The banks only have one thing to fear: their own greed and stupidity. They need to stop gambling with our money.
Newton’s Third Law of Physics: For every action in nature there is an equal and opposite reaction.
I will never forget the 2008 Recession and I will never forgive the banks or the US government.
- I remember when the banks lost billions of dollars in mortgage backed securities (and the government pushed laws that made it possible).
- I remember how millions of people lost their jobs.
- I remember that I had just graduated from college and couldn’t get a good job because the government and the banks made stupid decisions that caused a global financial meltdown.
- I remember how the government bailed them out because they were “too big to fail”.
And I know how these big banks make money off fees, debt, collateral, and loans to make lot’s of money. I can assure everyone that if you can’t pay your debt to the bank you may experience bankruptcy. If the banks can’t pay their debts “Uncle Sam” will bail them out and inflate away the value of the Dollar.
In other words, the tax payer bails them out.
Now it’s 2020 and they are getting more bailouts. When will be the next time they need bailouts? How much money should we print so our loan sharks (I meant bankers) can stay in business? Most of all how much longer can the US Dollar go Brrrrr before our money loses all of it’s value?
Enter Bitcoin
On October 31st, 2008 Satoshi Nakamoto released the Bitcoin whitepaper. Was this coincidental?
Probably not. Just read the message on the right hand side that was in the Genesis block (first Bitcoin block). Even if Satoshi didn’t create Bitcoin because of the 2008 Recession it certainly was motivational. The 2008 Recession also made many people angry at the banks and the US Government; this encouraged more Libertarian minded individuals to try out Bitcoin. From there Bitcoin has grown and grown… but why?
There’s an old joke:
Two men are running away from a bear. One man looks at his friend and says “I don’t know how we can possibly out run this bear.” The other says in response, “I don’t need to outrun the bear I only need to outrun you.”
Many people think Bitcoin has to be better than the US Dollar and the Euro to be successful. That is not true. Bitcoin only needs to do two things to be highly successful.
- Be more accessible to the common man than the US Dollar (which is true in third world countries).
- Be better than the worst currencies.
Bitcoin only needs to outrun the Venezuelan Bolivar, the Zimbabwean Dollar, and the Turkish Lira to gain new users. It’s more accessible than the US Dollar for people outside the US and even if Bitcoin is unpredictable it’s still much better than a failing currency.
Like most internet technologies Bitcoin gains value from it’s network effect.* The more people use it, the more valuable it becomes. This value is compounded because Bitcoin has a limited supply. Bitcoin’s limited supply is a breath of fresh air compared to the demon of hyperinflation.
Should Banks Be Worried?
The answer is yes and no.
No.
Banks have a lot going for them.
- They have the support of governments.
- They are rich and can buy fin tech and cryptocurrency technology.
- They (still) have a lot of trust.
Banks can easily co-opt Bitcoin and other cryptocurrencies and the US government has declared this as legal. I will not be surprised if in 10 years a lot of people hold their Bitcoin in a bank; many people fear the responsibility that a Bitcoin wallet demands. I also expect to see bank utilize cryptocurrencies like Ripple to help lower their fees and keep them competitive with cryptocurrencies like Bitcoin. Most of all, many banks already have hundreds of patents on “blockchain technology”. If the banks take the mentality of “if you can’t beat them join them” they could be around for hundreds of more years.
Yes.
Central banks that seek to inflate their currency to pay for government debt, or fund a war will soon find their citizens “opting out” and adopting cryptocurrencies like Bitcoin. Citizens now have options if a government wants to abuse their monetary privileges. On the other hand, I think citizens will be happy to stick with their traditional currency if it well managed. For the first time in many years, governments will have to compete with other currencies.
Any banks that refuse to change with the times and adopt fin tech, utilize blockchain technology and assist with cryptocurrencies will find themselves obsolete. Many people who are “unbanked” will choose to adopt cryptocurrency so they can have the advantages of banks but not have to travel hundreds of miles to get to a bank (this is the case in many third world countries). Banks are going to find they have a lot more competition now that fin tech and cryptocurrency has emerged.
I mentioned above how banks are working on blockchain technology; so far I am not impressed. Bitcoin is:
- Open (anyone can join it and build on top of it)
- Trustless (I don’t have to trust any individual)
- Decentralized (there is no central computer to break into)
- Immutable (the blockchain can’t be changed)
- Limited (only so many Bitcoin will be produced)
As Andre Antonapoulos said “Bitcoin is the internet of money”. What the banks are making won’t be open, won’t be trustless, won’t be decentralized, won’t be immutable, and won’t be limited. They are making the intranet of money and it won’t be free.
Choose the Future
We are moving to a cashless society; it’s not a matter of if but when. We have a decision to make; do we want our children to live in a free world or in 1984? A free world will have a cryptocurrency like Bitcoin that is not controlled by an mega corporation or government. 1984, will have a currency that is completely controlled by a company or government.
Have you ever been arbitrarily banned or punished by a social media platform? It sucks to have your posts taken down or an account banned; especially if you worked hard on it. Just imagine what life would be like if Mark Zuckerberg could freeze your account or take all of your money arbitrarily. What if a despot took over and wanted to destroy all of his political opponents. All he has to do is see who donated to which candidate and then freeze their accounts and take their funds.
It has already been shown that “we the people” should not trust the banks or our governments with our money. I believe in the separation of Church and State; I also hold to the separation of Money and State. What do you believe?
Conclusion
If you believe in the separation of State and Money; the best thing you can do is buy a little bit of cryptocurrency. The one to start with is Bitcoin. I am not making financial advice; this is an ideological statement. I have no idea if buying Bitcoin will make you wealthy.
This is a subject matter I am passionate about. If you have any questions feel free to message me. If you want to learn more about cryptocurrency follow my Quora Space: The Crypto Cave
*To understand the value of a network effects just think about Facebook. If only Mark Zuckerberg is on Facebook it’s worthless; if billions use Facebook it becomes a billion dollar mega corporation. The same goes for most other internet technologies the number of users is just as if not more important than the underlying technology.
