Without jargon, without pardon: Bitcoin prevents financial shenanigans by banks and governments. It is a nonviolent reaction against the powers that be who privatize profits and socialize debts. Hence the reference to the following headline in its foundation: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks".
How does Bitcoin prevent these shenanigans? Firstly, through math. The transactions, security, and creation of money, which is manipulated by humans in the current system, is replaced by math. Math is not influenced by profit, nor by political or academic adulation. Secondly, through digital scarcity. With an absolute maximum of 21 million bitcoin this is the first and only finite good in the world. Nobody can create the 21-million-and-one’th bitcoin. Scarcity discourages waste; the opposite of our current economic policy.
Bitcoin is made by fallible humans, so isn’t Bitcoin fallible as well? Indeed. Humans write the Bitcoin code, but everyone can improve this code of which only the essential adjustments are included. Discovered errors are quickly amended, and despite the continuous attacks Bitcoin keeps standing tall. Each day that Bitcoin survives, the network grows stronger. Between now and the third of January 2009 are how many days?
Bitcoin consumes a lot of energy, does it not? It sure does. Securing the network with processing power was a deliberate choice. Energy consumption in and of itself isn’t bad, but the way of generating it can be. Bitcoin is not to blame here. If all the energy worldwide was produced by nuclear fission there still wouldn’t be any climate change. Unfortunately the word nuclear is more dangerous than the technology.
Is Bitcoin for criminals? Bitcoin is for everyone, including ‘criminals’. That being said, criminals prefer anonymous untraceable money and therefore choose cash. Must cash now be forbidden? Furthermore, bitcoin are traceable because all transactions are public. Consequently most of them have migrated toward alternative means. Bitcoin doesn’t cause crime, but conversely: financial crimes caused Bitcoin.
Why not Libra? Facebook wrongly profiles Libra as a cryptocurrency. It is a lie suitable for yet another scandal. Where Bitcoin is a currency for and by the people, Libra is a currency for and by Facebook, even though they don’t admit that in public, obviously. For example, everyone can strengthen the Bitcoin network with their computer; to do that for Libra you literally need to cough up 10 million dollars; so only the richest companies can validate transactions. Hmmm?!
Despite my displeasure the project has potential. It’s barely in the concept stage and already gets resistance from governments. Understandable, because the legislators and power structures threaten to lose their financial stranglehold. Another side effect is the lowered threshold toward Bitcoin. Convenience will initially tempt people toward Libra, but the market eventually favors the best form of money: Bitcoin—Vires in Numeris.
Written for Zoeklicht, an independent liberal magazine.