It seems that many people don’t understand why cryptocurrencies are here to stay and will eventually take over the banking system. One supposedly enlightened person on Facebook even said that he didn’t think that I understood that I haven’t backed up my arguments logically. Well I plan to lay it out here in more detail so the rest of you who have doubts will be able to see what I see more clearly.
First let me say that I was skeptical myself of bitcoin when I first heard about it. I’m not exactly sure when I first heard about bitcoin. I seem to remember encountering that option around 2010 when I was searching for e-commerce payment solutions for my software business, but thought bitcoin was just another “Paypal”.
The next time I remember much more clearly, when in Oct 2015, William Stickevers recommended looking into Coinbase. I almost signed up right then, but I got distracted and forgot about it being heavily involved in my own software project Delphic Oracle XPF. The turning point wasn’t until I finally finished that project at the end of 2016 and started reading outside of my narrow field of interest again.
I actually bought my first bitcoin on Feb 14, 2017 through Coinbase. At the time the price was barely over $1000. BTW, people seem to have this misconception that you have to buy a whole bitcoin. I only bought $50 worth on that date and shortly afterwards I read the Satoshi Nakamoto white paper and that changed everything. Having more than 2 decades experience in running my own software company and writing code, I was primed perfectly for that paper.
That was when I realized that it was much more than just money. What Satoshi did was take the trend that has been happening with computers putting some people and industries out of work and focused it into a trend that would put authority out of work. He did this by solving the byzantine generals problem which for centuries was only solvable using a central authority, but he found a way to solve the problem of achieving consensus without the use of a central authority.
This technology goes by different names such as “blockchain”, “decentralization”, “technical disintermediation”, etc, but there’s actually about 6 underlying technologies that make this work (elliptic curve cryptography, blockchain encumbrances, some variation of Proof of Work, PoS, DPoS, public and private keys, SHA-256, etc…).
In the past, digital currencies have been tried. The NSA was actually working on this in the 1990’s and there were such ideas as digicash which made the mistake of central control that quickly got stomped out by authorities. Authority doesn’t like anyone cutting in on its monopoly of issuing currency, so when sovereign entities whose source of power comes from the issuance of their own currency see a non-sovereign competitor, they stomp it out by finding out who’s in charge and threatening those creators of competing currency with lawsuits, jail time, etc…
So when bitcoin showed up on the scene in January 2009, it was a very small group of cypherpunks led by an anonymous creator (Satoshi Nakamoto) who released the code as open source software that anyone can run. It flew under the radar for quite a while until Wikileaks finally put the currency on the map of authority when Wikileaks credit card access was denied and it started accepting bitcoin for payments, ironically making an Ecuadorian embassy imprisoned Julian Assange very rich with no place to spend it.
The problem for authority is that there’s no central authority running bitcoin itself. No authority to shut down. What bitcoin did was hold authority hostage to the benefits of losing the internet and Swift Network that the banking system uses. So for authority to shut down this technology it will have to commit technical suicide and go back to the days of paper book keeping. I’m old enough to remember those days, so I know authority thinks it might be able to use the “internet kill switch”. However, once government does that, they’re dealing with much bigger problems. For one thing, in Philadelphia, there were near riots when welfare recipients lost use of their EBT cards.
The devils bargain that authority made was to accept this new technology, warts and all, because if they don’t, they lose all of the progress that they’ve made over the past 3 generations or so. So what alternative do they have? They will of course focus on the exchanges like Coinbase that do have people in charge and have KYC (Know Your Customer) and AML (Anti Money Laundering) which violate the decentralization principles of Satoshi Nakamoto. Bottom line is that shutting down the internet creates more problems than it solves.
The naysayers often cite the awesome power of government to punish those within their borders. Of course that will happen. At some point governments around the world will make use of cryptocurrencies illegal. This has in fact already happened in a number of places. Historical precedent shows what happens when a government does this. There hasn’t been a single instance where making a currency illegal saved that nations currency. In fact the opposite happens…
(source - Andreas Antonopoulos)
This is known as Gresham’s law in economics. The problem for authority is that the police have to be paid in the legal currency which is of course worth less than the illegal currency. As that nations currency value plummets due to hyper inflation, the cops can’t survive and do their job with the legal currency so they end up being forced to be criminals themselves by accepting bribes in the illegal money to survive.
The authorities who signed their names on the law of course are completely aware of what comes next, so they watch for police accepting bribes and then the police are forced to bribe the judges, then the judges are forced to bribe the politicians and on it goes all the way to the top until the ones holding the most of the “illegal” currency are the ones who signed their names on the law.
Bitcoin was made possible because authority created a massive equity drain through printing up and running government under the concept of “unlimited money”. Limited money would have made it much harder for bitcoin to gain traction.
(source - Stefan Molyneux)
The biggest drains on the economy created in the last 20 years are due largely to the Iraq war (and other wars). Governments instead of asking the people for permission, just metaphorically crank up the printing press. First Bush 43 raided Social Security and stuck an IOU into that trust fund (effectively causing seniors to be taxed twice for the same benefits), then later on in 2008 after the banking crisis, “quantitative easing” (aka counterfeiting by approval) caused the value of the dollar to collapse albeit slowly because it’s the world’s reserve currency causing this to happen...
(Google images - Wikimedia Commons)
When you have multiple currencies operating side by side, you end up with currency wars and in the end the ones with the superior store of value, medium of exchange, and unit of account are the ones that prevail. The numbers currently favor the underbanked and unbanked which number about 5.5 billion people. They are the ones who will use cryptocurrency and cause its widespread adoption. The growth of that internet world economy will eventually swallow all nation state currencies because nation state currency is limited by jurisdictional borders whereas the “internet of money” is borderless, censorship resistant, open source, and decentralized.
Some have said that nation states will not allow you to put your money into the system. I expect that to happen too. But you’ve got to remember that by then, the value of that currency will be minimal. Those of us who are already not using national fiat and accept payment in crypto from those who already have it by providing services will be the new economy. Those old currencies are promises by a government that is going to fade away and all most of the 3rd world has left is their time, energy and ability to work for crypto using a cell phone and MyCelium wallet. It’s already happening.
So the protocol can’t be stopped without the governments of the world committing suicide, what’s left to be done? Well authority will of course get nasty and violent when they see their death approaching. I almost feel sorry for them because they never really had control but fell into the illusion of control and behaved badly because of it.
They did lots of immoral and unethical things to prop up their power. Will they be rational about being checkmated? Probably not. They will probably go all the way to forcing the black player to make that move that takes the king off the board instead of that king gracefully lying down sideways on the chess board. We didn't start that fight, but we will finish it.
Will the result be bad? Lots of people seem to think so. Of course anyone dependent on the system for anything will be hurting for a while, but longer term this will likely be the best result for humanity. It’s not easy to see how much better things can be until the parasites are driven out of the system. This is not going to happen over night either. We’re looking at a change here that will take at least a generation to complete.
The question is whether the 1.5 billion banked will be able to hold back the other 5.5 billion. Maybe they can for a while. Americans will of course be the last to understand and jump on board because they have full banking privileges. We may be in for a digital panopticon for a while because authority has made the mistake of using biometrics directly instead of using biocryptics. This can delay adoption for a while, but it can’t last for the reasons stated in that video.
Authority will leave a massive wake of destruction that will have to be cleaned up by those of us who understand decentralization and the future will likely look similar to this proposal.
Donations (public bitcoin address):
3FwxQsa7gmQ7c1GXJyvDTqmT6CM3mMEgcv
