This is the fifth chapter of “the Gift of Bitcoin” – a world-class Bitcoin education sent to recipients of Bitcoin gifts sent with GiveBitcoin.
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- When a government recklessly prints fiat currency, it is basically stealing from the hard-earned savings of regular people. Bitcoin gives us hope for a better future.
- if you know your money will hold onto its value, you’re less likely to spend it right away and more likely to save for the future.
- If we want free societies, we need to give people control over their money and data.
- Bitcoin will lead us into a world where it’s much harder for governments to control citizens.
- Bitcoin is a tool to help the most vulnerable around the world, people who lack bank accounts.
In the previous chapter, you learned how Bitcoin is related to a concept called “Time Preference.” In this chapter, we’ll explain how Bitcoin is a source of optimism.
The lesson only takes ~15 minutes to read. You can also listen to the lesson if you prefer audio content.
Chapter 5: The Optimism of Bitcoin
How is money depressing right now?
Right now, our productivity is being robbed from us slowly as governments print more and more money. When a government recklessly prints fiat currency, it is basically stealing from the hard-earned savings of regular people.
Since Nixon took the U.S. dollar off the gold standard in 1971, worker’s wages and benefits have flatlined while our productivity has continued to grow at the same pace. It’s heartbreaking! Fortunately we have an alternative option, Bitcoin, that gives us hope for a better future.
We can sense that there’s something unfair about our money, but it’s hard to grasp until we look at charts like these.
How can Bitcoin make one more hopeful?
At first glance, it does seem strange that the nature of our money could affect us in such a deep way. However, if we look closer, we see that money is a pervasive force in our lives. Money is half of every transaction; on one side is a good or service and on the other side is a payment. The nature of our money has a subtle yet profound effect on us.
We’ve discussed how the nature of money can affect our time preference already. If you know your money is losing value over time, you’re more likely to spend it sooner than later. But if you know your money will hold onto its value, you’re less likely to spend it right away and more likely to save for the future. That’s energizing.
“Money changes how we look at time. If the money that I use is like a hot potato and it’s going to be worth nothing tomorrow, then my intention and my incentive is to spend it as soon as I can. But when you hold Bitcoin and you’re about to spend money on something, you really think about it. Like, is it better if I spend this money or is it better if I put this money in Bitcoin and just wait? When you have money that holds its value (or goes up in value), you have an incentive to wait and spend it only on things that you really need.”
-Yan Pritzker, author of Inventing Bitcoin
The fundamental difference in the nature of Bitcoin versus fiat money, like the US Dollar, can actually change the way we think and act.
“Bitcoin is very much a corrective to the consumerist culture that we live in. You’re more interested in acquiring more of it, saving it, and spending less day to day. Generally speaking, it’s better for people to be thinking about the future and future generations. And I think Bitcoin really does a really good job of getting people to think that way instead of “I want to spend right now, to satisfy myself immediately.”
-Alex Gladstein, Chief Strategy Officer at the Human Rights Foundation
Can Bitcoin really change lives?
If you took a survey of Bitcoiners and asked them this question, you’d find many will tell you that as they started investing in Bitcoin, their time preference lowered and they started thinking more about their future.
“Bitcoin has made me become a little bit more cognizant about my future and what I’m trying to aim for over the longer term. And it’s been great to watch a lot of people come along on that journey as well.”
Stories like this are told over and over again on Twitter, podcasts, articles and books by Bitcoiners who have experienced this effect on their lives first hand. It’s one of the most surprising outcomes of adopting a new money that functions the way money should.
“Bitcoin has changed my life. I have become more cognizant of saving and more thoughtful about my future and my present. I have become more disciplined and grown healthier and more productive because of that discipline. I have more self respect because of all these things. What’s amazing is these changes are brought about simply by the truth of sound money. Sound money gives us a basic economic incentive to think longer term. And from that simple change comes these follow-on effects on your life.”
-Brady Swenson, Citizen Bitcoin host
What impact will Bitcoin have on society at large?
The cumulative effects of these individual changes could change our overall society. Imagine a world where people, by holding money that gains purchasing power over time, are enabled to pursue and perfect their craft. When money loses purchasing power over time, we are forced to work more for relatively less pay over time. When money maintains (or even increases in) purchasing power, we are able to work less and spend more time on our true passions. Less ditch digging means more time to spend on the stuff we actually care about.
We’ve had periods of time throughout history where a gold standard was maintained for long stretches. Those eras are generally known now as “golden ages” or eras when middle class standards of living steadily improved. But the problem is that gold is susceptible to control by central authorities. And if money can be controlled, it will be eventually; when central authorities control money, they inevitably begin printing more of it. (This is also referred to as debasing the money, to diminish the value of money by creating more of it by decree.) Golden eras usually end with the co-opting and debasing of sound money.
However, Bitcoin’s decentralized design makes it essentially impossible for any one entity to control it. Bitcoin separates money from state meaning golden ages can persist and sustain. It also means Bitcoin acts as a check on government power.
“With Bitcoin, we’re going to see a world where governments are smaller, more nimble, and more accountable.”
Bitcoin shifts the equation. Everyone in society, including governments, will have to provide real, lasting value.
“War, for instance, becomes a much harder sell when the only money governments are allowed to spend is the money that was actually collected in taxes. Bitcoin should usher in an era of peace and cooperation on a global scale.”
-Cory Klippsten, Founder of Swan Bitcoin
Will Bitcoin impact people in the developing world too?
If we want free societies, we need to give people control over their money and data. In China, for example, the Communist Party is forcing people to use WeChat or Alipay giving them easy surveillance and control over people’s money and data. Bitcoin is a counterweight to this approach. It lets people control their own money and be their own bank.
In developed countries this may not seem important, but it’s crucial for people living under regimes which 1) print fiat currency (e.g. Iran, Zimbabwe, and Venezuela) where savings evaporate easily or 2) control the entire banking system (e.g. China, Saudi Arabia, and Russia). Bitcoin will lead us into a world where it’s much harder for governments to control citizens.
“If we didn’t have Bitcoin, we’d really be screwed. There really wouldn’t really be a way out of this impending surveillance system and this impending centralization of power and wealth. Thankfully, the rise of Bitcoin makes me very optimistic and very excited about the future.”
-Alex Gladstein, Chief Strategy Officer at the Human Rights Foundation
So Bitcoin isn’t just for wealthy people?
Bitcoin is a tool to help the most vulnerable around the world, people who lack bank accounts. Anyone can receive Bitcoin; people shut out of the financial system can now receive money from anyone else in the world, quickly, cheaply, and without needing to ask permission, prove an identity, or risk a government seizing it.
This will have a major impact on humanitarian aid. Charities will no longer need to deal with the dictators who rule the world’s poorest people. We’ll be able to give help directly to those who need it. That’s why we’re seeing increased usage in authoritarian societies around the world. It’s a real gift for people in Belarus, Venezuela, Kazakhstan, Egypt, the Philippines, Nigeria, Turkey, Venezuela, or Palestine, and many other places. More and more, these people are turning to Bitcoin.
“It gives a much more positive spin on the direction that the world can go, knowing that there is this alternative system that we can lean towards. If it actually fulfills its goal, it will be a better world. Being a Bitcoiner and believing that it’s the future of money is an extremely optimistic and positive mindset. Politics is just going to keep on doing what it’s doing. Politicians are going to keep doing what they’re doing. We have a Republican president, the debt goes up. A Democratic president, the debt goes up. You just kind of lose interest because you see that it’s not going to make as big of a difference as what will happen as a result of the adoption and development of Bitcoin. It’s much more significant than anything that’s going on in politics.”
-Michael Caras, author of Bitcoin Money
Why Bitcoin Matters for Freedom (Time magazine)
Bitcoin Money: A Tale of Bitville Discovering Good Money by Michael Caras
Let’s wrap up
That concludes Chapter 5: The Optimism of Bitcoin.
In Chapter 6 we’ll discuss common misconceptions of Bitcoin.
Comment below with ONE thing you learned from today’s lesson, or one question you’d like answered. We’d love to hear from you!