Fiat is also a macro-consensus, but The Fed and the magic money printer cannot compete with Bitcoin’s decentralized resilience, Bitcoin’s 21 million hard cap and Bitcoin’s growing consciousness. We are experiencing creative destruction, an evolutionary phase change. The Fed’s magic money printer is going hyperbolic. Eventually, we will come out on the other side. In 2030, expect the beginning of a long-term Renaissance Trifecta that builds a decentralized resilience … lasting centuries.
Central Bank money printing is good for the financial hierarchy — bad for everyone else. Just like florin, Bitcoin (BTC) promises an escape, a new era of sound money. Disregarding price, we can measure Bitcoin’s growth. Bitcoin’s user base is doubling every 1–2 years, or a growth rate of 50–100% per year. This is similar to Moore’s Law, in which the number of transistors doubled, about, every two years. Metcalfe’s Law (the network effect) combine with Bitcoin doubling and adds more value. Both combine and should provide an average of 100% price increase per year. Not every year, but on average. DECENTRALIZED Bitcoin is the first-of-three elements for the emerging new renaissance. Bitcoin is the new florin. Real savings is safe again: for the financial class, middle class, and poor.
DECENTRALIZED PRESS: Around 1440, Gutenberg invented the printing press and started the printing press revolution. The invention greatly decentralized content creation. Gutenberg’s two inventions included the hand mold, used for casting hand-made type, and the printing press. Together, they drastically reduced the cost of printing books.
Note: With technology, prices go down. Inflation is synthetic GDP. Prices go up.
“800 authors, printers and book dealers were incarcerated in the Bastille prison. Printers were viewed as radical and rebellious. The prohibitions of church and state often followed each other.”[2] “For example, René Descartes was placed on the Index of Prohibited Books in the 1660s.”[3]
Just like the decentralization effect of the Gutenberg’s printing press, the decentralized internet is a contributor to an emerging new renaissance. Initially, the internet promised decentralized content. China’s Great Firewall and Russian Federation censorship are now filtering the internet and damaging the decentralized promise. Internet censorship is good for the hierarchy. Bad for everyone else.
Ad-based media is also harmful. Taxing paid-ads would be an effective method for reducing the insidious disinformation, and would assist in decentralizing the media.
Bitcoin and Lightning Network are providing censor-proof transactions. Lightning Network will provide censor-proof messaging and may provide network configuration … effectively masking IPs. In other words, decentralized Bitcoin may enhance the internet’s decentralized intent. Just like Gutenberg printing press, the internet will eventually bust through censorship and accelerate knowledge and technology.
PLAGUE-CONTRACEPTION: The Black Death was a bubonic plague occurring in Afro-Eurasia from 1346 to 1353. 75–200 million people in Eurasia and North Africa died. The Bubonic plague was spread by fleas, and person-to-person, aerosol transmission. Plague doctors wore bird-like beaks, filled with herbs providing some level of filtering. “It is estimated 30 percent to 60 percent of the European population died, and this plague may have reduced the world population from 475 million to 350–375 million in the 14th century.”[4] “The European population did not regain its population level in 1300 until 1500.”[5]
High population growth is good for building a hierarchy. Bad for everyone else. The bubonic plague provided a rare precursor for the 14th century Renaissance, a reprieve from the human condition. The phenomenon is a simple balance between supply and demand. Oversupply creates grinding competition. “The black plague reduced the Afro-Eurasia population, and according to Figure 5, reduced the world population.”[6] A rare event. After the black plague, real wages naturally went up. Covid-19 is creating a parallel precursor. On a planet nearing eight billion people, the current count of more than 5 million Covid deaths alone are not significant. The stabilizing population is the result of decreasing fertility and increasing mortality to due to the aging population. Hence the contraceptive is layered with the plague-icon and condom image above.
“Globally, the total fertility rate dropped from 3.2 in 1990 to 2.3 in 2020.”[7] The fertility rate may drop to 2.1. Stability could happen sooner than expected. This is good news for conservationists. Bad news for Keynesians, Marxists and other central economies banking on growth forever.
Iran is reacting to the stabilizing population by adding … “more red tape to abortion restrictions, bars public health-care providers from offering free contraception, prohibits voluntary sterilization and offers more benefits to childbearing families.”[8]
Treating people like cattle is good for the hierarchy. Bad for everyone else. Bitcoiners know sound money flips the incentive from consumption to savings. Zooming out and considering compounding exponents, sound money flips the incentive from hyper-consumption to conservation. This is why Bitcoin is the apex environmental solution.
At the center of fiat macroeconomics, lies the magic money printer. The yellow-brick road is the same for Keynesianism, Marxism or The Islamic Republic of Iran. Each narrative is different, but each central economy protects the magic money printer with growth-forever.
Keynesians need synthetic GDP to roll debt to new notes and forever avoid debts coming due. In our current US fiat experiment, Keynesians have come to believe they can roll debt forever. Growth forever is a yellow-brick road and a man behind the curtain, artificially manipulating the interest rates lower for the financial class. At the same time, the devalued fiat steals savings, steals wages, and steals fixed income. Prices going up is good for asset holders. Bad for everyone else. Technology is deflationary and lower prices are good for everyone else. Growth-forever, money printing is a yellow brick road, a matrix, an illusion. Synthetic GDP.
Growth forever is unrealistic on our finite planet. Finite implies zero sum and denotes a situation where gain by one side is lost by the other. There are finite resources on Earth. Clean air, clean water, and clean soil. Zero-sum theory has some merit. World population has grown from one billion to almost eight billion in 200 years. After the next 10X, we will be at 80 billion. Shall we grow forever? When is stability a better plan?
Fiat currency is inflationary by design. Printing wealth centralizes the energy created by everyone else. According to Figure 2, money printing clearly centralizes productivity gains. Simultaneously, the fiat currency devaluation stimulates consumption and is good for the hierarchy. Bad for everyone else. Even more simplistically, fiat currency feeds hyper-consumption. Bitcoin is savings. Bitcoin is conservation because savings can’t be inflated away by central banks. Bitcoin is rooted in an energy consuming, Proof of Work. POW stops counterfeiting because central banks can’t print energy.
More significantly than the mortality rate, Covid-19 is reducing the birth rate and may continue beyond the pandemic. The slowing birth rate for the first time since the Black Plague may stabilize population growth. China increased their birth allowable, but most educated Chinese women are not having any it. Educated women know having children will limit future opportunities. It is a subconscious and conscious understanding of oversupply.
Central banks pretend otherwise. Janet Yellen has advocated permanent subsidies for children. Banksters use Keynesianism to engineer infinite, synthetic “growth” thrusting the global populations into life sentence of indentured debt. Debt serves the financial class. Bad for everyone else.
Hierarchies around the world are against lower birth rates. The Russian Federation, The Chinese Communist Party (CCP), Mormons, Muslims, Orthodox Jews, Catholics, and other hierarchies. Covid-19 combined with contraception may stabilize human population. If so, Covid-19 and contraception will be a critical contributor for a Renaissance Trifecta.
Bitcoin is a force multiplier because Bitcoin flips the incentive from consumption to real savings. Your time and energy are no longer inflated away to the financial class. Real savings will return. Subsidized, growth-forever will be blunted. Imagine life after the Renaissance Trifecta. Imagine if it happens. Technology is highly deflationary. Prices will go down. Productivity gains will no longer be hijacked by money printing. Real wages will rise, and prices will go down just like they did during the flourishing of 14th century Renaissance.
Conclusion:
1) Central Bank money printing is good for the hierarchy. Bad for everyone else. The florin provided sound money for the first element of the Renaissance Trifecta. DECENTRALIZED Bitcoin, Proof-of-Work and 21 million hard cap provides sound money for the new Renaissance Trifecta.
2) Censorship is good for the hierarchy. Bad for everyone else. The Gutenberg printing press decentralized content for the second element of the Renaissance Trifecta.The DECENTRALIZED internet parallels the Gutenberg printing press and provides the second element of the Renaissance Trifecta.
3) Exponential population growth is good for the hierarchy. Bad for everyone else. The Black Plague provided a precursor, a short reprieve from the human condition. Covid-19 is increasing mortality and reducing fertility and may provide the third element of the Renaissance Trifecta, a slowing population growth. Population stability may happen sooner than expected.
Sound money, decentralized press and a slowing population is the Renaissance Trifecta. Each element is a decentralizing force … increasing real income and decreases nominal entitlements. Bitcoin, the decentralized internet and slowing population will provide an exit. The Trifecta will effectively swing the pendulum of power from centralized governance to decentralized, sovereign individuals. Just like the 14th century Renaissance, the new Renaissance Trifecta will provide a resilience experienced in the past. A resilience that begins with sound money. A Renaissance Trifecta that may last for centuries.
For additional Bryan B Solstin content, Bitcoin use-cases at https://zenimal.xyz/use-cases
Footnotes:
[1] Ricordanze (Recollection) di (of) S. Maria di (of) Cafaggio, mentions florins being used in the year MCCL (1250)
[2] de Sola Pool, Ithiel (1983). Technologies of freedom. Harvard University Press. p. 15. ISBN 978–0–674–87233–2.
[3] Putnam, George Haven (1906–1907). The censorship of the church of Rome and its influence upon the production and distribution of literature: a study of the history of the prohibitory and expurgatory indexes, together with some consideration of the effects of Protestant censorship and of censorship by the state. New York: G.P. Putnam’s sons. p. 250. ISBN 9780524007792. Retrieved 8 February 2017.
[4] “Historical Estimates of World Population”. Census.gov. Archived from the original on 2 May 2019. Retrieved 28 April 2019.
[5] Galens, July; Knight, Judson (2001). “The Late Middle Ages”. Middle Ages Reference Library. Gale. 1. Retrieved May 15, 2020.
[6] World population growth (log-log scale).png, Created: 6 March 2010, https://commons.wikimedia.org/wiki/File:World_population_growth_(lin-log_scale).png#/media/File:World_population_growth_(log-log_scale).png
[7] PRB’S 2021 World Population Data Sheet Released, August 17, 2021, https://www.prb.org/news/2021-world-population-data-sheet-released/
[8] DEC 1, 2021, Miriam Berger, “Iran doubles down on abortion and contraception restrictions,” https://www.washingtonpost.com/world/2021/12/01/iran-doubles-down-abortion-contraception-restrictions/
