Introduction

Over the last several years I have worked on this body of articles in an attempt to create a cohesive Theory of Bitcoin. Here is my abstract:

The Internet is a sovereign territory that exist outside and above the control of all state governments. Due to the international nature, and economic dependence that all states have on the internet; the internet has now become a spectre that is beyond any of their control. This combine with the imperious nature of bitcoin forms a new kind of money and power that can render the state useless. This power can supplant state institutions, and allow for all people of the world to economically and politically unite in 21st century, but only if we struggle to make it so. Using the internet and bitcoin we can create an international digital sydicate that will allow for the free economic and information exchange of all people around the globe as a single political body.

I have divided my writings into three (I, II, III) distinct sections. Part one explores the legal history of money; part two covers the economic functions of bitcoin; and part three covers the radical political, social, and economic ramifications of bitcoin.

Part One

This rather long section is of necessity to understand what exactly money is and how it functions from a legal and historical standpoint. There is a long and complicated legal and economic history of money and we must have some understanding of it in order to see how money is a distinct and separate object from value. We must understand that legal power over a long history has literally striped the intrinsic value from money, and replaced it with a false idol of fiat money. This is a form of theft that is only possible through legal means. This has allowed for all States to steal from their citizenry with great sophistication and guile through their alliance with the bankers. It has been over the course of several generations that money has ever-so-slowly lost its power as an intrinsic vehicle for wealth, and been enshrined in the legalist framework of state-capitalism. It is through the State’s monopolization of the mode of exchange–money itself–which has allowed for the State to divorced fiat money from intrinsic value. This in turn has created the great number of economic issues we face today.

To divorce intrinsic value from money itself is an incredible feat for the state; however, it is not without its problems. The state can only monopolize money through force and ideology, not majesty or science. States will always be unsuccessful with the monopolization of money, and history can testify to that.

This is where understanding the mechanics of bitcoin becomes extremely important. Because of bitcoin’s known, fixed monetary supply, infinite divisibility, and imperious security through cryptography; bitcoin becomes something much more than just money, wealth, or value. Bitcoin creates a totally independent, stateless system of economic and information exchange that is pseudonymous over the internet. This is extraordinarily revolutionary, as it creates the basis for a new economic system built on top of cryptography outside of the mortality and corruption of law. This will usher in an epochal change that happens only a few times each millennial!

Once we understand the mechanics of bitcoin we can see that it is truly digital gold. And just like gold, it will be impossible to eradicate from the world. However, there is one feature that dramatically separates bitcoin from that of other commodity monies: its non-physical nature.

The power of the non-physical nature of bitcoin eludes to what I have taken to calling The Digital Sovereign. This is the real power of the internet to affect and change society from without, as a sovereign force. It is with bitcoin that the internet has an economic mode for itself. This economic mode is what will start to radicalize the internet on a whole. When the internet sees the true power that lies within it to change the world, how it can do it with its own money, there will be nothing to stop it.

Part Two

Section two mainly covers the economic functions of bitcoin. First we will explain the mathematical and cryptographic features that make bitcoin provably better money than any money that exist today. We will go into detailed analysis of the features of good moneys, and how bitcoin exudes and embodies all of those ideals in the most scientific manner. This will allow for us to go into a detailed analysis of current system of fiat monetary exchange as a commodity itself. This commodity is the network that is money. Through treating fiat money in this way, we can directly contrast and analysis it against bitcoin.

It is from this lens that we can drive a wedge between the value of money itself as a network, from the value of the legal force embedded within that money. This is explained in the first section in regards to bonitas intresica, and valors imporium. Once we can see all money as being only a network of exchange, than we can see how that network operates both inside and outside of the hands of governments, and their limited economic control.

When we take classic economic theories such as Grehmsham’s Law, Course’s Transaction Theory, and the works of Keynes, Gesell, Hayak, and combine them with the tenets of anarchism, we are given a radical new understanding of bitcoin. It is once we understand how bitcoin functions economically, and why it is superior to other forms of money, that bitcoin shows itself to be the technological tour-de-force that it is.

Finally, taking Schumpeter’s theory of creative destruction, we can see laid out before us the radical and revolutionary technological power that bitcoin will use to change the world. This is not an opinion, but a fact of economic function. This is given to us by Hayak, who offers us a glimpse into the future with liberated money. In his magnis opus “The Denationalization of Money,” he describes how a world of competitive, non-state currencies would work, and how it can answer the economic and political crises of today.

With the application of understanding bitcoin as a commodity money, we can apply classic banking practices within bitcoin to create a new form of money through transparent fractional banking. This will be the model that will allow bitcoin to become the rails of the financial system, and for bitcoin to build its own debt-based units. This will spell the doom of the contemporary banking and monetary system.

This new form of money is the bridge to the future, and is the core nexus of the ideological development that will be the next epoch of humanity: The Digital Sovereign. It will be the answer to how humans are going to solve all of the monumental and heart-wrenching issues that plague our world today. With the historical and economic ramifications of bitcoin explained from the first two sections, we can now go into the third and most important of the three sections: The political power of bitcoin.

Part Three

Bitcoin is not about money at all… it is about our core values of human-beings and what it means to be free people. Freedom is a condition and identity that is acknowledge through condition alone, and today we are not free, but we can be. Through organizing around the use of bitcoin for ALL of our economic exchange and holding of bitcoin as a form of economic resistance, we can exert true political pressure on a corrupt system through economic means. If just 1% of the world’s population would be militant enough to use bitcoin in this way, as a revolutionary tool to help people organize against the machine, it would be but a week before the system started to seize, and less than a month before it were in cataclysmic turmoil.

This is the power of revolutionary syndicalism on a transglobal scale; we can use the internet and bitcoin to organize ourselves and achieve revolutionary ends. We can organize politically, independent of one another, while having economic solitary together against our respective governments.  Using bitcoin as an economic weapon against the corrupt state-capitalist machine to which we all belong, we can realistically create dramatic change in our world. Pulling from the historic traditions of anarchism, we can ultimately organize around the theory of the general strike. This will cause for a complete collapse of the State-capitalism as we know it so we may transition to a new way forward.

This is only possible if we proactively start building towards a better tomorrow now! We must do this through the formation of a revolutionary political union, and advocate from this seemingly radical stance. Through the use of the internet as an ideological tool, we will create a new class consciousness. This class consciousness will fully contain and represent the international proletariate through the ability of all people everywhere to use, interact and organize with the internet itself; and to use bitcoin as the economic vehicle to bring about change.

Next Section: Sovereign Violence and Legitimacy of Law

Bitcoin is a Commodity Money

We have discussed several different ways in which bitcoin creates an intrinsic value for itself. We also have discussed the absolute value that cryptography offers, and how States conjure up fiat money through legal violence via valor impositus, rather than creating money with real bonitas intrinseca value of metals that are coined. Now that we have an understanding of the above concepts, we can discuss how bitcoin is a commodity money, made from rare unique bits of data that create the whole cohesive framework that makes up bitcoin.

Satoshium

For this post I am going to pretend that bitcoins are real coins that are minted from a new metal called Satoshium. This metal is ugly, has few uses, and cannot be physically touched, as it is invisible–overall it is pretty useless. However this new metal is very, very divisible, malleable and it can be transported over any digital communication channel. All Satoshium that will ever comes into existence is created through the coinbase reward that ‘mints’ bitcoin units, which happens during the process of ‘bitcoin mining’.

The reason for the fictionalizing this alloy Satoshium is several fold:

1) To elaborate on the very important distinction between the legal creation of currency out of nothing, and how that is different from the minting of coins which must gain their value from the material the coins are made from. This is the distinction of legal tender under the force of law (valor impositus) and the nominal value states creates out of thin air (the expansion of the money supply), verses natural (bonitas intrinseca) money, which derives its value from no enforcement, or organization of men; but from the intrinsic use-value the object possess in-itself. This is seen most frequently with precious metals, but also with objects of use value like cigarettes.

2) Bitcoins can be used for much more than just money. When bitcoin units are creatively destroyed (proof-of-burn, colored coins, etc) it is similar to the melting down coins to use the metal for something more useful. Contracts, identity, transparent taxation, autonomous agents, etc. can all be created from Satoshium, or the outright destruction of bitcoin units.

3) Bitcoin is really a several dynamic systems working together (payment, identity, proof-of-existence, ownership, PGP system, etc) each with their own purpose. This is in addition to the fact that ‘bitcoins’–what one could think of as the cassacious coin, and I refer to as ‘bitcoin units’–is separate from owning a bitcoin address with no money in it.

Today we shall cover only the first item, and discuss how the bits of data that create the individual bitcoins have their own unique values that are not found within in the laws of men, but the laws of math.

Satoshium Mining

bitcoin monetary base

bitcoin monetary base

Let us think of Satoshium similar to gold or silver, with a few notable exceptions. Satoshium is rarer than gold; with only 2,100 trillion units (0.00000001 BTC–the smallest bitcoin unit, ‘a satoshi’) of Satoshium that can ever exist. Today there are about 1,350 trillion units of Satoshium that have been discovered through the ‘Satoshium mining’ process. More and more people are mining everyday with better, and better mining equipment–which is making it harder for current miners to find the mining reward. We will comeback to how bitcoins are ‘minted’ from satoshium using the coinbase reward process later in this post.

Another unique trait about satoshium is that it has a very, very steady inflation rate. For every 10 minutes of satoshium mining that is done on the bitcoin network (combining all of the mining power that everyone is using to find satoshium–be it 9 computers, or 9 billion) there are 5 billion units of satoshium discovered. After the first 4 years of mining, this amount was reduced by 1/2, to 2.5 billion units for the same 10 minute block of total work by the network. This amount will continue to divide in half every 4 years until there are no more units to be divided, which will be somewhere around 2138. Today there is much less satoshium available for mining than there was even just a few years ago–this is similar to the real deflation that metals, like gold, silver, and platinum experience over time, as they also have a finite supply.

Satoshium mining has become very difficult because so much mining energy is competing for these limited number of bitcoin units; the little guy can no longer mine satoshium on their own–it is simply too hard. This would be like trying to mine for gold with only a pick and shovel, while the guy next to you has a gold mining operation–you are not going to win. To resolve this, people discovered that if they ‘pool’ their work, everyone can share in the reward of satoshium mining based upon how much work they are doing for the bitcoin network.

The Minting of Bit-coins

Satoshium is really the coinbase reward, which is the raw material that bitcoins are minted from (fun fact, the only way you can truly destroy a bitcoin is through not claiming the full coinbase reward). In the same manner that gold is just a hunk of metal before it is minted into a coin; so is satoshium is to bitcoin. When someone is rewarded for satoshium mining, those satoshium units are grouped into chunks of 100 million units and ‘minted’ single bitcoin. This is the coinbase reward process. This ‘mints’ satoshium units into bitcoins based upon what the block reward is at that time, and pays that reward of new coins out to a new bitcoin address. This is the ‘minting’ process and how the bitcoin network creates new bitcoins.

Though each bitcoin is created equally, the data that comprises of each individual bitcoin is unique and different. Each bitcoin addresses has unique identifying properties, that differentiate each individual bitcoin to their owners, but to no one else. This is similar to the serial number that is unique to each dollar bill. This means that the history of that particular bitcoin (or subdivisions of that bitcoin) can be tracked, and can only be spent when the 53-digit unique hexadecimal private key authorizes its movement. If properly secured, it is impossible to ‘hack’ a bitcoin address and take the money from that address; as only the private key will be able to move it. This is why there are several bitcoin addresses that have tens of millions of dollars in them, and not a single one has been hacked.

The mining process is also what ensures that there are no ‘double-spend’ attacks. In lay-terms, a double-spend attack is similar to check-kiting, where one spending the balance in checking account twice before the bank can check to make sure the funds are there. We won’t go into details about this right now, but just be aware that the mining process also acts as the gatekeepers to the transference of funds, and offers mathematical assurance that no coins can be stolen, or double-spent.

The Money Supply of Bitcoin

The reason for us fictionalizing the metal Satoshium is to make clear the distinction between fiat currency that are made from nothing, and commodity money which must derive their value from an object’s intrinsic worth–the value is found in the money itself, not vice-versa. A fiat currency is a scrips certificate of exchange issued from a central bank. The scrip itself (such as a $20 bill) is just worthless paper–there is no bonitas intrinseca about it. An infinite number of these scrips can be created, as their values are created and set by the dollar accounting system controlled by the Third Bank of the United States (also known as The Fed–a misleading term that I hate). Each one of these scrips can be redeemed for goods and services for the nominal value printed on it, because it is legal tender–one must accept fiat money in exchange for goods or services. If not, you will face the wrath of the law.

Historically, once could exchange the nominal value of these worthless papers for a precise measure of commodity money, such as gold or silver. However, fiat currency no longer has any sort of value backing them–since 1973 they have been free-floating. Governments are now free to print as much money as the like, which they are happily doing. This is because there has been a low level currency war going on since 2008, and it is starting to intensify. This means that while there still is a finite, natural supply of all physical objects; there now is twice as much money (in the case of the US) that can purchase those same objects.

This is how governments expand the money supply to create inflation. This bleeds the value of the hard-earned savings of common people, in order to further enrich the current ruling class. All people in all nations are now facing these political calamities that will make us all economic casualties.

Velocity of Money

Velocity of USD

When more units of a currency are injected into circulation, this causes for a total number of units within the system to increase. If the velocity of money were normal today, this would mean that the prices of everything would double over night–but it has not. This is because the velocity of money is at historic lows, at less than 1/2 of what it normally is. This is not a mistake, but a response to the QE of the FED.

Let us compare this to how bitcoins are ‘minted’. Bitcoins derive their value from the bonitas intrinseca, the real economic work that has been preformed in the Satoshium mining process, and the use-value that Satoshium has. Each and ever single bitcoin in existence must have came from a coinbase reward–there is no other way to create bitcoins. In order to create the coinbase reward, real computational work that takes real energy–no different from the energy used to dig gold from the ground–must be preformed.

With Satoshium mining, this ‘work’ is done in the form of solving very, very, very complex mathematic problems that secure the network from ever being corrupted. This gives each bitcoin unit equal, market-based value due to the fact that it cost real-time energy to produce bitcoin today. There is no way to modify the number of bitcoin units that can be created (unlike fiat money), as bitcoins can only come from the coinbase reward, and that is hardcoded into bitcoin. This ensures all bitcoiners that no one can ever just change the supply of bitcoin in the way the US can, or any other central bank can for their currency (I’m looking at you Japan and EU).

Bitcoin as a Currency

Money can be held here and proven that it exist

This is a public bitcoin address. If you have the private key for this address you can control the money there.

For us to understand bitcoin as a currency, let us think of bitcoin paper wallet for the moment. This is a piece of paper that has the private key of a bitcoin address printed on it. When one inputs the private key of that address into a bitcoin client, they can access, and transfer the bitcoin found in that addresses. This is a currency bill in the most fundamental sense of the word; as it is not that piece of paper that has any value, but what it represents. What has value is the private key, as that can access the bitcoin–not the paper itself. The paper has only exchange value, not use-value. This is how banking classically existed for centuries with banking bills representing some value of gold until the 1973, when the dollar dropped its peg to gold.

Although bitcoin is called a digital currency, that is a bit of a misnomer. Bitcoin is not a currency but a commodity-money. Bitcoins must come from the coinbase reward process, and that process can only be done through the electrical labor of mining. Thus, like physical coins, a bitcoin can only be created when the correct ‘bits’ are ‘minted’ into bitcoins. Bitcoins cannot just be created willy-nilly–real computational work must be done, and real energy expended to mint bitcoins.

This is why we have differentiated the creation of bitcoin units from that of Satoshium mining. If we are to mint coins, physical or otherwise, we must have something to mint, we cannot make coins from nothing! And this is the very place that commodity monies are different from fiat money–fiat money does not represent anything other than the law, whereas bitcoins ARE something–very special data sets verified by the bitcoin network.

Bitcoin is a Commodity Money

gold-silver-bitcoinBitcoin is a commodity money because the cryptography that bitcoin is built on top of. This has created the contract that limits the supply of bitcoin units and protects the bitcoin payment network. It is cryptography that creates the immutable and fungibility of bitcoin units and the imperium of the bitcoin network. This immutability creates a use-value for bitcoin, which also creates its exchange value. Furthermore, the ‘satoshium’ units of bitcoin can be broken down and used for all sort of other various contractual functions. By understanding bitcoin as a commodity money, we can see the true value that bitcoin has is outside of the legal constructs of the state.

The internet now has money that is loyal to no political body, or statist organizations; but to digital ideals alone. This is not just the economic base of a new epoch, but a political one as well. Bitcoin is the economic praxis that will allow for humans to create a new class consciousness. We can use the internet to help us create a new society, and we can use bitcoin as the economic mode to create that new world.

Bitcoin is not about money, and has nothing to do with money. Bitcoin is about political power, sovereignty, and the freedom of economic exchange. This is in direct and antagonistic relations to any and all states. Bitcoin seeks to destroy the old institutions of political power, and replace them with new digitized, decentralized ones.

Once people start to see and reject the corrupt and worthless scrips of the states, there is going to be a great unraveling unlike anything we have seen before. The crisis will collapse the value of all fiat money to becoming nearly worthless, and the value of cryptocurrencies will explode. There will be chaos, and there will be anarchy–but these are the conditions of creative destruction that we must have in order to rebuild something better in place of this corrupt and wicked system called state capitalism. 

Next: Bitcoin and The History of Money

Bitcoin and The History of Money

To understand Bitcoin, we need to also understand the history of money. This is a long and complex topic that has changed dramatically over the last 400 years, and has a total history of more than 3000 years. In order to understand both money, and bitcoin, we need to understand that there are two distinct functions that money has, that are independent of each other, but both influences money’s value: the payment function of money, and its storage of value function.

Both of these features have important functions for money, but it is important to understand how each one of these affect money differently. I cover this in more detail in what is the intrinsic value of bitcoin, and bitcoin as commodity money.

The best way to think of it is that bitcoin is a threat to both common storage of value; such as precious metals like gold and silver, but it is also a threat to normal fiat money because of the bitcoin payment network. These two features of bitcoin create one type of money that is superior to both precious metals and fiat currencies. To understand why bitcoin works as money, we need to understand the history of money over the last century.

The History of Banking

To understand banking, we need to know what is a mode of exchange, how did it come about, and why it was needed in addition to a storage of value.

A mode of exchange is just that, a mode in which you can engage in the exchange of one good for another. Before modern money, this could be anything that was commonly exchanged, and the value was well understood by the general public. Throughout history, this has been everything including bushels of wheat, tobacco, land, etc. As long as both parties understood the value of what was being exchanged and chose to accept it, it could function as a mode of exchange.

As gold became the common standard for exchange during the mercantilism era, there became substantial risk in carrying large amounts of precious metals. Instead of carrying around a brick of gold, people could carry around notes that were redeemable at banks for the same amount of gold as the note. This is how banking has been practiced for most of its existence. It has only been in the last century that fiat paper money with no convertibility to a commodity has become the norm.

It is substantially important to understand that fiat money came about to represent an actual storage of value to make real payments. The only reason fiat money ever did come about is because it was a technological innovation that was fiat money. To be able to spend the value of gold, but carry it around in a lighter paper form what a huge technological development that fundamentally changed how exchange was preformed. This allowed for people to continue commerce in the same ways as before, but now with their wealth from the threat of theft.

Ironically, the creation of banking notes that can be redeemed for a storage of value also created the needed framework for the current system of fractional reserve banking that all states use today. This created a kind of banking system where banks no longer operated on how much money they have available, but they operate on only a fraction of the total they should have available. Banks use this system to cheat their profits by using the multiplier effect to multiply their profits–and their losses. These losses can become so substantial that it can destroy the entire banking system and economy. This is what happened during the Great Depression, and more recently during the 2008 meltdown.

The Bretton Woods Era

near the end of WWII, the allies came together in secret meeting in Bretton Woods to negotiate how the new global economy would be built. Keynes wanted an International Clearing Union which would use a fair international banking currency based off of trade deficits called the Bancor. This became the official position of the UK when negotiating at the BW conference.

Keynes’ idea was rejected (despite its popularity), and instead the dollar was to replace the international currency unit, which today gives the U.S. a special power in international finance call exorbitant privilege. To do this, $35 was set as the redeemable price for one ounce of gold (almost twice what it was worth when it was seized from U.S. Citizens back in 1933), and what would become the IMF was setup. Keynes understood the huge issues this would create in international monetary system, and offered incredible insight to how this would play out 20 years later.

This system would have worked, if the U.S. was not cheating on their balance of payments. From 1945 to 1971 more and more U.S. dollars started circulating around the globe because the U.S. was importing more than they were exporting–creating a negative balance of payments. In fact, so many dollars were exported like this that the U.S. could not cover all of the outstanding gold that the dollars represented. The French were suspicious of this in the 1960s and started to repatriate their gold, which led to Nixon shock. In 1969, Nixon announced that the dollar was no longer convertible to gold, and created a 10%  tariff to protect american industries from the shock of this. $35 was no longer worth an ounce of gold–it was worth nothing.

Nixon Shock

In order to make sure that the dollar did not enter into a death spiral of hyperinflation, Nixon as put in place tariffs, wage freezes, and a fixed exchange rate until he figured out what to do to give the dollar value. In 1973, Henry Kissinger struck a deal with the Saudi King. In exchange for arming and supporting the Saudis and their brutality domestically, they would agree to sell oil in only U.S. Dollars. This created the ‘petrodollar‘ which propped up the value of the dollar now that it was no longer exchangeable. So from 1973 on, the dollar was no longer worth gold, but oil.

Nearly thirty years later we can see the evidence of how decoupling the dollar from gold has shattered faith in the global monetary system and the dollar. This had huge consequences for the purchasing power of the dollar and everyone who used it. Below is a chart of the purchasing power of the dollar since 1970–today the dollar of 1970 can only purchase $0.18 of goods today–it lost more than 4/5th of its purchasing power in just 45 years.

 

The Theft of The World

Now that money was no longer tied to the actual value of commodities and is free-floating, it became possible for the theft of the productive capacity of not just entire nations, but the world itself through the monopolization of money by state governments. Slowly over decades, inflation simply caused for the slipping purchasing power of not only the dollar, but all fiat currencies. This was done so slowly and deliberately that few could understand what Keynes had warned people of so many years before:

“Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

–JMK, The Economic Consequences of the Peace (1919)

Today the inflation that we face is not due to new gold being introduced to the fractional-reserve banking system, but from the value of the dollar simply decreasing.  Today there are more dollars in the world today than yesterday due to quantitative easing (i.e. making more dollars). The decrease in the purchasing power of the dollar is a direct loss to you and everyone using the dollar; and a direct gain for the government and banks who benefit from the creation of new dollars. We have been told that these are good men, and that they will use monetary policy to create price stability and keeping unemployment low, but the facts show something much different and much more insidious. 

Failure of Gold as a Storage of Wealth

Gold has been used as a storage of wealth for millennia because of the total fungible nature of gold. However, what happened from the start of the 20th century, to the end of WWII, was a consolidation of gold in the hands of the State through legal confiscation and violence. By 1973, almost all gold was in the hands of the state through force and theft.

This was done in two distinct ways. There was state-to-state confiscation of gold and precious metals, such as the reparations from WWI and imperialism. This concentrated gold in the global north in the hands of a small number of elite bankers and business magnates. The other way was through the war that governments carried out against the private wealth of their own citizens.

This can be seen throughout the world with the restrictive legislation from states around the globe; such as Executive Order 6102, The Australian Banking Act 1959, and the Indian Gold (Control) Act 1968Instead of protecting citizens from the tyranny of wealth seizures, holding gold actually made people a target for the state. Through this violent seizure of wealth, governments essentially gained an oligopoly on gold. This allowed for governments and their allies in banking to manipulate the price of gold through holding or dumping; but more importunately, they have rendered gold meaningless as a source of payment and storage of value. Today, almost no one will take your gold or silver as payment, despite the fact it truly is worth more than paper money.

The Need for Protection From The State

It should be obvious that the greatest threat to ones personal wealth is not some foreign or personal aggressor, but the State itself. This puts us in a predicament because the State is the owner of the means of exchange, and the arbitrator of all legality. Through controlling the means of exchange, the State can manipulate the value of the dollar on a large scale for its own benefit (such as quantitative easing or unlimited funding for war), while also being the gatekeeper of the finance system. The greatest issue with this is that even if you find a suitable alternative means of exchange (like bitcoin), the state can still call it illegal, and bring violence to you and your family for not complying.

If one is to control a large portion of wealth, it can only be done with the explicit approval of the State. At any time they can choose to seized you wealth, and you can go to prison. The accumulation of large amounts of wealth becomes impossible without the approval of the State in modern society. If the State does not approve of it, they will call it ‘money laundering’ and treat you as a criminal. This means that it is impossible for someone to be against the state, while still being able to control their wealth. This helps explain why the state is so active in financial oppression against its own citizens, while allowing for out right crimes to be preformed by some of the largest banks in the world, and letting police execute its citizens.

This explicitly displays that the State has the power to stop these criminals today,  and yet they choose not to do so. This is because the government is in bed with these organizations. Politicians receive ‘donations‘ from these companies and former CEOs are given elite, secure jobs from the government later down the line in exchange for this. These companies have bought laws and protection for themselves at the direct expense of other citizens through the corruption of the legal, and political system. It should be clear and obvious for all to see: we cannot recover this system of government, economics, and finance, and we must reject the system as a whole.

Now that we have bitcoin, we can actual do that. Once we reject the money of the State, and their crony capitalist bankers, the value of their fiat money will collapse. The State will no longer be able to pay for their wars, bloated salaries, or mechanisms of fear and terrorism. There will be a great unwinding and no one will accept their shitty paper money anymore.

Conclusion

bit-freeThe State over the course of the last hundred years has pulled off one of the greatest stunts ever: getting people to believe that paper is worth more than real commodities. Through the slow theft of gold for paper, people have been robbed of their ability to have independent wealth. Wealth today can only be acquired at the good will of the State because the State monopolizes the legal authority for how you can get money. The State, and their banker allies siphon off as much value as they can from the productive capacity of normal, hard-working people through devaluing fiat money through quantitative easing and interest.

From the end of gold standard in 1933, to all of the usurpation that brought us to where we are today, it should be clear that governments cannot be trusted with our wealth. Bitcoin and digital currencies offers people a chance to have a financial system that does not empower the State, or elite banks, but protection us from them.

Bitcoin is a global payment system, and storage of wealth that allows for a new system of finance and economics to be built. One based upon the principals of mathematics, privacy, and provability. A new system where we are not punished for saving and protecting our wealth, but rewarded. A system that understands, respects, and protects people’s right to privacy, and their right to conduct commerce with anyone in the world, no matter what State has their bootheel on their back, demanding a portion of their wealth.

Change is coming, and it will be radical, and it will change the world for the better.

Next: The Absolute Value of  Crypto