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Bitcoin, The Alternative To Pandemonium

Right now, America is heating up. Our mass is collectively shifting and vibrating at a higher and higher rate, as we endure abrasive alterations in our lives. Catalysts in society serve as flames that heat up the environments of people and make changes occur.

A lot of this heat is being applied by money right now. There is a large group of people who are unemployed, who were not so before the pandemic. Certain industries crumble while others prosper. A lot of this is merely the acceleration of changes that would have happened anyway, but now occurring at a much faster rate.

Monetary pressure bursts at the seams, much like steam in a container. The most vulnerable in our society, the homeless and the disenfranchised, suffer at the hands of government negligence and mismanagement. They are the cracks — the places where disaster was simply waiting to happen.

“Some of us feel the icy wind, of poverty blowing in the air.”

Marvin Gaye, “Right On”

Why must the poor always despair due to the economic woes of the wealthy? The people lining the street had no responsibility for this disaster; they simply suffered the result of an unprepared society being faced with an unexpected event.

The pandemic response has been baffling. The entire playbook has consisted of printing money, allocating scant amounts to universal basic income payments with the rest being shoved on the already dying economy that left us in this fragile position in the first place.

The money being printed is not being allocated where it should be, and this is a result of its being printed in the first place. If we were using a scarce resource as money, one which demanded a high value and was irreplaceable, we would think much harder about its use. But when one can simply wave a wand and double the amount available to themselves, it is easy to lose sight of sound financial planning.

I would specifically mention Saifedean Ammous’s reference to the economic recovery of the 1920 depression from “The Bitcoin Standard”:

“…the recovery from the depression of 1920-21, which was termed the ‘last natural recovery to full employment’ by economist Benjamin Anderson, where taxes and government expenditures were reduced and wages were left to adjust freely, [lead] to a swift return to full employment in less than a year”

Ammous Saifedean, “The Bitcoin Standard

It isn’t conjecture to say that free markets recover faster than those injected with liquidity — it is history.

Anyone relying on the previous financial and monetary system to bail them out does not know. They do not know that this is what led us to this problem in the first place. They do not know that there is no help coming. They do not know that what they perceive as help (printing money) is actually a degenerative disease in an already afflicted economy.

So Bitcoiners must show them. Show them that indeed, there is an alternative that will bail you out. There need not be ruin. By transitioning to Bitcoin, people can immediately begin not only protecting their wealth but growing it as the dollar continually collapses via cheap credit and mass inflation.

I recall a warning I’ve seen, paraphrased as: “When money is short but they’re printing a lot of it, something is very wrong.”

When money is long and they cannot print it, something will be very right. 

This is a guest post by Casey. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post Bitcoin, The Alternative To Pandemonium appeared first on Bitcoin Magazine.

Source: Bitcoin magazine

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How Bitcoin Optimizes Human Resourcefulness

Curiously enough, the structures that humanity relies upon have been upended by humanity itself. The monetary system, much of our social fabric and our relationship with the State at large have been fractured by problematic abuse.

And yet, Bitcoin promises something different through the various ways in which it optimizes human resourcefulness.

By eliminating inflation, the work necessary to maintain standards of living constantly decrease, rather than increase. By doing away with cheap access to near unlimited credit, capital will be more efficiently allocated. This is the optimization of human resources on a grand scale — all working components of the economy, from the little to the small, will be returned to their natural, uninflated state.

“When you don’t have resources, you become resourceful.”

-K. R. Sridhar

Bitcoin, rather than requiring you to trade your time for capital to be expensed on living, allows one to accumulate capital sufficient to allow for focus beyond living expenses. This grand freedom is inexpressibly important to the future of humanity. Only by allowing people to do what they believe they are best at (and, therefore, most efficient at) will we achieve the optimization of human resources. And people can only do what they believe they are best at when they no longer feel it is necessary to expend their time by accumulating constantly-depreciating fiat capital.

Bitcoin Is Humanity Concentrating Its Resources

Humanity, at large, has been crushed for productivity ever since the Industrial Revolution. To produce such immense technology and industry, an immense sacrifice of time has been required. In a modern digital world, one in which we constantly dematerialize various aspects of our lives, we must dematerialize the sacrifice of our time for wage-labor. Only through these digital media in which profit margin is infinite and goods are shipped instantaneously across the world can humans produce value sufficient to create living conditions we see as desirable for everyone.

This doesn’t mean that we should completely forsake physical labor — rather, the natural progression of an ever-increasingly efficient society would be that physical labor is to be dematerialized as much as possible. We don’t have toll-takers or switchboard operators anymore. And yet, there aren’t any switch operator unions campaigning to regress to previous communication media. This is because nothing happens overnight, and much as the world itself adapts to new technology, so do those whose jobs are impacted. Adaptation is the natural state of the world, and technologies changing industry doesn’t alter that.

Bitcoin channels the powerful forces of human ingenuity and progress. By embracing the rapid changes of Bitcoin, we can anticipate and accelerate the concentrated utility inherent to it.

“Energy is necessary for economic growth, for a better quality of life and for human progress.”

William McClellan “Mac” Thornberry

If we consider Bitcoin as concentrated energy, we can look forward to the future with optimism.

This is a guest post by Casey. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post How Bitcoin Optimizes Human Resourcefulness appeared first on Bitcoin Magazine.

Source: Bitcoin magazine

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GameStop Is The Market Crying Out For Bitcoin

“The tour we’ve taken through the last century proves that market irrationality of an extreme kind periodically erupts — and compellingly suggests that investors wanting to do well had better learn how to deal with the next outbreak.”

Warren Buffet

Irrational markets are a given these days. For retail, fundamentals often do not drive investment as much as momentum and hype. And yet, with the introduction of the internet, retail investors have a chance at accessing as much information as professional traders. With this information, strong, calculated decisions can be made.

Once these decisions are made, of course, they are posted to Reddit, an internet forum with subforums, including those directed at investing. It seems simple — yet profound effects on the market are observable. With these new communication media, investors have unlocked the market-playing capabilities that once only Wall Street insiders had.

Of course, it was a quick matter for the power to return to Wall Street once retail investors began to threaten its bottom line. Within days of a round of short squeezes driven by a subreddit and harming the bets of hedge funds, Robinhood, the effective retail ring leader platform, had halted the trading of several securities, including GameStop, AMC and others. Unfathomable as this would be in the past, it seems that Robinhood had decided that it knew what was best for investors. 

As egregious as this overstep was, it is only a symptom of a larger illness.

All Money Held In Fiat-Denominated Assets And On Fiat Platforms Is Fraudulently Controlled

The only money you truly control is your cash. Even then, the physical U.S. dollars that you hold are constantly depreciating. Banks, creditors, money management applications (i.e., Cash App) — they’re all the same. Every single one requires you to place full faith in the custodian entity, not only to protect your wealth from outside interests but from internal interests, too.

And indeed, Robinhood’s actions are a shining example of the failure to do this.

Only by opting out, and purchasing bitcoin, can one avoid this entirely. By storing one’s wealth on the Bitcoin network, a person is protected in every way. The money is entirely yours — no one can stop you from accessing it. It cannot be loaned out, or restricted, or held or charged interest. Through efficacious planning and insistence of community, Bitcoin prevails.

Regardless of the outcome for GameStop or the other companies with securities involved, the true lesson to be learned is the inability of the people to control their own money. It is shameful. Purchase bitcoin, and you can contribute to the correction of the conditions that facilitate this grand scheme of money manipulation. Purchase bitcoin, and launch yourself beyond the control of fiat money.

This is a guest post by Casey. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post GameStop Is The Market Crying Out For Bitcoin appeared first on Bitcoin Magazine.

Source: Bitcoin magazine

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Stocks Don’t Truly Discover Price, Bitcoin Fixes This

“The stock market is filled with individuals who know the price of everything, but the value of nothing.” 

Phillip Fisher

Bitcoin could care less about its vertical positioning on a chart. But, as emotional monkeys with too much brain for our own good, we get attached to the movements of price. Up and down, back and forth, oscillating like many naturally occurring phenomena, price is supposed to be an equilibrium.

As we have gotten used to utilizing equities, real estate and other assets for storage of value, we have begun to necessitate that they must go up in price. Indeed, if we begin to use stocks to store value, therein lies an attachment to maintaining the price of a stock. Imagine that an investor owns a large amount of stock. That amount is acquired at a certain price, and they now have a vested interest in keeping the price of that security above the purchasing price, regardless of their belief in the company itself.

True Price Discovery Is Scary

Stocks haven’t been allowed to legitimately discover price. Many factors make this true. In this article, I focus on the underlying psychological mechanisms which influence people to hang on to securities they know they don’t believe in. This is a roundabout way of stating price discovery is hampered. 

A true store of value is necessary for an economy. Without it, capital begins to be allocated in unnecessary pools — real estate, the stock market, failing businesses. These pools then have self-interested investors protecting their nominal value. Again, the price discovery of hard money, unleashed, will be scary. The reason investors protect the price of these assets is for wealth storage — but Bitcoin makes these forms of wealth storage dated, and highlights their flaws.

Although hedge fund managers and desk traders excitedly welcome volatility, many investors still liken it to the devil. Volatility, in their eyes, is the potential for loss. Widening one’s vision of the market, however, can change the way one sees volatility. By envisioning time on a scale beyond that of market cycles and economic quarters, we can see that a store of value’s price discovery is a long-term operation.

Gold has always been worth gold, but the dollar-denominated value has changed dramatically. Anyone living in the past would be startled at the “price” of gold today.

For hard monies, price isn’t a reflection of its value (like stocks) but a measure of the denominating currency’s value against the hard money.

How inflated is your currency? You can find out by looking at the price of bitcoin denominated in that currency. It can be a difficult concept to wrap the mind around. Traditionally, we say that an object (like a car) is worth $X amount. “Worth,” meaning this is the value we apply to this object. “Value,” meaning the amount of resources (time) we are willing to give up for some other good or service. In economics (simplified), it is a measure of benefit. But with Bitcoin, $X amount is a measure of the value of the currency denominator, USD. It could be the euro or the yen. With hard monies, we flip our traditional understanding of value; rather than the fiat currency representing the perceived value, the hard money does.

Again, it is tricky to wrap the mind around. Let’s take bitcoin at $35,000. Rather than assuming Bitcoin (the protocol) has a value of $35,000, what we are witnessing is a valuation of 35,000 U.S. dollars at one bitcoin.

Separate The Bitcoin Protocol And The Bitcoin Currency

When a stock is valued, the “price” of the stock is supposed to be a valuation of the company at large. Now, the number attached to the price can depend on the issuance of stock and things like stock splitting. But this is the general concept.

With Bitcoin, we have to separate the valuation of other hard currencies via bitcoin/currency pairs, and the valuation of the Bitcoin protocol. Some bitcoin/currency pairs are at all-time highs — quite literally, in these places in the world, bitcoin are “worth” more. But the total market capitalization in dollar terms is still quite expressible. We can simply do the transactions of the other fiats into USD, and find the total wealth stored in Bitcoin. This, here, is the valuation of the Bitcoin protocol.

As meaningless as it may sound, reversing your perception of Bitcoin valuation makes all the difference.

Going back to the first few paragraphs, I described how investors traditionally protect the nominal value of their wealth-storage assets. This is in part because they have no true hard money to store value in, and as such must create pools of wealth atypical to storing value over time. When we flip our understanding of Bitcoin valuation, however, we can see an end to this.

Assets measured against bitcoins are going to endure straight price discovery. There are no psychological games here – because everyone trusts Bitcoin to store their value, they can now evaluate non-store of value assets properly. Without an incentive to maintain the value of stocks, real estate and other poor choices of storing wealth, the world can be reevaluated to proper prices.

Traditionally people value assets based on the benefits they give — either cash flow, equity growth or some other benefit found through economic analysis. But the value of things in bitcoin is different. When we begin to value things in bitcoin, we can find their legitimate value, as bitcoin is the most legitimately-valued money. There are no manipulations of supply, or buybacks, or quantitative easing or laws protecting value — only direct valuation.

What we are unlocking, here, is a medium upon which humans can draw their ideas of benefit. Never before have we had an unhampered monetary paradigm with which we can interact without fear of human emotion, greed or idealism in the way. This type of money cannot be understated in its importance — valuation in money is the cornerstone upon which we build our ideas of the world and what has value in it.

Money is a medium like speech. Much like speech allows us to express thought, money allows us to express our idea of value. There have been periods of history within which money has been allowed to flourish independent of influence. These periods are merely predecessors to the Bitcoin age. What we will experience, is simply unpredictable. But the idea of Bitcoin itself, free money, sovereign money, has been unleashed upon the world. And, coincidentally, it came about alongside the internet, the interconnecting paradigm shift that has made instant communication across the world accessible to everyone.

The unstoppable nature of Bitcoin the protocol may very well lend itself to bitcoin the currency’s unstoppable ascending price. Only time will tell.

This is a guest post by Casey. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post Stocks Don’t Truly Discover Price, Bitcoin Fixes This appeared first on Bitcoin Magazine.

Source: Bitcoin magazine