In a Cashless Society Bitcoin is the Last Bastion for [financial] Freedom
[…] Cryptocurrencies offer the potential for choices to be made in a realm long dominated by government monopolies––the realm of money. F&D issue
Does anyone ask about the origin of money? What is its purpose? We use it every day without questioning its value, its system, and its technology. To understand the concept of money, it is good to ask yourself some existential questions about it. When was the emergence of money? What problems has it solved and what is the role it needs to fulfill in today’s society? Is it the same role? Should it keep evolving?
A bit of Money History.
Without money, we would still be swapping eggs for oranges and berries for bread. Money makes prices easy to compare. Rather than expressing prices as ratios - where each good is “priced in terms of all other goods - they are expressed in money.
So, money helps us to pay for goods and compare prices cause they are expressed in the same unit — a currency. Sounds obvious but it took some time for societies to introduce the concept of money and move on from barter.
Per definition, [sound] money needs to fulfill 3 functions: a medium of exchange, a store of value, and a unit of account. These aspects explain the economic concept of money as commodity money.
Per L. Bylund in his book “How to Think About the Economy” says:
“Money serves as an intermediary that facilitates trade that elevates us above the limitations of barter trade.”
In history, different types of things were money in different times and societies: rocks, seashells, salt, paper, etc. Each form of money was relevant precisely during the time it was created (which the video below explains extremely well and funnily).
From Gold to paper money
By now you probably know about the FIAT currency system. Basically, the “cash” we use to pay for goods and services, is a receipt of the money we are storing in the bank (which once upon a time was gold). So the bank sells us space to store our money and in exchange gives us a receipt (paper money) to pay with. Several major problems emerged with time:
Although the increasingly tougher regulation, banks have been pretty bad a keeping the accounting right and have been many times caught printing more receipts than the money they hold ;
In these modern times, most monies are national monopoly currencies issued by the government’s central banks and have no backing (no more gold to back our cash). So the problem that emerges is that central banks have the power to issue more money (see Quantitative Easing) hence affecting the purchasing power as prices tend to increase: prices inflation.
Without mentioning the loss of sovereignty over our money, the theft or hack risks, or bankruptcy in case of a bank run (see Silicon Valley Bank for more on that), lack of transparency, etc …
Every day, Citizens worldwide are facing these major problems as their governments debase their currency and banks embezzle people’s wealth. However, this is not the worse as the worse is about to come and this will be a game-changer in our society.
The future is digital, and so is Money.
Money must have been the most impacted concept by technology since the beginning of its existence. The representation of Money has indeed followed closely the technological breakthrough.
In the digital age, money has become imperceptible. Convenient one would say. But convenience comes at a cost.
For quite some time, the digital currency has been progressing. The latest technologies aim to make finance more democratic and expand access to financial offerings. A significant objective is to attain less expensive, immediate domestic and international transactions. Though the concept seems simple, the future seems bleak to me because numerous entities with varying interests have much to gain or lose. As a crucial means of transferring value, money is essential for our economies and societies.
The Finance & Development issue (here below) takes us on a tour of existing and emerging forms of digital money and looks at the implications for finance, monetary policy, international capital flows—even the organization of societies. This issue helped me understand how the leaders of our world are approaching this transition from paper currencies to digital currencies and the implications it will have in our life. We are about to be asked to choose between the red and the blue pill and no matter which decision you make; a line will divide our civilization.
Money Revolution vs Freedom Devolution
The IMF issue is a great read to learn about the upcoming options as we are deepening into cashless hence freedomless societies (cause whatever you think, cash is freedom!) However, as an institution backed by governments and central banks, IMF’s perspective is seriously skewed toward the virtues of Central Bank Digital Currency.
Although some contributors highlight the risks related to CBDC, such as privacy intrusion (see Carstens mindset), risk of centralized point of failure, and overall lack of money management expertise, governments are counter-attacking by using the same risks repainted as virtues. CBDC in their mouth will benefit and protect citizens against terrorism, money crimes, tax evasion, currency erosion, etc.
No matter what the justification is, money should be neutral and controlled by no one. Governments controlling money is sinful. And they’ve been trying for a long time with very disappointing results.
Indeed, history has reminded us that countless previous “masters” have tried to control and impose their own money. It goes back to ancient China and paper money. Although historians are not sure which exact dynasty started it, in The History of Paper Money, Chinese scholar Mr. Klaproth, suggests that Venetian Marco Polo was the first to mention in Europe the creation of Paper Money which was used during the period of Mongols, masters of China. He was astonished how Genghis Khan’s grandson Kublai Khan introduced his paper money:
However, there is no such thing as sound centralized money. The tendency is to forget the 3 fundamental pillars mentioned earlier. In addition to these 3 key pillars, money should also be neutral, permissionless, inclusive, borderless, and hard. (As usage and civilizations evolve, money must even tick additional boxes see table below)). Unfortunately, a lot of boxes that CBDC, does not thick precisely when it comes to privacy and freedom to transact and use your money as it pleases.
So what’s the solution?
With the emergence of central banks and the modern monetary system, it is undeniable that the world has entered a more devious monopolization of money. The irrational hyper-financialization methods mislaid the essence of it by serving the interest of a few mighty, as opposed to the general population. The consequences are becoming more and more flagrant, social division and inequalities, deepening financial gaps, and other dramatic signals that remind the premise of previous civilizations’ collapse. Despite their potential dangers and controversy, governments are likely to introduce CBDCs soon, and it is incumbent upon individuals to reject them. Using alternative forms of money like physical gold and silver or creating a parallel financial system are some ways to opt out of CBDCs' dystopian control.
As mentioned in Zero Hedge’s article the good news is, there are five steps anyone can take to opt-out of this terrible system.
Step #1: Use Physical Gold and Silver
Step #2: Obtain Financial Sovereignty With Bitcoin
Step #3: Get Organized Locally
Step #4: Exchange Value for Value
Step #5: Become a Prepper
Among these essentially inconvenient propositions, Bitcoin stands out as it comes in as the most effective, convenient, and soundest money in a cashless society controlled by governments and their CBDCs. Bitcoin is THE decentralized digital currency that operates independently of any central authority, providing users with complete control over their funds and transactions. It is built on a secure, transparent, and immutable blockchain, making it resistant to censorship, fraud, and manipulation.
Bitcoin offers a number of benefits over CBDCs, including greater privacy, security, and transparency. With Bitcoin, users can transact anonymously and privately (even if this is not the priority for everyone) , without the need for intermediaries or permission from any central authority. Furthermore, Bitcoin's decentralization means that it is resistant to government control, making it a sound store of value and a reliable medium of payment.
In conclusion, while cash has enabled us to move money freely, the move towards a cashless society controlled by governments and their CBDCs raises significant concerns about financial privacy and individual freedom. Bitcoin represents a clear solution and the soundest money in the digital era, offering greater privacy, security, and transparency than CBDCs, while also providing users with complete control over their funds and transactions. The last bastion for financial freedom. So now, that you are equipped which pill will you pick?
Thanks for reading
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