This is a piece by Aleks Svetski that was published in Bitcoin Magazine. If you’ve not listened to or read anything by Alex, he brings a deeper perspective that draws on a variety of vectors. Enjoy.
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Fix the Money, Fix the World: What a bitcoin standard would mean for the World
This is an article which formed the basis of my talk at Bitcoin 2021 in Miami (see video above) and was inspired by the longer-form article I wrote a couple of months back entitled “Fiat, Fascism And Communism”:
My intent during the talk, and in this article here, is to remind you, the reader, of what you may already know or what perhaps you are starting to slowly realize about Bitcoin.
Yes. Bitcoin is the most important economic decision you’ll make in your entire life. Nothing else comes close. In fact, it’s probably the most asymmetric economic opportunity any group of people will ever have had, in the history of humanity. And you’re lucky enough to be alive during this period.
Bitcoin is the final Cantillon opportunity in the sense that by reading this, you’re early enough and close enough to the greatest wealth transfer in documented history. That is a big deal.
But no, that’s not what I’m here to talk to you about. NgU technology is important, and of course it’s the centerpiece of the Bitcoin flywheel, but I don’t need to remind you of that.
What I want to remind you of is the moral duty of moving into Bitcoin. It’s at the core of why we’re all here, whether you realize it or not.
The world is being overrun by collectivist statists and central planners of every kind. You see it all around us. Whether they’re democratic, or conservative, fascist or communist, socialist, globalist, MMTist, utopian or another misshapen form or blend of authoritarian dictator — it doesn’t matter.
They are tearing apart what humans have built for millennia, they’re sucking the energy, will and passion out of people, turning them into empty automatons and their short-sighted stupidity is going to drive us back into the Dark Ages.
Bitcoin and Bitcoiners are here to change that, not by replacing one group of arbitrary rulers with another, but by removing rulers altogether and replacing them with a set of verifiable, incorruptible rules that nobody can take advantage of at the expense of someone else.
When the means via which human action is measured, stored and transacted is OUTSIDE of the hands of any group, organization, foundation, institution or state, we have TRUE equality of opportunity.
Until then, we have stagnation. We have corruption. We have theft. We have waste. We have poverty. We have wealth redistribution by bureaucrats (the dumbest of the dumb in society). We have environmental destruction. We have state indoctrination instead of schooling. We have the oppression Olympics, where everyone is a victim. We have sludge instead of food. We have scientism instead of science.
Bitcoin rug-pulls the statists and changes not only the returns to violence as discussed in “The Sovereign Individual,” but it transforms each individual’s relationship to time, their future and natural resources.
When the individual changes their behavior for the better, the world changes for the better.
That is why “Bitcoin fixes this.” You start with the individual and spread outward.
So, let’s look at Bitcoin’s impact on the world in a few key areas.
1. SOCIAL MOBILITY
Classes will always exist in human society. It’s normal and perfectly natural. People are different and dynamic. We excel at different things, we apply different levels of effort, we have varying degrees of talent, we’re born to parents of a different level of competence and have teachers and friends throughout life who all impact us in different ways.
The result is an unequal distribution of wealth and resources. Which is, once again, perfectly fine. That is natural in a society that is layered, diverse and multifaceted.
The problem is more nuanced. We don’t have natural 80/20 inequality anymore (pareto-type distributions), but we have completely unnatural inequality (99.9/0.1 distributions).
This is something very few seem to understand, even people who I highly admire, like the Jordan Peterson’s of the world. They seem to think that, somehow, concentration of wealth (for example) can continue unabated without some form of “rigging the game.”
I like to differentiate inequality as follows:
This is the bad kind. It’s the world we live in today and it’s the kind that continues to make the poor poorer and the rich richer because whoever controls the rules of the game (the money) can play “heads I win, tails you lose.” It’s central feature is moral hazard and the goal as the ruler is to remove skin from the game (i.e., someone else pays the consequence for your bad decisions).
This is the good kind, in which everyone is playing by the same rules, everyone has skin in the game, you can move up the social hierarchy and, just as importantly, if you make stupid decisions you can move down the social hierarchy. A key characteristic of this type of natural, complex system is a beautiful, dynamic equilibrium that forms over time because social mobility is tied to competence, effort, value and energy.
How does Bitcoin fix this?
The central banking, statist and government model today is the bastion of moral hazard. You have the “public” officials with zero skin in the game making decisions on behalf of us and our future generations, with no regard to the cost or the consequences of such decisions.
In a similar vein, central banks, banks, Wall Street, tech oligopolies and anyone else who is close to the monetary spigot can privatize any gains they make, and then socialize any losses they’ve incurred.
Boeing is a great example from 2020. You and I paid for it to stay in business. It stayed at the top of the hierarchy and us idiots in the middle funded it. Today’s tech giants are similar. They are major beneficiaries of the ridiculous amount of money being created, borrowed and subsequently handed to Wall Street, who then ploughs it into their stock. They become unnaturally strong and any upstart with a better product or service has no chance of competing.
You wonder why censorship is such a problem? It’s not a lack of some “decentralized alternative” that nobody is ever going to use. It’s a lack of viable competition.
Break the corrupt game of fraudulently concentrating wealth through direct and indirect confiscation (taxation, inflation, regulation) and you re-introduce competition into the system. With competition, you begin to get quality.
When a business requires customers in order to survive, they treat them well. When a business can get bailed out or be the recipient of all the free money being created by the bureaucrats, then it doesn’t give a shit about its customers. It can censor them, force them to breathe through face diapers and much more.
Anyway, I digress.
The world we live in today is split into feudal-like castes or classes that are extraordinarily difficult for individuals to move between.
If you’re at the bottom, you cannot climb because the product of your labor (the money you earn) is being debased faster than you can earn it. You barely have enough to feed yourself and you’re completely disincentivized to save.
Savings are the cornerstone of civilization. One cannot climb without having a foundation upon which to build. It’s like building a house made of sand, on ground made of quicksand.
The result? You’re stuck at the bottom, and relatively speaking, you get poorer as time passes.
It gets worse. If you’re at the top, and parasitic enough to stay there, you not only have access to more, but what really decays the system is that you can privatize any gains you make and socialize your fuck ups. You can stay at the top fraudulently and this is just as bad for the “system” as being stuck at the bottom. This is how the system rots (to quote Nassim Taleb, the “IYI”).
And who foots the bill for this entire thing? Me, you, your friends and your family. The productive engine of society. The middle class (whether lower, mid- or upper) who produce most of everything, we pay for it all.
We support the poor, and we simultaneously pay the jailers to keep us enslaved. It’s pretty messed up.
This concept right here, the transformation from static inequality to dynamic inequality, is what I believe Bitcoin’s greatest impact on the world will be.
The right-hand side of the diagram above is what Bitcoin enables. A playing field in which classes of people will still exist, but that are separated by a permeable membrane.
Yes, if you’re broke, poor and young, you’re going to have to work to climb, but the product of your labor cannot be debased, and your time, effort and energy can be better valued. You have a solid foundation upon which to build your wealth.
If you’re at the top, and you got there through competence and merit, you must either keep producing to stay there, or invest in other up and coming entrepreneurs/producers who are climbing and building value for everyone in the stack. At the same time, if you’re at the top through luck, or you were early and you’re either a parasite, a moron, you make bad decisions or you just want to blow your wealth on hookers and coke, you will fall down the social hierarchy. You can no longer stay there at someone else’s expense.
This means each individual is not only free to do what they want, but each individual bears the cost of their decisions and the fruits of their labor.
This has profound implications on society, moral behavior, meaning, time preference, the environment, generational wealth, art and so much more which will require a book. I’ll save that for later 🙂
2. THE ENVIRONMENT
Next up, we have the environment.
There are other writers, namely Hass McCook and Nic Carter, who’ve both written at length about this topic, so I won’t rehash their work.
You can check it out for yourself and discover that Bitcoin is far more efficient than the infrastructure required to support the existing monetary and financial system.
I will also point out that there is a lot of talk about using renewables to support Bitcoin’s hash rate and network security. I don’t entirely buy that because I believe that unreliable, dilute energy capture mechanisms are far worse for not only the environment (you have all the energy input upfront, which rarely gets paid back) but for human prosperity (how much better we’re able to allocate our time when we have energy abundance), and as the backbone for the most reliable money to ever exist.
But again — that’s another topic, and for now, Bitcoin is not only more efficient, but it’s actually making those unreliable forms of “renewable” energy more useful than they would otherwise be.
My argument for Bitcoin’s impact on the environment goes deeper.
My contention is that the greatest harm we can do to the planet is to pollute without consequence and waste scarce natural resources on moronic mandates and ridiculous pipe dreams conjured up by statists, bureaucrats, academics and governments who don’t pay the bill for the damages (you, me and the natural environment do).
Money literally measures time, energy and scarce resources (matter).
When money is fake, valueless, meaningless and has no basis in thermodynamic reality, the things that it represents are squandered and wasted.
The existing monetary system is literally burning up the world’s resources and our collective lifeblood because they can produce money out of thin air, and waste it!
In this way, by supporting the fiat monetary system you are directly destroying the environment!!!
Furthermore, because human time and energy, when directed toward productive ends, means the creation of better, more energy efficient products and services, by cutting the bureaucratic waste out of the system we further help the broader natural environment by using the capital stock more intelligently (we’re confronted with the reality of its cost).
The natural incentive of the productive individual is to do more with less.
This is actually the very essence of capitalism. It’s the process of taking scarce time, energy and natural resources and transforming them into something of higher value and utility.
Capitalism is the transformation of chaos into higher order.
The implications of Bitcoin’s impact on the environment and the more sustainable and efficient use of energy and resources is staggering.
I imagine we could likely feed 100 billion people, transform the toughest of terrains, green the desserts, clean up the oceans, master energy production and learn to build gardens and monuments, instead of barren concrete wastelands.
I wrote about this in more length in “Fiat, Fascism And Communism,” and will dedicate an article to just this topic, but suffice it to say the following:
- We no longer have education. In fact, we no longer have structured education (i.e., schooling). We have state indoctrination camps where young, impressionable individuals are fed a steady diet of propaganda and dependency with a side of rote memorization for STEM topics.
- You’re told that some bureaucrat in an office somewhere knows what’s better for your children than you do.
- Instead of allowing free spirited, young individuals to flourish by pursuing what they’re talented and pre-disposed toward, the state believes it’s better to shove them through a sausage machine for 12 years until not only are their talents forgotten, but any critical thinking and individuality has been beaten out of them.
- Then they’re told they should go into debt for some toilet paper college or university degree which is either outdated, completely economically and/or socially irrelevant, and that they will likely never use.
Once again, the state not only produces the absolute worst product imaginable, but they do it with your money, that you worked for, that they took from you at the point of a gun or the threat of imprisonment.
Don’t believe me? Try not paying your taxes for a few years, and see what happens. Even if you don’t use any of their shitty services.
It’s like walking into a shop to buy a new sofa. As you walk in, the agent punches you in the face, takes a dump on the sofa and charges you triple for taking it.
On a Bitcoin standard this won’t happen. Their entire eDucAtIoN system will collapse, and hallelujah for that.
Parents are far better educators for their kids*, the internet has made better education cheaper and practically free to just about anyone, anywhere and there are millions of brilliant teachers, educators, philosophers, writers and mentors who will have the opportunity to build their own centers of excellence, whether large or small.
*Yeah, I know, there are a few asshole exceptions, but you don’t handicap the vast majority of good parents for the few dipshits.
4. THE ECONOMY
I won’t go into much here except to state that as the sound money foundation broadens and solidifies, the system will naturally re-introduce accurate price signals and true information will flow orders of magnitude more efficiently.
Money is the fabric that binds us all. It measures human action and is used by humans to measure subjective value. One of its most important functions is to transmit information and it does so with prices.
If you fuck with the money, you fuck with the transmission of information and those on the receiving end make the wrong decisions, which then creates a positive feedback loop (with a negative consequence) that further spirals the system out of control. And while there are rational players in the system which counteract some of the madness, when the transmission medium is broken, there’s only one destination: destruction, waste, misallocation.
Our mOdeRn eCOnoMy looks like this guy here:
With Bitcoin, we fix this too.
“Bitcoin is an information and energy superconductor.”
– Svetski, “Bitcoin, Chaos And Order”
When price signals are accurate, when the right information is flowing, we can discover not only opportunity, but truth. The result will be the creation of solutions for the biggest problems, because that is where the greatest opportunities lie.
Need is what drives demand, which in turn is what drives supply, which is what incentivizes the producer.
Need → Demand → Supply → Production → Entrepreneur/Producer.
Today, we have a completely deformed economy where money filters through to moron VCs and bankers who believe that what people “need” is another dick pic app, or convoluted gambling platform disguised as “fintech.”
They pump money into these dumb ideas, they then market the shit out of them on the mainstream and social media networks that they also fund and control, and we all wonder how we become users of the next dumb app that nobody needs or wanted in the first place.
Meanwhile, over in Africa, Latin America, Eastern Europe and Southeast Asia, people are dying of starvation, living in the dirt, in the darkness, with no clean water or clothes.
It’s fucking disgusting. And it’s a direct result of the legacy monetary system.
Not only does it enslave these poor nations with dirty loans from institutions like the IMF and World Bank, but smart, intelligent people who would otherwise go solve problems over there are instead incentivized to work on Wall Street or program for the morons at Facebook, or some other ridiculous Silicon Valley startup that got major funding because they “knew a guy.”
The fiat-toilet-paper price of bitcoin will go up, down and around in circles in the short term, and if you focus on that, you’ll lose your mind.
I want you to remember why you’re really here.
You, as Bitcoiners, are here as the white blood cells of the network. You are the cyber hornets. Each and every one of us is here with a moral duty.
We are here to slay the frauds. The collectivists. The eco terrorists and fascists. We’re here to slay the cry babies, the fiat slaves and think bois.
And as we grow this, our very existence will slay the evil cartoon villains who believe that they know how to run your life better than you do, and will stop at nothing to make you pay for their lavish lifestyle.
The shitcoiners and charlatans are irrelevant. They’ll continue to be pathetic, desperate slobs with dreams of being the next Epstein or Fragile Taleb.
You and I are here to be warriors. To fight. To build a free world. To help each individual become sovereign, starting first and foremost, with ourselves.
So buy and save bitcoin. Together, we will starve the fucking Beast.
By Aleks Svetski, founder and CEO at www.amber.app and on Twitter @GhostOfSvetski.
This is a guest post by Aleks Svetski. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
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