Bitcoin and me: How?
Published on 07/18/2021 01:32 PM
This article was written by @OtterBTC on Twitter and originally published here: https://otterbtc.medium.com/bitcoin-and-me-how-64fc2358b830
“You know something is happening, but you don’t know what it is… do you, Mr. Jones?” — Bob Dylan.
They say that asking “why?” is unspiritual. Instead, you should ask “how?”. Whether or not that works for your current mental framework, I’ll let you decide. Here’s my go, with a bit of backstory first. (I’ll get to bitcoin after a few paragraphs).
Instead of asking, why am I an alcoholic? I prefer to ask how. As in, how did I become as hopeless as I once was and then how did I miraculously, slowly, progress to where I am today? What were the actions that I took, the motivations for those actions, and the destructive patterns that arose and shaped the incentive structure for my reality? Most importantly, now that I am years into recovery and free of the bondage of active addiction, I constantly have to ask, what am I doing to continue to live freely in this new way? What will I do, what actions will I take, through service, self care, and human communion to continue on this more enlightened path?
I’ve stopped caring about why I became an alcoholic. The laundry list of causes looks the same for many of us. I started with a family, genetics, and some circumstances and all of that was just a roll of the dice. What’s important to me is how I reacted to all of that and how I continue to react to life today.
I was often motivated by fear before sobriety. Today I have to be on alert for when a fearful story pops up in my head. “Some of the worst things in my life, never even happened” — Mark Twain.
My alcoholism is clearer to me now, but what I’ve discovered more recently is that I didn’t know I had another addiction: to fiat money.
I’m the “bitcoin guy” in my group of family and friends. Random conversations and text threads about current events regularly end up with me inserting a casual and sometimes not so casual, “Bitcoin fixes this” or, “Better buy some more bitcoin”, “Good job on cutting out those costs… More bitcoin.”
When my brother sends me an article about how meat prices are skyrocketing and another about how lumber costs are going through the roof, I can’t help that after some exchange I inevitably conclude my assessment with: “It’s all a signal. Put your time and energy in something that can best store value across space and time — buy more bitcoin.”
Some people get it. To a degree they understand that things are changing. Fissures in the status quo are becoming more pronounced. Weird noise is broadcast across the social media landscape. The new normal that is upon us comes like a slow moving tide. It is cunning in its advance, but often leaps forward overnight and some days it can feel like you’ve awakened to a new world. These leaps are easy to hide in the noise. Trillion dollar spending packages have been and are being deployed by governments around the world. Where is this money coming from? Central banks and governments work together to create it. Most of it is credit or debt creation, which is just a less understood way of money printing. The effect ends up being the same as it has always been. The people closest to the faucet suck up most of the new money. They hold it for security, lend it out with interest, borrow against it or use it to buy truly scarce resources and assets. It’s the same game with most of the same insiders, but the scale has grown.
It should be noted that it hasn’t always been this way. Fiat money is a currency that is backed by a government, rather than some real commodity, such as gold. Its legitimacy is dependent upon the trust and faith that market participants place in the government or country who issues it. The US dollar is the world reserve fiat money. This current fiat experiment that the world is operating on is barely 50 years old. This role that the dollar plays will not hold forever into perpetuity. Entropy, or nature’s constant shift into disorder, will guarantee it. Nothing stays in order forever. Thankfully we have a new monetary order that is emerging and it was specifically designed to root out and improve upon the problems brought about by government-issued money.
Enter Bitcoin, a monetary network that is accessible to anyone in the world at any time, with no gatekeepers, intermediaries, or central points of failure. The record of its transaction log is immutable and auditable by anyone. The supply of the asset is fixed. The issuance is awarded to those that expend their time and energy, the amount won commensurate with how much of their resources they expend. The disbursement of it is true trickle-down economics as those who have acquired it through provable work and energy expenditure, choose to sell it for other currencies, goods, or services. This, in turn, enriches and compensates those that offer such goods and services, in exchange for their time and energy spent. To quote Michael Saylor, bitcoin is “engineered money”. It is a monetary network with rules but no rulers and is resistant to corruption by human fear and greed.
How did I get into Bitcoin? I was at the right place at the right time. I had experienced enough to be open to it. I had watched my parents get into debt, then bankruptcy, then divorce, then homelessness. I had experienced my own moral degradation and recovery. In 2016, a friend tossed me an old quarter and said it was made of silver. I had no idea. I quickly wanted to know about money. I soon found bitcoin.
Through this journey, I’ve come to understand money as an information tool. It can be thought of as an information tool that enables people to be accurately (or inaccurately) compensated for their time and energy. The fact that more units of the most pervasive information tool in the world, the US dollar, can be arbitrarily produced at the whim of relatively few individuals, has never bode well for the majority. Money touches everything. Chaotic and shapeshifting money leaves everything it touches in an abyss of misinformation.
Most people go about their lives while never deeply questioning what their finite time on this planet is worth, let alone questioning the money they accept for their time and who controls it. When some entity can create money instead of work for it, they are stealing your time. This is inflation. It is a stealth tax on your wealth. When central bankers and governments decide to put more money into the system, it makes the pie bigger and makes your slice of the pie smaller. You thought the pie would stay the same size or at the most grow as humanity grew, that your work and sacrifice would let you climb the ladder and acquire more of the pie for yourself and your loved ones. Instead, you are subconsciously and often overtly incentivized to spend your money the moment you get it. You are ever in fear that the prices of the things you want will go up. In your lifetime, prices of desirable and scarce things have always gone up.
Because of the rapid advancement of technology, prices of some things have stabilized or even gone down. Purchasers of TVs, printers, and other mass produced electronics have been happy to see the deflationary effects of technology. These items have gotten bigger and better and in many cases, less expensive. Big item expenditures such as housing, healthcare, and automobiles have, on the whole, gone up, and gone up A LOT in desirable locations around the world. Asset price inflation is where we see the most insidious effects of government and central bank intervention and money printing. More dollars sloshing around the market and demand consistently rising makes the price of desirable assets go up.
Unfortunately, disenfranchised and financially illiterate people are the ones who get left behind. They are usually unaware of the rules of this game and the fact that having wealth gives you access to borrow money at close to zero percentage interest, where you can in turn buy the scarce assets and reap the benefits of inflation. Most people never get out of the doldrums of lower and middle class, as they live paycheck to paycheck. In this pervasive case, it is common for people to live in debt. In debt to a system that holds an imaginary prize, the American dream, freedom, in front of them, just out of reach. America may be the best country in the world, but the pursuit of life, liberty, and happiness gets increasingly harder the more you are beholden to debt.
The system has had to move to a debt based economy because of central bank and government led intervention in capital markets. Who among the average citizenry has three hundred, or seven hundred thousand dollars at hand to buy a house? Unless we are born into this world with money, we have to get into debt to acquire the big things we want. Very few who begin with nothing, acquire the know-how and learn the tricks to work the system to their advantage.
We are operating in a debt based economy that acts very much like a chronic alcoholic/addict. We get increasingly into more debt, individually and collectively, and in order to service these debts, the powers that be would rather print more money to pay them off instead of raising taxes and practicing austerity. With the alcoholic/addict, abstinence is painful. If the world were to transition to a more sustainable monetary system, it would almost certainly come with pains too.
It is an unpopular decision in the nervous system when all of the sudden you deprive it of the substance it has relied on. The populace is one big nervous system and we have been living on debt and cheap money in an arguably unsustainable way. When an alcoholic/addict decides to get clean and sober and cut themselves off from the destructive behavior and substances they have been relying on, it can seem catastrophic for them. And in many cases they need to be medically assisted in their detox or the process can be fatal. After the dust settles and their body is no longer dependent on the chemicals, the real work usually begins.
There are many ways to get free from active alcoholism/addiction. Call it a psychic change, practicing contrary action, or substituting destructive behavior with constructive behavior and interpersonal relationships — the point is that new measures, habits and behaviors need to be established to take the overwhelming place that alcoholism/addiction once held. The incentive for the individual alcoholic/addict to get sober is freedom from the disease. When they achieve this, they reap the benefits. Family and friends usually benefit enormously as well. Communities and society as a whole benefit from this.
Now let’s look at the incentives for the administrators of a monetary system. Central bankers and governments — what are their incentives to administer a new, more fair monetary system? I’d argue that they have no incentive to level the playing field and bring up the disenfranchised — those most affected by modern inflationary monetary policy. Even if the mobs came for them — they have money and the means to get away. They have been living off the fat of the land. Why would they change the current structure? They privatize the gains and socialize the losses. Their decision making is based on high time preference (short term goals) and self interested policy. In their world, rules change at their whim and they know how to act beforehand in order to come out on top.
Fear once ruled my life. Fear of taking chances. Fear of self expression. Fear and inaction toward love to avoid being hurt. Fear and inaction toward success to avoid the pain of failure. I found a way out through recovery and accessed the fundamental behavioral change necessary. I also found bitcoin along the way. Recovery and bitcoin align well. Self-sovereignty and taking responsibility for your actions are one in the same. Honest self-appraisal by taking a hard look at incentives and motivations helps me stay true to a more principled life based on honesty, open-mindedness, and willingness. I also must be of service to those that desire positive change in their lives, in order for me to feel that I have some tangible purpose. Helping the next suffering alcoholic in the way that I have been helped gives me purpose. Helping the next sovereign individual grasp and develop an understanding of a brilliant alternative to government backed money helps give me purpose too.
Bitcoin is an asset as well as a network that features a transparent monetary system, wherein provable work is rewarded with wealth creation, in a way that actually motivates innovation. I am abstinent from drugs and alcohol in the same way that I hope to one day be abstinent from participating in and in consequence, perpetuating, a crooked economically structured world. Government mandated, pay-your-taxes-in-it, crooked money that is excessively pervasive, leads to the degradation of the health and spirit of a society. Drugs and alcohol, done in excess, leads to the degradation of the health and spirit of the individual.
If we are to recover from the ills of wasteful consumerism, re-election seeking, bought-and-paid for government officials, and the unsustainable dependencies we as a society have on the cheapest goods and labor, we must adopt better money by which to use as the conduit for change. Bitcoin fixes this.
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