Three Reasons I’m a Bitcoin Purist
Bitcoin is crypto. Crypto is not Bitcoin. Don’t get it twisted.
Bitcoin in the age of moral hazard
One of my great frustrations in writing this column is the stark realisation that most people know absolutely nothing about the money they use.
They don’t know where it comes from. They don’t know how it works. They don’t care. Money is taken for granted, like air and water.
For them, money just is.
Trouble is, money is not a product of nature. Money is a human creation that has a very specific purpose: Legalised theft.
Put plainly, money is the instrument that powerful people use to extract wealth from powerless people. And, for whatever reason, be it intelligence, disposition, character traits, or what have you, most powerless people just don’t care.
Likewise, for whatever reason, be it intelligence, disposition, character traits, or what have you, a very tiny percentage of people are obsessed with obtaining the power of legalised theft, regardless of external costs to others.
Meaning, given an opportunity in the presence of money, a tiny percentage of people will devote all the resources they can muster to obtain as much money as they can.
And, since most don’t understand money, the only limitation they face is competition from others who are similarly obsessed with obtaining the power of legalised theft.
Which leaves a pretty good chunk of the population like myself, who do understand money and are not obsessed with obtaining the power of legalised theft.
As a pure guess, I’d wager about 20% of any given population is like me. They understand money, the understand they’re getting screwed, and they just kind of bounce along, doing their best to minimise how screwed they get.
Historically, it makes sense, especially when we’re talking about money. At the end of the day, what else are you going to do? How do you stop powerful people from stealing from you?
It’s much the same as dealing with any bully. Either you become equally or more powerful than the bully and insulate yourself, or you try to blend in with the rest of the schmucks.
And, in the case of money, the more you have, the more powerful you are. Meaning, you have to join the tiny percentage of people that are obsessed with the power of legalised theft to insulate yourself, because there was no other option.
Until now.
Reason #1: Bitcoin is an equaliser
There is an adage from the American Frontier West: “God created man and Sam Colt made them equal.” Sam Colt, of course, being the inventor of the Colt Paterson Revolver, a six-shot handgun.
Much as the left-leaning types might like to dismiss them, firearms changed everything. It is no coincidence that the French and American revolutions occurred right around the time mass produced firearms came along.
If you’re a bunch of farmers and tradesmen, it’s pretty hard to put up a fight against a professional, mounted army with pike and bowmen. It gets a lot easier to fight if you can shoot back from a distance.
The same is true for money. It’s pretty hard to put up a fight to keep your money if the people that print the money can both legally steal it from you by force (tax) and make more of it any time they want. This gives them an exponential advantage over scrubs like you and me.
If a few dozen farmers and tradesmen have guns, but the rest are wielding pitchforks and clubs for weapons, the professional army is still going to steamroll them, because they have exponentially more ability to project physical force.
But, when a few thousand farmers and tradesmen have guns, mounted infantry and pikemen will get rekt. When it gets to tens of thousands of armed farmers and tradesmen, people that run professional armies can’t steal as much as easily.
Yes, they might still win eventually, but it’s going to cost them a lot to find out. Meaning, the professional army has lost their exponential advantage.
Not to mention, they might just lose.
What guns did for freedom from physical coercion is even more true for Bitcoin and money.
If thousands of people hold Bitcoin, the people that print and steal money can steamroll them. But, when millions or billions of people hold Bitcoin, the people that print and steal money can’t win.
They can’t print more Bitcoin. And, they can’t steal Bitcoin. Well, at least not easily, and certainly not at scale. They have to pay for it, just like everyone else.
They’ve lost their exponential advantage. They just don’t realise it yet and BlackRock, et.al. just greased the wheels of their own decline.
Sam Colt may have made men equal physically. Satoshi Nakamoto made them equal monetarily.
Reason #2: Bitcoin is the only choice we have
Crypto Bros like to endlessly talk about “use cases” for their pet crypto. At the end of the day, most of it is nonsense.
Even if there is a valid “use case” that scales to an actual need for an improvement in a service, that doesn’t mean that “use case” will need a branded token.
Every crypto from Ethereum forward has one very clear “use case” for the branded token: To raise money from investors.
That’s why virtually all of them are securities under US law. That’s why virtually all of them pump hard and then dump in price, never to see another high again.
They’ll say all kinds of things to get that pump and dump going. “It’s better than Bitcoin,” they say, because it has smart contracts, or faster transactions, or whatever.
Those things are not features. They’re vulnerabilities.
Bitcoin is the most secure digital monetary network ever conceived. It is a zero-trust, egalitarian access network secured with a massive physical infrastructure, 150TW/h of electricity, and 220EH/s of raw compute power.
There is no other monetary network that can compete with Bitcoin, including legacy finance and banking. Bitcoin was conceived as a transactional network, but it’s become wealth storage network.
L2s like the Lightning Network bring transactional functionality to Bitcoin. But the true power of Bitcoin is the ability to digitise and store wealth that mathematically can’t be inflated away.
It’s imperfect for the early adopters, like me and you, because the nominal price fluctuates in the short-term. But, early adopters are rewarded for taking that short-term risk via long-term asset appreciation.
Regardless, there is no alternative to Bitcoin. There is no other asset class on planet earth that is not subject to:
- Sovereign capture;
- Inflation; or
- Both.
The current legacy financial system is designed and engineered to extract your wealth and productivity from you and route it to the people that inherited the system.
There’s no politician that’s going to fix that. There’s no banker that’s going to fix that. Gold won’t fix that. There’s no other crypto thingy that’s going to fix that.
Bitcoin is literally the only option we have.
Reason #3: Bitcoin is the moral choice
With the current legacy financial system, the more wealth you generate and keep in that system, the more that is available for theft. And, if you are in the United States, that stolen money and wealth is directed to:
- The military-industrial complex
- The medical-pharma complex
- The banking-finance complex
In turn, those “complexes” use that stolen money and wealth to destroy other people’s money and wealth for profit. It is, fundamentally, an immoral system.
Bitcoin is not based on theft. It is based on voluntary cooperation. If you contribute wealth to the system, all boats rise. If you remove wealth from the system, all boats sink.
And, generally speaking, since Bitcoin was created, more people are contributing wealth than removing it. It’s just like a city. If more and more people move in and become productive, the city thrives.
If more and more move out, the city falters. To extend the analogy, if you move from an impoverished area with no opportunities to a thriving city with lots of opportunities, the people that came before you have, in effect, lifted you up.
If you’re a middle-income American, you might take Bitcoin for granted, just like you might take for granted all the opportunities you have if you grew up in a thriving city. But, for the person living in poverty in Afghanistan, or Venezuela, what seem like trivial opportunities to you are monumental opportunities for them.
Bitcoin is a thriving, frontier city that is accessible from anywhere in the world with a network connection. As a relatively wealthy person (in a global sense), every penny you contribute to the Bitcoin “city” helps lift a poor person up.
And, just like a thriving city, what you contribute helps lift you up as well. It’s a city without borders. It’s a city with unlimited capacity. The only restriction on entry is the need to be provably productive.
Bitcoin takes from thieves and gives back to productive people. It’s not only a moral choice, it’s a moral imperative.
Conclusion
It’s taken me far longer than I like to admit to fully appreciate Bitcoin. I was wrong about Bitcoin for a long time. In fact, I have been wrong about Bitcoin for nearly as long as Bitcoin has been around.
I hope those of you who have been on this crypto journey with me on Medium know me as a thoughtful and conscientious person. For my part, I have done my best to be a thoughtful and conscientious person.
I’m certain I’ve made missteps. I’m certain I haven’t always lived up to that ideal. I’m certainly trying my best to fix those shortcomings tout de suite.
I’ve very publicly documented my journey to fully embracing Bitcoin as a Bitcoin purist. I’ve tested the Bitcoin thesis from every angle I can imagine and I’ve concluded Bitcoin is a monumental achievement for the human race.
It’s a shame it took me so long to realise it.
These are just my opinions. I’m not a financial advisor, this isn’t financial advice, and always DYOR. Following any of these ideas might cause you to lose all of your money. I am 100% serious about that. I like tinkering with this stuff, but I’m on record acting like a total baboon. Invest accordingly.
Until next time, be safe, be smart and be sure to tie the camel.
