The Bitcoin (BTC) Power Shift – Oswaldo Lairet
Just as the individual control of fire radically changed the balance of power between humans and nature, individual control of the creation, transfer & storage of value, shifts the balance of power between ordinary humans & rules-based agency.
Throughout history, the human groups that discovered better ways of harnessing Energy Conversion (i.e. fossil fuels) or better technologies to maximize the extraction of value from it (i.e. electricity) have become dominant over the rest. Nothing new here, except to emphasize that Energy-to-Value conversion efficiency confers a crucial RCD [1] advantage among humans. Understanding that Bitcoin is a way of maximizing the extraction of value from energy versus living standards, explains why societies that allow individuals to independently access, store, exchange/transfer their private contribution to economic value, will eventually rule. In the case of Bitcoin, among other reasons, these two stand out:
Bitcoin’s power to turn energy into a scarce and immutable unit of account, via a self-sustained process, fueled by network-effects and game theory dynamics [2] beyond human control, brings a paradigm shift in the way society represents, owns, transfers, exchanges, and stores value.
In other words, by subtracting human control from our civilization’s fictional money concept, Bitcoin prevents bureaucrats from seizing and allocating value according to their own interest. Over time, as ordinary citizens begin owning and allocating their wealth as they see fit, individual merit and entrepreneurship will regain control of the economy, as they did under capitalism until the early 20th century, when Monetary Central Planning replaced it. This is evident just from looking at Venezuela, for instance, a country where Keynesianism’s most popular private-property confiscation tools (currency, and interest-rate manipulation) were expressly expanded to hasten the process of embezzling the country’s yearly productivity, plus all excess economic-value (savings) citizens and private entities had accumulated over decades. Yet, as Bitcoin arrived, guess which country came to have the 4th largest Bitcoin trading volume by December 2018?
Only an Immutable [3], Non-Systemic, Individually Controlled currency (Bitcoin) can efficiently replace Monetary Central Planning.
If using Venezuela to hypothesize the “absurdum” in a simple Reductio ad absurdum argument is enough to prove what Keynesianism has done globally, over the last 50 years, it is even easier to understand why Bitcoin’s dominance will spread, as global citizens realize that its rather primitive design (compared to the multiple advantages of blockchain garbage) is the only safe way for them to control the:
- Economic value-added, they contribute,
- Excess value-added they have accumulated over their lifetime, and
- Access of their own productivity on-tap, regardless of how badly greedy bureaucrats want to confiscate it.
[1] RCD (Resource Competition Dynamics) within the context explained here -in the summary’s opinion note.
[2] Bitcoin makes it increasingly costlier to confirm invalid ledger-entries than confirming valid ones, by giving away to miners, part of the value generated by network effects coming from its growing grid of nodes. Over time, whether its price increases or not, grid-growth funds a growing asymmetry between the cost of hacking its ledger and the cost of validating it. Additionally, having no physical entity to intimidate, legally or physically, increases the likelihood of its perpetuity.
[3] Systemic decentralization lies at the crux of any self-sustaining process. Yet, as has been shown over the years, no other currency (crypto or not) has the potential to amass the massive amount of it that Bitcoin has already gathered.
Published at Fri, 30 Aug 2019 20:20:43 +0000
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