I wish more people knew about Bitcoin’s connection to the bank bailouts. Bitcoin unfortunately does not have the best brand ambassadors. This week is a great opportunity to tell your friends about it, because it matters.
The 2008 bank bailouts were a major motivator behind the creation of Bitcoin. The first block ever mined even contains a reference to it: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks. During the bank bailouts, the government just printed a bunch of money and gave it to the banks, around 700 billion USD. They did this because it was politically expedient, well really because they had to or the whole damned system would collapse. And the 99% ended up paying for the mistakes of the 1%. All of us were made to pay for the mistakes of a very small, incredibly powerful and wealthy segment of society who made reckless investment decisions. People lost their homes, their jobs, their livelyhoods, their savings, and yet not a single one of those bankers went to jail. Instead, they took the bailout money and gave themselves extravagant bonuses. Yet the problem is not new, throughout history, every nation that has ever failed, has had their currency end in hyperinflation. The temptation to print money is too strong. Perhaps it is something that should not be entrusted to politicians or even humans at all.
Satoshi, in his wisdom, created a system by which no new money could ever be printed. No corruptible, tempted authority could use it to turn on the money printer and rob entire generations of their wealth or force them to pay for wars they did not support. He made a currency which cannot be corrupted and cannot be hacked, with 99.9% uptime, with instant transfers across borders. It is neutral technology open to anybody with a phone or a computer and access to the internet. Which is much less than you need to open a bank account. Bitcoin doesn’t care about your credit history, or whether or not you can provide a reliable mailing address. Bitcoin doesn’t close on weekends and will never charge you exorbitant fees to use your own money. You never have to wait days for a payment to clear. Bitcoin puts you in charge of your money and nobody else. And it makes sure nobody can print away its value.
But then a bunch of people came along selling get-rich-quick schemes based on crypto technology, and everybody goes “crypto bad”. Satoshi gave a gift to the world. He didn’t stick around to get rich off it, he didn’t use it for celebrity, he just made Bitcoin and disappeared. Thank you Satoshi for your gift to the world.
If I point a gun to your head and tell you to send me all your bitcoin, you will probably do so, and then you will call the police to tell them that I robbed you at gunpoint. The police will then arrest me and make me return the bitcoin to you that I stole. When you call the police after I stole your Bitcoin, are you trusting a centralized authority to decide whether or not the transaction was legitimate? After all, if I check the blockchain, the transaction seems perfectly fine.
Blur and OpenSea, the leading NFT marketplaces, both have measures in place to attempt to stop the sale of stolen NFTs. Should we trust these centralized platforms to decide whether or not a token should be tradable? Should we demand they abolish these theft protections in the name of decentralization?
As long as there exists a state with an authority on violence, Bitcoin being decentralized is a mere technicality. All power comes from the barrel of a gun. If the state wants to take your Bitcoin to pay for another war, they can do so regardless of what the code says by simply having the police knock on your door.
Do you want to abolish the state altogether? If you think all centralized authority is bad, what are your thoughts on the crypto space getting increasingly centralized? What do you think about Yuga Labs buying up other top NFT collections? Should they be allowed to do this and if no, who should stop them? How does Bitcoin solve any of the problems you outlined and do you really think that if the government hadn’t been able to print money, they wouldn’t have found another way to bail the banks out?
If I point a gun to your head and tell you to send me all your bitcoin, you will probably do so, and then you will call the police to tell them that I robbed you at gunpoint. The police will then arrest me and make me return the bitcoin to you that I stole. When you call the police after I stole your Bitcoin, are you trusting a centralized authority to decide whether or not the transaction was legitimate? After all, if I check the blockchain, the transaction seems perfectly fine.
Bitcoin can’t solve theft and has never claimed to. Neither can our existing banking system. Bitcoin can guarantee that money can only be in one place at a time. The only theft Bitcoin can solve is the theft of government’s inflating the money supply and reducing your dollar’s purchasing power. It can change the theft of irresponsiible central banks. That’s it. All a transaction on the blockchain tells you is that the person with that private key can own the money, it doesn’t establish who that person is or should be, the same way if you have $5 USD and spend it at a hot dog cart, the hot dog vendor has no way to know how you acquired that $5 or who the that $5 “should” belong to.
Blur and OpenSea, the leading NFT marketplaces, both have measures in place to attempt to stop the sale of stolen NFTs. Should we trust these centralized platforms to decide whether or not a token should be tradable? Should we demand they abolish these theft protections in the name of decentralization?
I have nothing nice to say about the NFT marketplace or any of the actors in it. NFTs are a joke. Interesting tech but in 99% of cases used for completely garbage purposes. And no, some random startup running a NFT website shouldn’t be in charge of your ownership of your coins or NFTs or anything. Like many things that are bad in crypto, people think Bitcoin = stupid monkey JPG NFTs = Ethereum = Dogecoin. They are all different things but they get painted with the same brush in the media unfortunately.
As long as there exists a state with an authority on violence, Bitcoin being decentralized is a mere technicality. All power comes from the barrel of a gun. If the state wants to take your Bitcoin to pay for another war, they can do so regardless of what the code says by simply having the police knock on your door.
It’s more nuanced than that but, sure. Bitcoin makes it a lot harder. A lot harder. It’s much easier to simply inflate the money supply and spend that money without people’s consent than round up people, point guns at them (or use some other, less direct form of coercion) and tell them to give up their Bitcoin. The state controls the banks, BTC puts you back in control of the economic power those banks hold. Ultimately, if the state asks the bank to turn over your funds, they will, you cannot control that. You can control whether or not to say “no”. If you stick to it, and they kill you, they still do not get your BTC. Let me ask you, if Putin had to send his goons door-to-door in Russia to collect funds for his invasion, don’t you think that reaction from people might be a little different than if Putin just turns on the money printer and slowly eats away the savings of his people? How might the vietnam war have gone differently if not only was there widespread opposition but the government had to double the tax rate or confiscate people’s BTC? Through a particular lens like this, BTC can be a tool for global peace. Wars of aggression are much harder to start without central banks backing them. It does not make war impossible, but it changes the rules of the game and the scales which can be tipped.
Do you want to abolish the state altogether?
No. The state has many important jobs which we currently cannot replicate any other better way like paying for common goods (roads schools etc), providing an imperfect but important check against runaway effects in the capitalist economy (market aggregation leading to monopoly, destruction of the environment for profit, etc). I hope humanity will continue to experiment with, iterate on, and improve what we think the state’s function is and how it should function, just as we should with money and our economy.
If you think all centralized authority is bad, what are your thoughts on the crypto space getting increasingly centralized?
It’s bad, I have no love for centralized digital currencies. Decentralization is key to cryptocurrency being something which enables access to democratic and open markets.
What do you think about Yuga Labs buying up other top NFT collections?
Haven’t heard about this and don’t care about it. NFTs are a joke.
How does Bitcoin solve any of the problems you outlined and do you really think that if the government hadn’t been able to print money, they wouldn’t have found another way to bail the banks out?
#1. I agree the bailouts were necessary given the circumstances. The way they were carried out wasn’t great for example bankers giving themselves massive bonuses with bailout money, but something had to be done to prevent the collapse of the banking system in insert_country_here. The question is how to we avoid getting into those circumstances in the future? Part of the answer is having hard currency. The second you start making promissory notes, lending, and especially allowing the private sector to be involved in lending, you will inevitably end up in situations where banks fail. So the central bank becomes their backstop. But what happens when the central bank fails? This happens. The reality is that anytime you have fractional reserve systems, you run the risk of a bank run. You can have the safest economic policy in the world as I would argue the US is generally seen as having, but there are economic shocks you simply cannot prepare for, and when those happen, you will have bank runs. With BTC, if you hold BTC, you don’t need to worry about that because nobody can print more to bail out unelected, irresponsible bankers for making decisions you had nothing to do with.
#2. If fiat and Bitcoin are to continue to co-exist, I imagine the government would still print their way out of the problem. Or perhaps they would raise taxes. Bitcoin isn’t concerned with how to solve the problems of other economic systems, it’s only concerned with providing a strong, robust currency which it has faithfully done for 15 years.
spoiler
During the bank bailouts, the government just printed a bunch of money and gave it to the banks. They did this because it was politically expedient, well really because they had to or the whole damned system would collapse.
They could have nationalised the banks, had the bankers sent to jailed and prevent commercial banks from gambling with depositor’s money yet they did not because the state under capitalism works on behalf of the monopolists.
Yet the problem is not new, throughout history, every nation that has ever failed, has had their currency end in hyperinflation.
Or could it be that the nations which had economic issues suffered from hyperinflation? Cause and effect etc.
The temptation to print money is too strong.
You do know the Government knows about the consequences. I wonder why Federal Reserve is constantly on about controlling inflation like its their primary goal.
No corruptible, tempted authority could use it to turn on the money printer and rob entire generations of their wealth or force them to pay for wars they did not support.
Is it though? Because there have been various forks of Bitcoin. I think you are not understanding what money is. Money is used its used to reward people for their labor. Capitalists take a part of the productivity of the labor for themselves. This means those with more control over production has a disproportionate control over the resources. Those with more resources can buy ASICs and GPUs to mine more crypto than a homeless person, this will create inequality and the resulting consequences.
He made a currency which cannot be corrupted and cannot be hacked
Yeah I wonder why Bitcoin forks exist and why exchanges and rich coiners get hacked so often. Could it be that there is more to stealing crypto than not being able to manipulate blockchain? Its almost like humans are imperfect and make mistakes.
It is neutral technology open to anybody with a phone or a computer and access to the internet.
And those without a phone, computer or internet can get paid in cash.
99.9% uptime, with instant transfers across borders
Uptime ultimately depends on the reliability of those who run the internet. Lets say someone cut all the fiber links between NA and Europe/Asia, crypto will fail. Its reliability is dependent on real things like network switches, fiber optic cables and routers all of which are imperfect.
You know what else can do instant transfers? PayPal, Card transfers and thousands of instant money transfer systems which exist. Bitcoin meanwhile can take hours to confirm a tx.
Which is much less than you need to open a bank account.
You dont a phone or internet to open bank account. You go to a bank branch fill a form along with an ID, there you have a bank account. Don’t have a bank account? You can get paid in cash
Bitcoin doesn’t care about your credit history.
Neither does most banks. Credit history is for obtaining credit cards and loans, not for opening bank accounts. Its why even children can open their own bank accounts.
or whether or not you can provide a reliable mailing address
Neither does cash. You can also have virtual addresses provided to bank and there are digital banks which don’t even ask for that.
You never have to wait days for a payment to clear
As mentioned earlier, neither does paypal. In fact, paypal and cards are faster than crypto in many cases.
. Bitcoin doesn’t close on weekends and will never charge you exorbitant fees to use your own money.
Neither does internet banking. Bitcoin does charge fees, if you do a tx with zero fees there is a good chance itll never clear.
And it makes sure nobody can print away its value.
And nobody can stop someone from accumulating value in your wonderful utopia.
“crypto bad”
Yes, ghg emissions, no banking insurance, can be stolen very easily, slow and fluctuating value, easy to do price manipulation etc etc
He didn’t stick around to get rich off it, he didn’t use it for celebrity, he just made Bitcoin and disappeared.
Doesn’t he have like over a million bitcoin? Your definition of ‘getting rich off it’ is selling it for real money. If lets say real money didn’t exist, wouldn’t he be the richest person on the planet?
Finally I want to ask, what do you think of age of consent laws?
My only concerns about popular cryptos are whales conquering coins on coins. Technology itself is solid and Satoshi is a god.
Crypto freaks behaving religiously is perhaps one of the most disconcerting and offputting things about crypto so props to you for doing praxis by alienating people with this Satoshi as Jesus Christ our lord and saviour shit. You’re doing good work deterring people from it.
