TL;DR
Money is a profound, life-altering concept that serves as a tool for moving economic value across space and time. The current fiat central banking system is inherently flawed and destructive, as it allows those who print new money to benefit at the expense of everyone else. Bitcoin offers a decentralized, fixed-supply alternative that has the potential to fix the broken monetary system and change the world for the better.
The Problem with Central Banking
The current central banking system, which is used in most countries worldwide, is fundamentally broken and destructive to society. When one group of people can produce new units of currency that can be used to obtain goods, while another group doesn’t get access to that currency until much later, it results in an asymmetric transfer of wealth from the poor to the rich. This is the opposite of Robin Hood—it’s stealing from the poor and giving to the rich.
Central banking is inherently evil because it violates the principle of private property, which is the central pillar of civilization. By printing money, central banks are engaging in systematic stealing and deception, which corrupts everything in society. People are incentivized to borrow and spend rather than save and produce, leading to a debt-ridden and fragile world.
The Importance of Sound Money
Money is a tool for moving economic value across space and time. It serves three primary functions: store of value, medium of exchange, and unit of account. For money to fulfill these functions effectively, it must possess five key properties: durability, divisibility, scarcity, portability, and recognizability.
Throughout history, gold has been the best form of money because it exhibits these properties better than any other commodity. However, gold lacks portability, which led to the creation of gold-backed currencies. The problem with gold-backed currencies is that they introduce a middleman (the banker) who can engage in fractional reserve banking and debase the currency.
The Brilliance of Bitcoin
Bitcoin is a profound innovation that solves the problems of both physical commodities and fiat currencies. It is the first fixed-supply asset in human history, with a maximum supply of 21 million coins that cannot be altered under any circumstances. This makes Bitcoin perfect for transmitting economic value across time.
Additionally, Bitcoin is purely digital and can be transmitted peer-to-peer without intermediaries, making it perfect for transmitting economic value across space. It is decentralized, meaning no individual or group has disproportionate influence over its development or rules.
Bitcoin is not just another cryptocurrency—it is in a league of its own. Other “shitcoins” are more like startup companies with a heavy tendency towards being scams. They don’t hold a candle to Bitcoin in terms of its potential to become global money.
The Transformative Power of Bitcoin
Engaging with Bitcoin tends to make people better savers and more focused on timeless values like health, family, and community. It lowers time preference, encouraging people to think long-term and pursue meaningful goals.
The meaning of life is helping people, whether by being a good parent or building valuable businesses that solve problems. Bitcoin aligns with this purpose by fixing the broken monetary system and enabling people to preserve and transmit value across time and space.
Thank you for reading “Bitcoin: The Antidote to Central Banking’s Poison“.
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Sources:
- Hayek, F. A. (1976). Denationalisation of Money: The Argument Refined. London: Institute of Economic Affairs.
- Menger, C. (1892). On the Origins of Money. Economic Journal, 2(6), 239-255.
- Ammous, S. (2018). The Bitcoin Standard: The Decentralized Alternative to Central Banking. Hoboken, New Jersey: John Wiley & Sons.
- Breedlove, R. (2020-present). The “What is Money?” Show [Podcast]. https://whatismoneypodcast.com/
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