I value Bitcoin because it gives me the freedom to make a very important choice.
Chances are, if you are reading this, you live in a modern, democratically governed state where you enjoy some measure of political freedom. And chances are that freedom was hard fought and is therefore enshrined in a constitution, or some similar founding document. And even if you don’t think you value that freedom, I bet you wouldn’t appreciate being imprisoned for disagreeing with your neighbour?
Democracy means you have a political choice. And, generally speaking, wherever citizens do not have this freedom of choice, governments tend to entrench their position of power at the expense of ordinary people. Whereas, if this freedom is enshrined, governments remain largely subjected to the will of the people.
Think North-Korea vs. Canada. Or medieval vs. modern day Europe. Neither Canada nor modern day Europe is perfect, but clearly there’s an improvement. And it’s precisely because people are allowed to choose what’s in their own collective best interest.
That is why I value Bitcoin. Bitcoin gives me that choice. A choice which further counteracts the entrenchment of government power and ensures that governments stay subject to the will of the people.
Bitcoin is the monetary equivalent of voting for your preferred political party.
In a political dictatorship you have no choice, the dictator rules over every exchange of the decision making process. If it’s a benevolent dictator, then you’ll be OK. But how often have dictators turned out to be benevolent?
Likewise, in a monetary dictatorship you have no choice, the state sanctioned currency rules over every exchange of value. And like the history of dictatorships, the history of government issued currencies isn’t an illustrious one. Historically it’s all but guaranteed that the currency you use today will be devalued and lose most of its purchasing power. Probably within your lifetime.
Power corrupts, and absolute power corrupts absolutely, and it’s for precisely this reason that in today’s democracies political freedom is enshrined. My right to vote is what keeps the government from becoming dictatorial. It isn’t a perfect system, but it’s far better than burning people alive or decapitating them because there’s a disagreement.
But clearly there are still shortcomings.
The democratization of the political process has not solved all our problems, and that’s because the political process isn’t the only thing that governs our lives. We are also governed by an economic reality and while some aspects of our economic reality fall within the scope of politics, many aspects aren’t affected by it at all.
We must all somehow earn a living to feed, house and clothe ourselves. And the particular form of money, the store of value and medium of exchange, that we use to facilitate that economic process is hugely important. The nature of our money, the rules by which the monetary system functions, affects every aspect of our lives and yet it is completely unaffected by modern day democratic political processes. Regardless of who wins the next election, it is highly unlikely they’ll change the rules governing the functions of state issued money. Targeted consumer price inflation, artificially low interest rates, fractional reserve lending, zombie loans, quantitative easing and an endless expansion of the monetary base.
In fact, in many ways we’ve gone backwards when it comes to the money we use today. Yes, modern electronic banking is very convenient, but the golden coins we used centuries ago were in many ways more democratic than the fiat currencies we use today. Gold’s basic properties are independent of any entrenched interests. While, historically, governments and powerful entities routinely manipulate state issues currencies to serve their own interests. The mere fact that we operate under a system that targets 2 – 3 % inflation every year, undeniably benefits governments as the largest borrowers of all time, by devaluing their debt obligations.
If I’m unhappy with the monetary policy of the state sanctioned currency, I should have a choice. But I don’t. I have to use the currency that is put in front of me.
Bitcoin is the democratization of money because for the first in the modern era, there is an alternative form of money available. With Bitcoin I can look at its basic monetary properties, its monetary policy, and decide whether I want to use it as a store of value and / or a medium of exchange. And if I don’t like it, I am free to seek an alternative.
None of us alive today have ever had this, so it’s difficult to say what exactly the effect will be if a large part of the population makes that decision. But based on the effects following similar transitions toward more democratic systems, it’s safe to say that, while it isn’t perfect the process of democratization has never made a situation worse.
And what is more, while democratic politics relies on fragile human promises, which can and often do change when power shifts, Bitcoin is programmed and operates the way it does, regardless of individual interests.
With Bitcoin, the only thing that matters is consensus. The Bitcoin protocol asks one question only: ”What is in the best interest of the collective?” and that’s the decision it executes at a protocol level.
I would go so far as to say that with the (possible) adoption of Bitcoin and the resulting democratization of money that follows, the positive effects will be far greater than what was brought about by any previous transition to a more democratic process.
Simply because Bitcoin doesn’t care about its own position of relative power within the system and because no one single individual or group can manipulate it to serve their own interests.
Bitcoin is more democratic than anything else we’ve ever seen before.