What is Freedom?
In my mind, it is the ability to not be arbitrarily or unilaterally affected by the choices or decisions of other people or parties. So how free are you?
The typical response I receive to that question is ‘very’
The reality is far more nuanced and fraught with qualifications
Sure, you have $1,000 in your bank, a flight to Paris costs $1,000 and you could hop on a plane and start a new life in France tomorrow — ignoring the complexities of international Visas and legally staying in another country.
Which is true and in that respect you are free.
But, what if your government decides to print more money and devalue the capital deposited in your bank account? What if for every dollar each person has your countries central bank decided to mint 20¢ for themselves?
That flight now costs $1,200 while you’re money in the bank remains the same. You can no longer go because your ability to control your fate is dictated by the economic decisions of the government of the country you live in. Central banks control our destiny far more than we care to admit.
The answer that credible, democratically elected Governments wouldn’t do this has been rendered moot by the frequency of times this has happened in Western countries in the last decade, not to mention the prevailing two centuries. Quantitative easing is a fancy way of saying the Government took from our pockets to bail out banks and ensure the economy didn’t collapse.
Yet trust in money — as if it is something other than a collective belief in the myth that it has value, by a lot of people — persists. There is still widespread misunderstanding on what money actually is. The number of people who I’ve spoken to in the last 5 years who falsely believe the value of any currency is underpinned by any commodity or asset sits at ~90%. That figure spans hundreds of conversations, a large proportion of whom should know better.
Want to know the quickest way to defeat your bias towards assuming ‘experts’ (particularly within the domain in which they are considered global leaders) understand the basic fundamentals of the world we live in? Read up on what the fractional reserve is, understand the implications on business models that can ever be profitable within the framework of existing banking regulations, and ask a few of these people the most pertinent questions that spring to mind
The answers are truly astounding. The fear — and it can only be ccharacterizedas that — which individuals operating within the handcuffs of the traditional financial world feel is because they can’t understand the level of innovation and change that is about to occur. It’s so foreign — individuals being in fiduciary control of their own finances, not contributing to banks leveraging deposits to increase their ability to make loans — that the only thing that makes sense to do is to lash out. Banking purposefully deploys obfuscating terms that make it impossible to navigate for the uninitiated. At risk of sounding overly simplistic, credit derivative swaps are a pretentious way of saying insurance, while ‘Synthetic CDO’s’ is an egotistical way of explaining that you don’t actually know what you are talking about. This is rife in high finance and enables a few to maintain a monopoly over the many, acting as intermediaries to scrape their 2–3% off almost every transaction made globally. The fear comes from the knowledge this is going to end very soon.
That said, this isn’t the underlying cause of Bitcoin rising to reserve currency status. The truth is, the majority of people are not ready to become their own bank — nor are they likely to ever want to be. Managing private keys on a hardware wallet is so foreign that custodial services will emerge at scale. People are happy to accept intermediaries as a cost for ‘doing business’ or the convenience of having a bank. Banking likely survives and becomes a utility backend who we never need to know provides the services we need. Many of their processes will be upgraded and replaced with decentralized systems and protocols which lower the marginal costs of all banking services to near $0.
It is the animosity and suspicion of other governments globally which will lead to a situation where a decentralized currency is the only adequate and universally point of agreement that will enable progress. We are already beginning to see this now, as the US ramps up its trade war with China, this is likely to become even more clear. Bitcoin already remains stable as volatility rocks public markets. This is a clear indication of trust — and as huge multinationals likely Microsoft commit to using the Bitcoin Blockchain as an enterprise solution this is going to become even more obvious.
That is the simple view, from a simple person, self-educated on these things out of a fascination for where the pucks going, not where it’s been. As I try to make sense of an inconceivable volume of information, the conclusions that become clear are relatively straightforward. Who do you trust most, yourself, decentralized owners of a fully transparent system that is immutable, or the opposite? Outwith that, debate proves pointless. It’s a personal decision based on what you think is best for you.
The more nuanced view is that the dollar’s position as the global reserve currency gives it undue influence and control over global events. Erode that and certain things which are considered universal truths of the world we are used to inhabiting in the West no longer apply. The Petro Dollar goes the way of the dinosaurs and Bitcoin is the most likely solution.
Spending a little time looking from alternative global perspectives and that view has hardened even more.