Crypto News Updates

Trust, That We Need More Of

Bitcoin grants individuals the chance to create more trust through the rebuilding of social capital and economic stability.

(This article is part of a two-article series from Karo Zagorus. The previous article in the series can be found on in Volume 10 under the name “Trust, The Lack Of.”)

Fiat money has evolved into a disease which created an environment that seeped into the foundations of society. Last time, we looked at the direct effects of money, what it can create that self reinforces our environment into evil cycles that indirectly affect human trust. It is not the institutions’ and individuals’ goals to abuse our trust, their behavior is indirectly enabled and reinforced by the environment it is present in.

This problem directly affects cognition — we turn more selective with who we trust and how we form our connections. Social capital is required for a properly functioning society, and it is what is depleting today. Imagine social capital like energy in a mobile game that forces you to wait until it gets refilled over time. Now, imagine if people would operate the same way. It works exactly the same way, if you are out of it, you at least need some money to raise your time preference in order to refill your energy meter to continue doing activities. But it’s a bit too simplified that way, truth to be told, because it can create way too many consequences if it depletes.

Robert D. Putman, in his book titled “Bowling Alone: The Collapse And Revival Of American Community,” successfully shed light on why we have fewer friends. Although, it falls short of understanding the main cause: Paper money.

As society loses stored value, time preference rises, which then creates reinforcing cycles that deplete social capital and, by that, creates the perfect environment to dissolve trust. This simple process is what is going down right now in society, but it is not just trust that it is dissolving. It’s the very social fabric also.

In Japan, where the national debt-to-GDP ratio is over 260 percent, we can best observe the negative effects of societal loss of stored value playing out in full force. Although Japan is a more conservative society resistant to widespread change, we can see that it is not necessary to be socially liberal in order to be directly affected by it.

Japan is seeing record low levels of births and marriages and more individuals suffering from depression and suicides. It is a fact that, within Japan, there are over 1.1 million individuals who are suffering long term from acute social withdrawal (In Japanese this is known as “hikikomori”). Where sources claim that young and old individuals suffering from hikikomori are affected by numerous problems, the underlying cause can be easily reduced down to the fact that Japanese cultural phenomena have devolved to the point that its high time preference phenomena causes societal destruction.

It is possible to conclude that two factors can create high time preference with extremely similar effects (although they completely differ based on environmental factors), which are debt and inflation. (Literally, these factors stem from central banking.) Debt accelerates spending and robs individuals from savings and, therefore, the ability to have a safe and stable future. While inflation does the exact same, but robs individuals of their savings directly.

Although Japan’s case is very special because it is an extremely rich country that is at the pinnacle of technological advancement, the same negative effects of paper money on society will eventually surface in any society. (At this point, someone could claim that we could group the effects of social isolation to central banks. It could be possible to do that, but the problem is that the individuals controlling them might have interests that are based on false foundations — MBA, social science economics, basically — but the fact is that then we could also go all the way back to the main culprit of the whole system: John Maynard Keynes. A sound central banking policy based on hard money could be different, therefore we cannot blame these problems on the concept of a central bank alone. But I think I can also agree with the opinion that we should group them together.)

Another negative effect we see today is that we want to organize less and join fewer organizations because there is just no point to it. There is no point to voting anymore, just as there is no point to joining bowling leagues anymore. The need for chivalry has died long ago.

If you are a bitcoiner, you are within this environment and you have managed to get out of it somehow, by luck or education. However, deflation is not an immediate fix for our problem, because reverting neural synapses wired in by this disease is a long-term process. Miracles don’t happen, especially when your environment’s dangerous specter overshadows you.

As of today, many of us lack trust and faith in the system, and it is way beyond repair. The positive effects of bitcoin need to slowly override those of the negative system that surrounds us.

We can already observe some faint light at the end of the tunnel. Savings have been reintroduced into the hands of society. You can save money and the State is unable to influence your funds on the Bitcoin blockchain. Nobody can take your money away, and this creates economic stability that positively influences mental wellbeing. When you know that you have savings, and that you will be able to pay any and all unexpected expenses that might arise and that you have built the foundations of a prosperous future, things change.

You will certainly be less depressed and other emotions will overtake that feeling with higher intensity. You might feel more responsible for your future and this will eventually lead to excessive stress. (We have to be very careful with depression here, because some variants of it might be due to underlying mental conditions that a lowered time preference and reintroduction of savings will not solve at all.)

So, did we fix trust?

No. We certainly did not, since trust is certainly not broken. The process of how we form trust started to change thanks to Bitcoin.

So, what is going on exactly, then?

Bitcoin basically restored a long lost function of organization and paired aspects of it. Bitcoiners today actively seek to find and form stable connections based on the mutual understanding of their economic, societal, religious and political aspects. The sound basis has returned because now, connected participant individuals abide by an unwritten code of honor that sustains the fabric of trust within their realm. Individuals learned that now they have many things to lose if they remain inactive.

In a world of decay, where every aspect of the civilized norm slowly disappears to be replaced by a new normal, the only fix is if others band together to repair the broken system. Bitcoin was created to solve a problem, but it is fixing many because the underlying root cause that it is fixing leads to everything else. But the effect is so strong that Bitcoin alone cannot fix the problem, individuals must act as a self-help hotline, literally to bring about the function again, showing others that there can be life beyond credit cards and zero savings.

Let’s not beat around the bush.

Trust is not simply something like believing that your neighbour will not invade your home in the middle of the night because the Ledger leak made him think that you are a bitcoin millionaire (even if you are), but it is the basic foundation necessary to advance humanity through entrepreneurship, sound science and organization. Without trust, the whole world breaks down and we will be unable to progress. This is what the use of Bitcoin grants individuals: the chance to restart progress and create more trust through the rebuilding of social capital and economic stability.

(If you didn’t know, the underlying basic principle of enterprise is that of trust. Without it, business cannot extend and expand out of the family.)

If we inhibit trust, as the breakdown of social capital does because of the high time preference created by the loss of savings, it enables the processes that lead to the type of society that we are all now living in. It pushes individuals away from the system because the system itself is broken and they seek refuge in failed ideological promises, like that of Marxist socialism or communism.

Human organizations have now returned to the foundations. When I look around (basically, browse Twitter), clear aspects of rebuilding can be found. The average bitcoiner have more stable alliance-level relationships (built on the foundations of honor, trust and personal reputation) with individuals who are willing to take extreme risks to see through the revolutionary phase of Bitcoin. Though temporary, the fact that Bitcoin could create such an environment is notable. Bitcoin’s next phase is revolutionary, its users will change the world and no State actor can tell them to stop.

When I claim that chivalry has returned, it is for real. Some might argue that you have no friends if you Bitcoin, but this is an extremely flawed view. As we progress through the revolutionary phase, dangerous encounters could be on our doorstep that require the full-fledged cooperation of aligned individuals, similarly to how Medieval knights swore allegiance to God or to a brotherhood, or how many in the U.S. take the oath of allegiance.

Remember my writing about the importance of being neutral?

If you don’t stay true to your allies, you will lose every one of them.

By rebuilding the smallest elements of trust, you directly help Bitcoin fix the world. It is arguably evident that if we would, right now, give everyone bitcoin and everyone would use it beginning tomorrow, it would wield a shock effect that could disrupt society further and cause despair long term (this is because you haven’t solved high time preference and you haven’t solved other negative effects that could go nuclear because of a Bitcoin monetary standard) therefore, we need the processes that go on today to properly fix everything.

I cringe every time people say that “Bitcoin doesn’t need you,” because they are so wrong. Without the input and care of individuals who use the Bitcoin network, store value on it or organize around it politically, it would be completely meaningless in the current state of affairs of the world. (Bitcoin literally even pays you to proactively engage in revolutionary behavior because it needs you! There is no meaning in life without anyone to talk to or to print blocks for — Bitcoin simply does not want to remain lonely.)

Since social capital is now slowly being replenished (for some, it could already be replenished, based on the level of toxicity apparent on Twitter), these individuals should double down and keep engaging in building more of the trust that we need. Build not just groups, but build the basis of entrepreneurship and the foundations of the brave new world.

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

Source: Bitcoin magazine

Crypto News Updates

A World To Come

“Cryptoanarchy.” It’s not a new term, but it has sincerely evolved throughout the years as the advancement of the sovereign, personal reserve currency started taking over the financial system and began attracting more and more investment capital from large institutions.

However, the term will eventually be hijacked as the sovereign individuals arise due to the powers granted them by their monetary reserve. Eventually, this will lead to problems that many right now are attempting to counteract by putting thought into the establishment of modern citadels and protective social groups.

The idea of Bitcoin citadels is based on the idea of self-preservation, achieving isolation from the masses and those in power who could potentially harm Bitcoiners. This process of potential harm has already started and it will be impossible to halt because some individuals recognized the underlying dangers that these newly-acquired freedoms can pose. Freedom, in this sense, is absolute because Bitcoin grants absolute freedom. When you hold Bitcoin, you are basically in control of your own personal nuclear missile launch codes. This grants sovereign individuals the ultimate power on this planet.

Libertarian ideology in essence is a contributing factor to the need for citadel thinking, because its non-aggression principle is not often able to solve situations that involve violence. Since the future seems to look unstable, others might lean on the input of anarchocapitalists who are more willing to use their “launch codes” as weapons of mass destruction. This potential threat of violence is so great that the establishment of citadels has become a necessary consideration for many.

Future aspects of monetary transition and its effects are hardly predictable in the current Bitcoin epoch and at least five more years are required to have a clear visual image of what could happen and what the ascent of millions of sovereign individuals will cause in the social hierarchical structure.

Bitcoin has opened Pandora’s box, you only have to attend Hacker’s Congress Paralelní Polis once to understand that. But if you still don’t understand what I am talking about, I will attempt to make it clear.

The Inevitable Future Of Anarchy

It is still debatable whether or not it is possible to achieve a full transition to Bitcoin sovereignty without a potential destructive process playing out. The future’s outcome will solely depend upon whether or not we are able to enforce our core principles, unwritten code of honor and ethics upon others in order to make radical ideology unsustainable and unprofitable in the long run. (As I have mentioned, those “launch codes” come with great responsibility. Using them irresponsibly leads to total personal annihilation, either reputationally, honor-wise or ethically.)

Today’s world is already marred in widespread corruption and underground organizations that are clearly criminal in their behavior. Mafia organizations, motorcycle gangs, armed cartels and terrorist organizations (and more) will still exist in the future. With the advancement of decentralized marketplaces and the sustained presence of darknet markets, some individuals or criminal organizations might become intrigued by these marketplaces’ limitless potential at achieving less ethical and moral goals.

This is a problem, because it is a cold harsh reality that is incompatible with the ideals held by the majority of Bitcoiners who think the State will always be there to protect them. (This is a big fallacy of State dependency.) This is why it is becoming inevitable that self-defense groups with shared interests will begin to appear. (It is already happening, since #FreedomMaximalists on Matrix is a thing now.)

Armed violence will be present and will be an ever-increasing danger of tomorrow. It is therefore unwise to live in bubbles and not talk about these problems openly, like treating the topic as a quasi taboo. It is highly likely that the future will breed hatred and extreme distrust that will end with violence among Bitcoiners as they will start building out the playing fields of power structures. Most of these cases will have very clear resemblances to today’s organized crime groups, operating in similar ways to the Sinaloa Cartel or the Hell’s Angels motorcycle club.

During my time researching social organization, the question of the future related to violence has lingered. Anarchocapitalists will likely not shy away from the use of violence to reach their end goals if they feel that their presence and future operations are endangered, especially if business goals are hindered by opponents. Assassinations will be, sadly, a possible occurrence in the future. High-profile Bitcoiners will face high costs for personal safety and physically-armed protection. (This has been proven by the recent Ledger customer list leak, as many of those customers received abduction and murder threats.)

Privacy-focused Bitcoiners who do not meet in real life will likely be more shielded than those who actively organize in the open. Extended friend circles with high level of trust will serve as a more effective layer of protection, but the problem is that we are running out of time — the influx of new arrivals has begun and it will be potentially difficult to build out strong enough connections without having negative effects play out, motivated by greed or financial biases. (I should note that this is still being observed and a predicted possibility in the present. I am personally hoping that it is not going to be a hindering factor to forming interpersonal relationships among Bitcoiners.)

It is natural that Bitcoin has given a boost to Deterrence Dispensed and that 3D-printed firearms will play an important role in the defense of private property in countries that restrict the ownership of firearms. It now rests on legislators’ aptitude to effectively hinder the ability of individuals to protect themselves or to start introducing new legislation to allow their citizens to bear arms. However, it seems unlikely that there will be any such rights granted to anyone in the future in highly-restrictive countries.

Choosing The Bitcoin Path

It is common for Bitcoiners to face aggression and it will be up to each individual to determine how they will handle it. There is essentially no right or wrong way, but just what we can tolerate or allow based on our own beliefs.

But this shouldn’t disillusion people from participating fully in Bitcoin — the future is still brighter than ever and we must remain strong. We should not sacrifice our ability to engage in neighborly behavior (either by retreating to citadels or otherwise) while upholding our code of honor and ethical standards. We should not give space for those who seek to sow hostilities among us, because that will directly accelerate us to the path of violence. We should stand by our friends, brothers and sisters in arms, as we seek a path ahead, as Bitcoin slowly changes the world for the ultimate better. Bitcoiners are ultimately diverse and united in their goals; petty agendas should not serve as the basis of long-lasting hostile disagreement.

In the end, some governments will likely make desperate attempts to halt Bitcoin in its terminal progress toward fulfilling its destiny, and if that were to happen, Bitcoiners will have to unite for the last time before their social organization structure becomes obsolete. That would then become part of human history as the greatest revolution that mankind has ever managed to pull off in the face of overwhelming opposition.

So, remember: Bitcoin held in the wrong hands can be a dangerous weapon, but in the right ones, it’s a tool that can establish long-lasting peace that will serve as the foundation of the future.

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

The post A World To Come appeared first on Bitcoin Magazine.

Source: Bitcoin magazine

Crypto News Updates

2020 Was The Beginning Of Real Volatility

2020 was unforgettable, especially for Bitcoin. To help memorialize this year for our readers, we asked our network of contributors to reflect on Bitcoin’s price action, technological development, community growth and more in 2020, and to reflect on what all of this might mean for 2021. These writers responded with a collection of thoughtful and thought-provoking articles. Click here to read all of the stories from our End Of Year 2020 Series.

It was not the year we wanted, looking back at the past 365 days. It started off well, but as the hard reality started kicking in, the worse it got.

I was just a few weeks back from Germany after a trip to visit a few fellow Bitcoiners when the new year brought news of an unknown infectious pneumonia virus spreading in the Chinese Mainland city of Wuhan. I was still able to attend a Guns n’ Bitcoin Meetup in Switzerland before the world started changing, perhaps permanently. 

As they say, “gradually, then suddenly” all of these fancy trips came to a stop. I thought nobody could stop Bitcoiners from meeting up, discussing their views with each other and organizing in meatspace, until the World Economic Forum’s “New Normal” arrived. (Remember that phrase: You will own nothing, and you will be happy. Right.)

The “New Normal”

The world economy went off the rails and started crashing amid a financial panic. A few months later, the bitcoin price witnessed a yearly low at around $4,600 and then a new all-time high in the same year, showing that bitcoin itself is resilient to natural disasters, even if higher volatility occurs during such a crisis.

2020 unveiled the evil side of monetary nationalism and centrally-managed monetary policy. The United States Federal Reserve Bank inflated the U.S. dollar, with the New York Fed distributing more than $9 trillion in bailouts and printing tremendous amounts of money. It created wealth out of thin air for banks and for itself to purchase bonds and other financial junk products to inflate its own balance sheets, moves that were reminiscent of similar actions taken during the 2008 financial crisis, when the U.S. Government placed Freddie Mac and Fannie Mae under a conservatorship. (Fannie Mae and Freddie Mac are government-sponsored real estate financiers and investment entities which control over $3 trillion worth of assets, and this federal conservatorship remains in place today.)

You might have noticed that there are more people now out of work in the U.S. than at the start of the year, but they are virtually invisible and the stock market keeps reaching new all-time highs. The latter fact is largely due to the money printing and the U.S. government practice of acquiring stocks and bonds on the market, pumping up the price of these assets, stocks and bonds. The Fed is pumping everything.

For Bitcoiners, this year was a challenge as well. Our organizational structure changed and those who were more likely to go to conferences had to adjust to the year of restrictions. Anyone wanting to collaborate moved to the uncomfortable realm of Zoom and Jitsi — the luckier ones who have a VR Headset can enjoy AltspaceVR or VRChat. (Seriously guys, have you never heard of Second Life?)

And now, the biggest shocker of the year, the win of the 2020 Presidential Election by Joe Biden. Our American comrades can now expect the further acceleration of the breakdown of societal norms. More lockdowns will be coming and more people will be losing their jobs soon.

We were already living in a world that was seeking to control us, but now the virus gave it an excuse to overstep its legal boundaries and attempt to “protect us” by introducing these restrictions, and the forced acquiring of ownership in companies and other institutions with the printing of money that the Federal Reserve is doing today. It was just a matter of time for the evil to show its true face, and it is happening today exactly as many predicted it would.

It is important to understand that we were already living in an unstable world that was ridden with social injustice established by the U.S. Federal Reserve. But now, these factors have forced many millions of Americans to steer off the path of being “American” and instead turn into leftist Marxists who are currently trying to gain control over the United States. This is one of the problems that we are unable to fix as long as central banking monetary policy remains in place, further driving away those who are betrayed by the system toward socialism and communism.

Bitcoin As The Balance

If we want to survive the years coming ahead, we must start educating people about the importance of personal finance and the importance of the avoidance of inflation at all costs. Without this, we will have a bleak future where another Civil War might be on the horizon which will pit the totalitarian communists against the capitalist libertarians.

But for now, things are looking stable. After the virus is long gone, we will have more challenges facing us, more and more complex matters that will have to be solved, like Bitcoin privacy, KYC, mining pools and the Travel Rule. The privacy war is right in front of us, and it is going to be the most devastating chapter of civil wars in the history of Bitcoin.

As we are slowly approaching the activation of Taproot, privacy will considerably improve and will allow the Lightning Network to keep developing further.

But there are those who are against the Lightning Network because their interest lay in on-chain infrastructure development that is slowly threatened by the increasing fee market. Many would love to see Bitcoin fail and we must draw the red line there and stick to our principles and continue to defend Bitcoin, even if it doesn’t need our help or anything from us at all.

Today, we can see that there is a renewed interest in acquiring bitcoin in the retail space, precoiners are arriving and their curiosity-driven interest is seeking out connections. It is just a matter of time before more people arrive into our line of sight and begin consuming our communications on Twitter, Reddit and Telegram. These people will be less understanding of Bitcoin, they will likely be seeking out the thrills of profit, but since this is the survival of the fittest, only those who have the capability to seek out why things are like this in the world today will stay and learn. These newcomers will learn about Bitcoin, perhaps they will be ill-equipped and have coins stored on custodial exchanges, but we must be tolerant toward those who are just “exposed” to BTC in this way and attempt to steer them to become real users.

The world around us is slowly turning dystopian, the more we allow national central banks to continue to inflate their currencies, the more unstable the world will start to become. I don’t wish to go into speculation about the future, since the outcome of it can be totally unexpected. But I know for sure that the fight is not finished yet.

We must maintain our vigilance and personal integrity if we wish to function as full members of the new world order’s society that Bitcoiners are building right now. We must band together with others, strengthen those bonds and continue to organize. Trust right now might be shambolic but, believe it or not, good will and determination will get us far into our destiny.

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

The post 2020 Was The Beginning Of Real Volatility appeared first on Bitcoin Magazine.

Source: Bitcoin magazine