Updated: Jan 23, 2020
Hello and welcome to bit-buy bits first blog post.
25 minutes ago I was making the final adjustments to notes Ive been working on for weeks. 15 minutes ago I accidentally wrote over and deleted everything. 10 minutes ago I checked franticly to see if anything was recoverable. 5 minutes ago I accepted my fate.
Its 02:25 on Thursday the 26th of September 2019, I’m tired, it’s raining and I’m writing again. Usually I will avoid writing at all costs, it takes me hours to produce a jumbled mess of ideas with poor spelling and grammar, that I can verbalise with ease.
I’m writing to explain, as succinctly as possible why I have started BIT-BUY-BIT.
I am here to oppose the censorship of speech, expressions or ideas. BIT-BUY-BIT aims to promote freedom and to question everything!
Let’s start with a few questions that have me thinking rather than dreaming.
What is time? In my opinion time is the most valuable and scarce asset for all living organisms.
What is money? Money is intertwined and effects most aspects of our lives.
Humans have given it the power to control, change, restrain and free us. Is trading our time for money the deal of the century or the biggest hustle in history?
I believe we could all benefit from a little humility by accepting we understand less about money than we let ourselves believe. We dream of what we can buy with money, it’s used as a measure of success globally and we worry when we don’t have enough to pay the bills. But what actually is it? I think it’s basically a language used to express value coupled with systems that have evolved over thousands of years.
Henry Ford once said “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” It seems his vision extended well beyond transport.
Let's break things down into three sections. The past, present, and the future of money. To understand where we are now we must know how we got here. First we will go back and explore 6000 years of iterations that these systems have gone through in under 5 minutes. Next we will discus the systems as they stand today. Finally We look to the future, what will money become and what’s our best option?
Lets go back to 10,000 bc, as far as we are aware Early man exchanged resources and services for the benefit of each party, We started with a barter system. Although barter is still used by some today it is not scalable. Its scalability is closely correlated to the Dunbar number. The Dunbar number is the maximum size a social group can reach with ought trade, language or currency. It's the limit to social organisation in a flat non hierarchical structure. We observe the same limit in primates. The largest example of chimpanzees you will see before they split into two tribes and start fighting each other is around 150 members of the species.
We see this in human populations too, One of the reasons for this is the complexity of keeping a matrix of exchange rates for pricing services or goods in other goods and services. Barter also has a double coincidence problem where two coincidences must happen for a trade to take place. First you must find someone willing to sell what you want. Then the seller must also want something you are willing to sell.
We found a solution to this around 4000 years ago. We called it money and had just one exchange rate between money and all goods and services. Although its form changed over the next few thousand years the basic idea remained.
3000bc grain is used as currency and shekels are a measure of weight that later evolves into weighed copper silver and bronze. 1200 bc cowry shells were used in china and off the Indian Ocean. They were used in the mountains not coastline due to scarcity.
600bc to 100bc crude metal coins first appear in china however not being precious metal they were impractical for large purchases. 700bc precious metal coins made from gold and silver were first used in Lidia (modern day Turkey)
118bc 1 sq ft of deer skin was used as currency and could be considered the first iteration of notes. 806ad-960ad paper bank notes first appear in China followed by centuries trying to balance production, They then disappear after 1455.
1535 wompom a string of beads made from white clamshell is first documented. 1637 the wompom is declared legal tender in the United States. 1816 England moves to a gold standard. 1900 the United States moves to a gold standard. 1913 the federal reserve system is created establishing a central bank with gold backed federal reserve bank notes.
1920 charge cards are introduced. 1950s credit cards are introduced. 1970 the bank secrecy act is signed by Richard Nixon meaning citizens no longer have privacy nor control of where or who they can send money too.
1971 the United States officially goes off the gold standard. Citizens can no longer claim back the gold they had deposited in banks and were promised would back there currency. This was followed by a complete decoupling from gold meaning money was no longer backed by or tied to anything. This allowed governments to remove their natural limit for overspending meaning they had no constraints.
1989 we have a stock market crash on Friday, October 13. This crash is referred to by some as "Black Friday". 1994 online shopping starts. 1997 mobile commerce is introduced. Coca cola produce vending machines that receive payment via text message. 1999 PayPal was launched. 2000 we have another crash referred to by many as the dot.com bubble.
2008 financial crisis sweeps the world costing hundreds of billions due to corruption and irresponsible practices.
What do our systems look like today? Since 2008 central banks have been injecting record levels of DEBT into the global financial system. Global debt is now just shy of 250 trillion dollars.
Billions and Trillions are numbers most of us don’t deal with day to day.
To help show just how big a number 250 trillion is.
1 million seconds equals 11 and 1/2 days.
1 billion seconds equals 31 and 3/4 years.
1 trillion seconds equals 31,710 years.
If we could earn 1 dollar with each passing second we could clear our debt in around 8 million years.
Record levels of debt ,overvalued assets, negative yielding bonds, negative rates, geopolitical issues, currency wars, the war on cash, privacy and freedom along with other patterns I see hint at profound systemic risk.
The warnings I have given to friends and loved ones over the past few years have sounded like the ramblings of a mentally unhinged doomsday dreamer. They are usually met with heavy skepticism and ignored.
I could be wrong. Highly trained economists and central banks could have this all under control, they could know what they are doing and maybe it’s all part of the plan. Let’s hope those who we’ve trusted to control our money are steering us safely towards a better future.
I’m calling bullshit! The people and systems we have trusted to steer this ship are asleep at the wheel. We are beginning to take on water and things are accelerating. This crash, or even just the threat of it, will lead governments to steal citizens value through inflation.
Although I would feel like a fool and likely be ridiculed for having a contrarian view.
I can cope with speaking my mind and being wrong. What I can’t cope with is being right and not warning people who might otherwise become unsuspecting and undeserving casualties.
We are miles from shore in icy waters. Those who profited greatly making the decisions that lead us here will not go down with this ship. they are about to take a one way trip by private helicopter to safety. They haven’t built any safety boats, there are limited life jackets on board in case of emergency.
Luckily I have my eye on a life raft. A pseudonymous individual or group took time to build it bringing enormous risk to themselves with the hope it might save you!
at first glance It can be easily overlooked. However on closer inspection its elegant design paired with its designers incredible foresight is beautiful.
If you look closely as it bobs along next to our gleaming seemingly sturdy yet sinking ship you will see its name inscribed on the side. Our little life boat is called Bitcoin.
Maybe you’ve heard the name before, read an article or watched a news report.
You might have formed opinions based on the information given to you.
I first heard of it while watching a documentary on the silk road and Ross Ulbricht. Although it was an eye opening story I viewed bitcoin as nothing of real interest to me. I could not have been more wrong!
The second time I heard about it I decided to do a couple of hours research to see if it was a good investment. My research morphed from a couple of hours into an obsession consuming thousands of hours. it turns out Bitcoin is the best performing asset over the past 10 years and I believe it will for the next 10 years. However to view bitcoin as just something to invest in is completely missing the point.
Bitcoin is misunderstood. It's multifaceted, complex and is evolving at such a staggering rate that keeping up with the innovation, businesses, infrastructure and group of individuals working tirelessly propelling it forward is near impossible.
Disrupt and innovate are words often spoken in office buildings and business lunches. They are usually nothing more than branding or slogans for soul less corporations but they sound edgy and cool so it sells.
History has shown us true innovation, the type that really disrupts is not met with open arms. It is usually ignored at first, then its laughed at and ridiculed. finally the people who mocked or ignored it watch it change everything.
The disruptive technology I can best relate bitcoin too is the internet. In the late 80s and early nineties when the internet was slow, unscalable, difficult to use and dismissed by most. If you had forecasted apps, online shopping, social networks, or pitched the idea for launching Amazon, Facebook, google, Air BnB or uber most people would have thought you crazy.
Very few could see how the internet would change the world. Rather than listen to them we heard a constant barrage of hit pieces from the media about how it would only be used by criminals and pornographers. It all sounded very scary, we were told safe, curated intranets would be made using its technology. Anyway who would bother using it, we have libraries and a very good postal service.
Nobel prize winning economist Paul Krugman said in 1998. "The growth of the Internet will slow drastically, as the flaw in 'Metcalfe's law'-which states that the number of potential connections in a network is proportional to the square of the number of participants-becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine’s."
Paul Krugman along with countless others have similar prediction for bitcoin today. The media want you to know bitcoin is volatile, dangerous, bad for the environment, slow and unscalable, however some of the technology could be used to create efficiencies within banking. Fool me once….
The internet disrupted long standing institutions, the printing press, media, retail, postal services, telecommunication networks and countless others. Those too slow or arrogant to adapt were made irrelevant. A good example of this would be blockbuster/Netflix.
Bitcoin and the internet are communication networks that can be used by anyone anywhere freely. Both are Flat networks That continue to make the hierarchical structures of the past become less relevant over time. Both have and will continue to disrupt and innovate.
The internet enabled the store, transfer and access to information. Bitcoin will enable store of value, transfer and access to finance with no 3rd party. Together they have given humanity the free flow and full control of communication, information and Money.
Hopefully by now we know things might not be quite as they seem. We have identified some of those who have abused power and broken our trust. We have recognised the obstacles ahead and realised we have a couple of useful tools at our disposal. (internet and bitcoin)
where do we go from here? What could the future look like? To learn more and peer into the future, join me now for episode one of our podcast.