What did you do for Bitcoin today?
The other day someone tweeted the above question, and it made me wanna write something positive about Bitcoin. ’Cause after all, if I believe in Bitcoin and the underlying philosophy of scarcity and long timeframes, I want to help it succeed.
What’s been bugging my mind though, is the questions whether there aren’t more urgent and trivial matters to support? The war in Yemen for example, or the climate crisis we are inevitably facing, or developing earth’s civilization into a space faring species. And yes, these all are matters of great importance and need our immediate attention. I feel grateful for people like Tilo Jung bringing the Yemen war into view of the German public, or the rebels fighting extinction on our planet brought by apocalyptic climate, and of course Elon Musk who’s making leaps and bounds in conquering outer space.
Yet, I sincerely believe that Bitcoin can positively influence all of the above problems. I think magical internet money will help making our world a better place. Here’s why:
1. Bitcoin is the hardest money ever created. It will ring in a paradigm shift for our global economy that will manifest itself by taking away power from governments and giving it back to the people.
In ten or twenty years from now, when Bitcoin is recognized and used as the world’s reserve currency, it will change the global economy in profound ways. Bitcoin will succeed because there will only ever be 21 Million Bitcoin and those Bitcoins enable censorship resistant, peer-to-peer and push only monetary transactions.
The hard cap on the issuance of Bitcoin will eventually make Bitcoin more scarce than gold, once the blockrewards have been halved for the 4th time in 2024. Hard money will force our economies back to balanced budgets and curb debt financing that is effectively borrowing current growth from future generations. The scarcity of Bitcoin will channel funding into sustainable projects only, that are more likely to bring a return on revenue than we have come to experience in an age of IPOs that focus on market share only, figure out monetization later and burn through VC money in the quest exit scam their way out of sound economics by selling of to unsuspecting retail investors.
The hard cap will also make it very difficult to fund their wars through taxpayer money by simply printing new money to fund their arms and weapons expenditures. If arms producers accept only Bitcoin, or Bitcoin-backed FIAT money, Governments will think twice before engaging in a war that they are unable to tax their citizens for funding. After all, governments will have to compete for their citizens tax money and free market between the best models of governance. If governments are unable to confiscate your push-only Bitcoin with the click of a button at the central banks computer, they have to incentivize citizens to pay their taxes for the services they provide and the promises they actually deliver on. While executive powers such as the police and the military will remain in power of law & order, Bitcoin certainly hands some of the budgeting power into the hands of the people.
2. Bitcoin is part of our transition from the industrial age into the information age. The internet has introduced us to a wealth of information and new ways of organizing society. Bitcoin will be the backbone of our civilization in which information is money.
Our species has developed from wandering foragers to settling farmers, who eventually invented the steam machine and kicked of the industrial age. Since the 1990s we’re indisputably changing our civilizations again and entering a 4th age. The information age is connecting us to ideas on a global scale within seconds and enables us to access the knowledge of the humankind at the click of a button. Within the next two or three decades physical work will be replaced entirely through automation and robots. What is already and will only become more valuable is the information shared, stored and accessed on the internet. This infrastructure of knowledge will be supported by a peer to peer money that enables us to make micro-transactions across space and time at the speed of light. In an economy of shared use and shared ownership, the only thing that we will care to move around with us freely is our knowledge and experience as well as our money. Bank accounts, gold deposits in swiss locker boxes, and national payment systems will have to be a thing of the past when you, me and the rest of our civilization embarks on a path of enlightenment aided by the internet.
3. Bitcoin fosters a high time preference thinking, and therefore gives us back sanity. Bitcoins scarcity and issuance rate will curb unbridled deficit spending and funnel investments towards sustainable projects that are greater than the sum of their parts.
Shopping is not a hobby, and future generations will be better off not spending their hard earned sats in the mall or on ‘stuff’ at Amazon. Since the last Bitcoin will be mined in roughly 120 years from now, with the issuance rate decreasing by half every four years, there will be more gold than Bitcoin mined, in USD value, sometime in the next 10 - 20 years. While Bitcoins stock-to-flow ratio currently sits at the levels of silver, just 8 years later this ratio will be higher than that of gold and make it the most scarce monetary unit humans have ever invented. People will eventually discover Bitcoin for themselves as it is uniquely secure, resilient and temper-proof. Bitcoin is a hedge for gold and silver. Countries with negative interest rates such as in Europe, Japan and soon the US, will hedge into Bitcoin to ensure their reserves retain their value in a global competition of inflating currencies. Yes, countries with predatory governments such as Venezuela, China, Iran, Turkey will also charge into Bitcoin as a means of escaping international sanctions. Escaping US-controlled ‘international’ organizations such as the World Bank, International Monetary Fund, Bank for International Settlements and World Trade Organization has to be the goal of emerging countries opposing the hegemony of the US government. Free riding on this accelerated adoption will be billionaires and millionaires hedging against quantitative easing, as well as institutional investors discovering the best performing asset of last 10 years. While this is great for all current hodlers of Bitcoin, it will equally have massive ramifications on how all of us do business today. Fractional reserve banking, debt spending, and negative interest rates will be a thing of the past, incentivizing us to focus our ambition and investments on long term projects. Ideally Bitcoin is helping our societies to vain off from the consumerists drug aka. shopping and steer our attention and money towards the development of meaningful inventions that have net-positive benefit for us as individuals and civil groups over a long time horizon.
4. Bitcoin is the energy-buyer of last resort, incentivizing the use of energy sources that would otherwise have been lost. In the quest for more efficient ways to mine bitcoin, Bitcoin is set to help humanity reach the goal of becoming a Kardeshev Type I energy civilization, removing restrictions on energy growth and raising the standard of living for everyone.
Bitcoin mining is already deployed as an energy preserving tool at oil fields in the middle east, at hydropower generators in Canada and China and at fracking wells in the US. Excess energy that cannot be stored or consumed otherwise is geared towards mining Bitcoin, securing the network and giving the energy producers a last chance of monetizing their energy resources. The quest of miners to find ever more efficient and cheaper sources of energy will propel research in production and research, enabling our civilization to store and use all of earths energy. Bitcoin will then act not only as one of the greatest distributor of wealth in our society, but will also level availability of energy resources for everyone and making our human organizations this much more scientific, as being based on cryptography and mathematics.
Bitcoin ultimately is the strongest equalizing weapon citizens can use to take power from governments rooted in theocracy and mono-culturalism. Peer-to-peer, free-speech money that cannot be seized or destroyed will benefit a multicultural and multi-polar world in which the greatest achievements ahead of us lie in sustainability and prosperity on a planetary scale.