Why Bitcoin?

Block 902,821

I plan to start a blog/vlog series about bitcoin. The first posts, however, are not going to be about bitcoin, per se. I have found that most people don’t understand bitcoin, or actually don’t even care about bitcoin, because they don’t understand the problem bitcoin solves. Yet it’s the SECOND BIGGEST problem facing humanity. So, I want to unpack that. I want to explain what we were intentionally never taught about money in school. (BTW, the biggest problem facing humanity is sin, which is solved by Jesus). That's not taught in school either.

Money is our second biggest problem because one half of every transaction on the planet uses money. Think about it. When you buy something, you give them money, and they give you the something. When you sell something, they give you money and you give them the something. So, money is one half of every transaction, everywhere. Furthermore, money is the ‘base layer’ of civilization. You simply cannot have civilization without money. Barter doesn’t scale, so we must have something that serves as a medium of exchange, and thus money was invented. Now that we don’t have to barter, we can scale civilization and build the amazing societies we have today.

Okay. So far so good. We have a pretty advanced civilization here, so it seems like money is working. What’s the problem?

Well, our civilization is advanced because our money was working, not because it is working. Isn’t it obvious that our civilization is broken, especially since the COVID era? Inflation, housing prices, riots, political corruption, distrust in every institution, all of these are symptoms that something is seriously wrong. And believe it or not, they have a common cause, and even though it’s not obvious at first, when you see it, you see it. The common cause is bad money.

But the Almighty Dollar is the envy of the world! How can that be bad money? I want more of it! Give me more!

Here is where I’m going to ask you to really open your mind. To let it into your head that the dollar is a corrupt, even evil, monetary system designed to impoverish and enslave you.

That’s a serious allegation; I hope there’s evidence for that!  There is, so let’s unpack it.  

What is the dollar? Where did it come from?

To answer those questions, we need a little history and we need know the basics about money first. As I said a moment ago, money is something that serves as a medium of exchange. If you make shoes for a living and you want to buy a house, can you pay for the house with shoes you made? No, because it would take an enormous number of shoes to equal the value of a house and the house seller doesn’t want that many shoes, or any shoes at all maybe. But with a medium of exchange, you can buy the house with money and the seller is essentially buying the money with a house. He is willing to give up a house for money because he knows he can turn around and buy something else with it, like a truck and a boat. As long as everyone is willing to take that thing called money for good and services, the system works.

If you think a little harder about it, you don’t even want money. Money itself is worthless, or at least it should be. What you really want are the things you can get with money: houses, cars, vacations, and even intangible things like power and prestige.

So, one really important function of money is to be a medium of exchange. To do that, it must be recognizable and fungible, which is a fancy way of saying every unit is equal. A dollar in my pocket is exactly equal to a dollar in your pocket, and we can trade them to no effect. But money must do other things, too.

Money must be salable, another fancy word that simply means you can sell it easily at any time to anyone. In other words, it’s something people are willing to take. This is basically why it serves as a medium of exchange, but money must salable across space, time, and scale. Let’s examine each of these.

Salable across scale means you can use the same money to buy things both big and small. To do this, we break up the money into units, like $1 bills, $50 bills, etc., even nickels and dimes and quarters. You can use a quarter to buy a gumball, or a $100 bill to buy a family dinner. However, if you think about it, the dollar is not particularly salable in scale. The largest unit is the $100 bill. If you wanted to buy a $500,000 house using cash, that would be a lot of $100 bills, 5,000 to be exact, which would actually be rather bulky to carry and really hard to count. It’s not a problem because large payments like that are done digitally these days. Even gold, which has historically been the best money, was not perfectly salable across scale, which is why silver was used for smaller purchases.

Salable across space means you move money around easily. Carrying a few hundred dollars in your wallet or purse is pretty easy, and so the dollar does a pretty good job for everyday use. However, if you wanted to use real cash to buy that house, it would take a suitcase to carry $500,000. Furthermore, in the age of the internet, dollars can’t be used directly online. We do have digital dollars these days, but that’s a major problem, as I will describe later.

Salable across time means that money is a store of value. This is where the dollar really fails. Good money should maintain its value (or purchasing power) indefinitely. However, the dollar has lost over 95% of its value in the past 100 years. NINETY-FIVE PERCENT! This is why we no longer have 5 and Dime stores, because you can’t buy anything for a nickel or a dime. Even our modern Dollar Stores don’t sell anything for a dollar anymore. To make matters worse, the loss of the dollar’s purchasing power is accelerating and this is what WILL cause the dollar to ultimately fail completely, as all other fiat moneys have before it.

Proverbs 13:22 says “A good man leaves an inheritance to his grandchildren”, but with dollars this is essentially impossible. My dad bought a new house in 1971 for $17,500. If he had put that money in a safe to give it to his grandson to buy a new house 50 years later in 2021, it would not even be enough for the down payment. Nearly the entire value of a new house was stolen from him and his children via the evil of inflation, which I will unpack shortly. So, the only way he could have actually preserved his wealth for his grandchild is to hold the house – not dollars. That same house is now worth over $200,000. Yet one of the majors functions of money is to be a store of value.

I mentioned fiat money. What is that? The word ‘fiat’ is Latin; it means by decree, or let it be. It is used in Genesis where God said: Let there be light. In Latin, this is translated as fiat lux. God simply decreed that light should exist, and it did. Fiat money is money by decree. If it were God doing the decreeing, it would be trustworthy and good, but it’s not God, it’s our government. The dollar is simply decreed to be our money by the US government, and it forces us to use it by making taxes payable in dollars. The problem with money by decree, or fiat money, is that it always fails as a store of value and consequently, people stop using it – when given the chance. The reason why fiat money ALWAYS fails as a store of value is because governments cannot resist printing more of it to spend on their ever-expanding budgets. In the US we have a central bank called the Federal Reserve. When our government has spent all the money it collected in taxes but wants to spend more, it simply has the central bank print more money and they borrow it (with interest). The United States is turning 250 years old this year. It took over 200 years for our debt to reach $1 trillion, in 1981. Since then, we’ve added another $36 trillion and it’s growing by $1 trillion every THREE MONTHS. Ladies and gentlemen, the dollar is already dead, most people just don’t know it yet. And the reason it is dead is because of money printing.

Inflation reveals itself as a rise in prices. Things at the grocery store get more expensive. Vacations get more expensive. Utilities get more expense. The mainstream media will usually blame inflation on greedy corporations, but recently they’ve even blamed celebrities and even us – the people! What they never blame is the actual cause: money printing. Even the name inflation gives it away: by printing money the central bank/government is inflating the money supply. More dollars chasing the same goods and services means their prices go up. It’s that simple. They want to give billions and billions to Ukraine but you would never tolerate paying taxes for that, so they simply print the money and charge you by prices going up. Ron Paul famously said that it’s no coincidence that the bloodiest century in human history – the 20th century – was also the century of fiat money. Fiat money is evil because it funds forever wars. Young men DIE because of fiat money. Fiat money is evil because it steals your stored value – your time and labor – by rising prices from printing money. Fiat money is evil because it is designed to move money from the poorest members of society to the wealthiest. If you save in money, like most poor people do, you are getting poorer every day because of this system. But if you are rich and own assets, like houses which have risen from $17,000 to $200,000 in the past 50 years, you are getting richer, or at least not getting poorer. And all of this is by design.

There’s another hideous component to fiat called the Cantillon effect. Basically, this means that those closest to the money printer – the central bank and member banks – benefit beyond the average person. I’ll give you two examples. Mark Zuckerberg bought a house a few years ago for like $25 million dollars. Oddly (if you didn’t understand the game), he took out a mortgage. Mark Zuckerberg has billions and billions of dollars; he could drop $25 million from his car onto the street and never notice it was missing. So why would he take out a mortgage rather than pay cash for the house? Because the bank gave him a 0.5% interest rate while, at that time, the interest rate for you and me was over 6%. Mark took the ‘free’ money from the bank and invested it in Facebook stock, which at the time was making like 4-5%. He can do this because he gets special treatment from the banks. The other example is from the Trump family. Eric Trump said he never knew he was the beneficiary of the Cantillon effect until after his dad became president. He said in the past he could simply call up a bank and get millions of dollars over the phone, but after his dad was elected bankers no longer took his calls. This example not only illustrates the special privilege he enjoyed previously with banks but also illustrates how banking can be weaponized against disfavored people or groups. Eric Trump is now a Bitcoiner.

So, inflation is simply printing money to benefit governments, bankers, and the wealthy. As if this isn’t bad enough, the Federal Reserve targets an inflation rate of 2% per year. Why 2%? They are shockingly honest about it on their website. Basically, 2% is the target because if it’s higher people notice they’re being robbed, and if it’s lower people notice their money stores value better. Two percent is the magic rate they can steal from the public without them much noticing or caring. But look what 2% does over time. If you put $50,000 under your mattress today, it will have the buying power of $25,000 in just 35 years. It will lose one half of its value in 3 decades. That is a meaningful amount of theft when a young worker is putting away money for retirement, or trying to build an inheritance for their children and grandchildren. Now consider that in recent years inflation has been well above 2%, even more than 10% during the COVID years.

Fiat money is called easy money because it’s easy to make more of it. Hard money is hard to produce. Gold is hard money not because it’s a rock, but because it’s hard to make more of it. Mining gold is genuinely difficult. Even still, the inflation rate of gold is about 2-3% annually. The best money the world has ever known (for storing value) still loses half its value every 30 years.

So, our money is designed to steal from the poor and working class to benefit the rich and investment class. It is designed to illegally and secretly tax us to fund wars and money laundering by politicians. And it was designed in 1913, in secret, by six men who held 25% of the world’s wealth at the time. The Federal Reserve Act was passed by Congress on Christmas Eve in 1913, when the average person was not paying attention. Oh, and its unconstitutional to boot.

Bitcoin offers us a way out. Bitcoin is capped at 21 million coins, and there will NEVER be one coin more. Thus, it is the hardest money to ever exist, and it cannot be inflated. The distribution of coins is fair and equitable; like gold mining, anyone can mine for bitcoins. It is decentralized and not controlled by a central authority; bitcoin is rules without rulers. The rules are forged in computer code and enforced by node runners around the globe.

Proverbs 11:1 says that this: The Lord detests dishonest scales, but accurate weights are a delight to him. From this verse we know there is good money and bad money, and the Lord delights in good money. The dollar is a dishonest scale, a money designed to steal and control. Bitcoin is an honest weight, money designed to actually GAIN value over time not lose it. It is money that cannot be weaponized against you.

We have the choice: dollars or bitcoin. In Deuteronomy God says, “See this day I lay before you blessings and curses, life and death. Now choose life, that you and your children may live.”

When it comes to money, I choose Bitcoin.

There’s much more to say about the dollar, it’s history, and it’s abuses, and about Bitcoin and how incredibly magnificent it is, but those are stories for another day.