This is an opinion editorial Ryan Bansal, a professional software engineer and author of the Bitcoin newsletter.
“Computers can be used as a tool to liberate and protect people rather than to control them.” — Hal Finney
Technologies are just enhancers, not arbiters of morality. Extrapolating from the above quote, there is reason to claim that any technique can be either a tool for tyranny or for liberty, depending on which power is at the lever.
The principle of checks and balances suggests that in any system that relies on concentrated power, that central institution becomes a honeypot for malicious actors. Also, keep in mind the democratic principle that more distributed decision making is stronger and fairer for any given society. So it seems unsurprising that the best way forward is to develop and adopt technologies without any ultimate power levers?
Having said that, let’s now talk about one of the most important technologies: money. In the evolution of monetary technology from barter systems to the Seychelles to metal coins to gold-backed banknotes and now a centrally-bank-controlled fiat digital currency, electricity distribution has gone from being more decentralized to more centralized to the point where governments are Managed to establish a tremendous monopoly on money.
Now, I think it’s a fairly uncontroversial statement to say: the government corrupts whatever it touches. Sure, the convenience of digital money is unmatched, but it is also important to understand its flip side, i.e., counterparty risk, which means the need to rely on a custody provider to secure your assets – given the fact As well as the historical track the record of maintaining this trust is not good.
Although fortunately or unfortunately, recently this breach of contract has become more widespread and open. Take for example a developed democratic country like Canada, freezing the bank accounts of its citizens to protest the COVID-19 restrictions or a country like Russia on people trying to withdraw their money after invading its neighbor. banning. In a world that runs on purely physical cash, it would be impossible to execute such a power to unconstitutionally infringe private property rights.
In addition to worsening financial censorship and geopolitical sanctions – which is a relatively recent phenomenon now that money has become almost entirely digital – the corruption and its problems stemming from the advent of fiat money go back as far as 1971. what do i mean? Index funds use a plethora of metrics to measure the health of the economy such as the price-income ratio, the Gini index for wealth inequality, the consumer price index for inflation and cost of living, the ratio of income growth versus productivity growth, the individual homeownership rate can do. And many others have all gone bad ever since then-President Richard Nixon decided to move away from the gold standard.
If you haven’t anticipated governments’ next move by now, allow me to introduce you to central bank digital currencies (CBDCs). Think how bad today’s digital money is? Now imagine what would happen even if it was programmable?
You can say goodbye to any last bit of financial autonomy. Before we know it, we, like Chinese citizens, will be in a surveillance situation with social credit scores. If you’ve seen politicians trying to put a positive spin on them by randomly throwing buzzwords like “blockchain,” go back to the top of this article and read the first line again.
The problems the government creates can be talked about for a long time, but let’s move on to the solution: how to take control of money out of the hands of politicians and give it back to citizens?
“I don’t believe we’ll have good money again before we get it out of the hands of governments.” — Frederick Hayek
Imagine if our monetary system had the privacy and autonomy of cash; the convenience of being instantly and digitally transferable all over the world; By maintaining gold assets at all times, that is, no one can steal your purchasing power over time simply by manipulating its supply to serve their perverse political incentives?
Furthermore, what if it was also running on an open-source codebase and using a public database to make it globally accessible, completely transparent and completely auditable by anyone? Plus, what if it gives anyone with an internet connection and computer the ability to weigh in on their monetary policy?
Finally, what if the proposed system was also decentralized in such a way that the lack of a single point of failure or any central authority makes it impossible for anyone to stop, control or corrupt?
Sounds like a monetary technique on steroids, doesn’t it? Well, in 2008, a solution to these problems was proposed by someone using the pseudonym of Satoshi Nakamoto. I would also like to highlight that it didn’t just come out of the blue, it has been in the making ever since central bankers took control of money. More precisely, it took nearly 40 years of research and several unsuccessful attempts to engineer this masterpiece. The following scene is more tangible:
I would like to conclude by reiterating that the notion of separation of wealth from the state may sound radical to you at first, but in reality it is not. As I mentioned earlier, the monetary techniques we have used throughout our history are more outside the control of the state than current fiat money. One way or another, the state managed to capture them. Gold is the best example of a non-sovereign asset that people used as money for the longest time, but it had obvious attack vectors in the form of various physical limitations, i.e. difficult to store, difficult to secure, and difficult to transfer. Difficult.
Historically speaking, there has been a tug of war between legal and non-government money. Therefore, the real issue at hand is not the “if” money will detract from government control, but rather the “when”. With bitcoin, I think that moment is finally here.
Now clearly if this article has not managed to fully explain to you how bitcoin was designed to be a truly democratic and inclusive monetary system and if you still insist on calling it a scam, So I hope you at least consider it something worth taking. look hard.
This is a guest post by Ryan Bansal. The opinions expressed are solely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.