Can Bitcoin Save Us?
LOL
Following last week’s article, entitled How Much Money Is in the World?, in which I explained the banking industry’s $100 trillion crime that has devalued your money, sent prices soaring, and locked all future generations in rent serfdom, I received the following message from a subscriber:
“When you write an article like this (which I totally agree with) I wonder why you are so down on BTC, which can’t be inflated away like fiat. An article about your BTC journey would be interesting to me…”
Fair enough, here we go.
There are essentially four money-creation models:
The historical model is to dig gold and silver and copper out of the ground and get your government’s mint to stamp it into coinage.
The current model is to let powerful private bankers monopolize money-creation and print unlimited amounts of debt-based interest-bearing credit-money, causing a colossal transfer of underlying real wealth from workers to the idle rich, compounding year after year (currently $330 trillion “owing”) until civilization collapses.
The third model is my preferred model, which is called sovereign money. I’m of the opinion that the players of any game should decide the rules of the game they’re forced to play, so true democracy should dictate the terms of money creation. Debt-free sovereign money would be created democratically, then lent interest-free and invested solely to create new (and ideally deflationary) commons assets — hyper-affordable homes to sell to would-be homeowners at cost, enough clean power to send energy prices to near-zero, public transportation like vactrains, maglev taxis, etc. Because asset-creation will always outpace currency creation, prices will continually fall and the dollar will continually strengthen. In the process, we’ll create a high-trust society.
The fourth model is to let everyone privately create money and let the market decide.
This is where Bitcoin comes in.
Cryptocurrencies are pseudo-money built on a blockchain, which is a trustless, decentralized, encrypted digital spreadsheet.
Anyone can privately create one.
And boy, do they.
As of this morning, there are over 16,560,000 cryptocurrencies and tokens, with 57,335 new ones coming online just yesterday.
Nearly 100% of these are straight-up scams.
Allowed unbridled private money creation has all sorts of challenges:
Obviously, it leads to a proliferation of fraud. Why would we want to put our young people, old people, unintelligent people, and vulnerable people at further risk of exploitation? And why should the taxpayer have to police the schemes and scams of millions of money-creators?
Market instability. It’s hard for people and businesses to plan and budget effectively when there are millions of currencies all whipsawing in price.
Inequality. Rich people and rich corporations have more resources to create and promote their currencies, even if they’re inferior products. This further concentrates economic power and grows economic inequality.
Transaction costs. Mastercard, Visa, Stripe, and the rest of the payments processing ilk already rob a huge percentage of our money, not unlike the moneychangers that Jesus drove out of the temple. With tens of millions of currencies in circulation, virtually every purchase would require several currency exchanges.
Monetary policy. When all money is created privately, democracies lose the ability to direct the economy toward national goals and objectives like ending poverty.
Currency wars. When there are millions of currencies fighting for customers, it incentivizes all of them to undermine and devalue their competitors to gain an advantage.
You don’t have to believe me.
You can just look at history.
America used to do private money creation.
At one point, nearly every city in America had its own city bank that issued its own currency.
Each value of each bank’s money was based on its reputation and financial stability.
It was the Wild West, and it led to endless bank runs, millions of bankruptcies, untold suicides, and the creation of the fraudulent, quasi-government (but actually private) money monster called the Federal Reserve.
Chaos creates the grounds for dictatorship.
Can you hear the Bitcoiners howling?
“Yeah, but Bitcoin has a limited supply!”
Right.
Bitcoiners have an autistic obsession with the fact that Bitcoin has a limited supply.
“Only” 2.1 quadrillion satoshis will ever exist.
How very impressive.
That’s 2,100 trillion.
That’s 2.1 million billions.
That’s 2.1 billion millions.
That’s more than 10 times all the money currently in existence.
So let me get this straight — you hate U.S. bankers for creating $21.86 trillion out of thin air… but you’re okay when someone else creates 96Xs more money out of thin air? Are you demented?
Bitcoiners insist they’re different, but it’s actually just more of the same — economic injustice and exploitation for all.
Think about it:
If you purchased 10,000 Bitcoins in July 2010 for $0.08 apiece, you’d now be sitting on a pile worth $1,051,981,000. I’m sorry, but $800 worth of work 15 years ago shouldn’t be rewarded with a billion dollars.
And what are all these Bitcoiners doing with all their hoarded Bitcoin?
They’re just hoarding it.
They’re lending it out on decentralized finance platforms for interest.
Millions of Bitcoiners have zero plans to ever sell or spend a single Bitcoin. The plan is to lock it in digital vaults as a reserve currency, then create digital Bitcoin-backed tokens that they can lend at interest.
In other words, they want to be the new central banksters, the new monopolistic overlords of finance who decide who gains access to money and who gets shut out. Like the capitalist bankers before them, they won’t lend interest-free to civilizationally-beneficial projects — they’ll chase the highest returns to themselves.
And we know what interest does to society: It collapses civilizations.
Interest guarantees there’s never enough money to repay all the principal + interest owing, and when you compound this for long enough, the people starve and your nation gets destroyed.
That’s the problem with all these Bitcoin-worshippers.
They still love money; they just call it by a different name.
And whether they like it or not, the love of money is the root of all kinds of evil.
Conclusion
Obviously, everything has costs and benefits.
I’m not against Bitcoin.
I’m against interest. I’m for lending freely without personal gain.
I’m against monopolization. I’m for sharing.
And frankly, millions of Bitcoiners are far-right libertarian rules-free-market hyper-individualist sociopaths. I wouldn’t want to be forced into using a single currency on their terms any more than on central bankster terms. It’s a false dichotomy; both options are wretched because they leave the masses (and especially the poor) at the mercy of the asset-hoarders.
Thus, why I prefer sovereign money — democratic, accountable, safe-guarded, fair, just, non-exploitative, accessible, nation-building currency.
I want honest money.
I want money that creates plenty.
I want predator-free money.
And Bitcoin ain’t it.
PS — I’m putting together a course on honest economics. If you want a free copy when it comes out, let me know here.
Also, check out a recent talk I gave entitled A Revival and a Riot: A Tale of Two Economies
Money for nothin’