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Bitcoin: The Economic Enlightenment

I've been reading The Beginning of Infinity by David Deutsch and he opens the book discussing the Age of Enlightenment. Enlightenment was an era characterized by the search of good explanations. Very little scientific or societal advancement was accomplished by generations of humans prior to the Enlightenment, however these "good explanations" allowed humans to establish the foundations of modern day science. The Enlightenment era roughly lasted from 1715-1789 and these are the major advancements that have occurred since:

  • The Scientific Revolution

  • Age of Revolution (Monarchies --> Democratic Republics)

  • The Industrial Revolution

  • The Information Age (present)

An important characteristic of the Enlightenment is the rejection of the idea that theories need to be justified by people of authority. Instead of justification from authority, Deutsch says a "tradition of criticism" is required to test the validity of a theory. A tradition of criticism is extremely important because it allows people to question ideas that are unprovable -- such as the notion that Earth is the center of the universe.

Thanks to the internet, a tradition of criticism is now omnipresent. We can participate in open discussions using platforms like Twitter or Reddit while innovative new platforms are still popping up frequently like TikTok and Clubhouse. Wouldn't it make sense for a currency to live on the internet and be controlled by the critics rather than by shady officials? Something to think about.

Let's think back to the Enlightenment for a second. It sparked a chain reaction that brought along new technologies and ideas that rapidly replaced previous ones. Enlightenment sparked The Scientific Revolution because humans finally began developing science based on deductive reasoning. During the Age of Revolution, Monarchies were largely replaced by Democratic Republics. In the Industrial Revolution, humans figured out how to produce mass quantities of products, resulting in majorly agrarian economies transforming into industrial economies. Also note that each of these ages lasted roughly 100-150 years.

Since 1971 we have been in the Information Age and based off of previous history we can reasonably assume this era is somewhere between 33-50% of the way complete. This being said, I want to make the case for Bitcoin (including crypto as a whole) as being a focal point in humanity's next societal revolution, the Economic Enlightenment.

The Information Age

What are we currently seeing in the Information Age?

  • Rapid transformation from physical to digital

  • Brick and mortar businesses --> E-commerce

  • Physical money --> Digital assets

  • Emergence of AR/VR

  • Distrust in traditional authorities

  • Lack of transparency

  • Overstepping boundaries

Remember how the Industrial Revolution completely changed the primary source of countries' economic activity? This happened because people found a more efficient way to create products with value. Through rapid digitization & distributed networks, humans are now able to create infinite value using code. As the digital economy grows, we will see an increased capacity for people to make a living using nothing more than their computer and an internet connection.

It's 2021. We have seen great minds like Elon Musk, Mark Cuban, Jack Dorsey, and many other objectively intelligent people embrace the importance that Bitcoin brings to society. I highly encourage you to do the research to understand how Bitcoin works; but if that's too much effort for you - you can at least take Elon's word for it.

The Reset

If you truly understand how Bitcoin works, you understand that it cannot be shut down by governments. There is a legitimate concern that some countries might try to ban Bitcoin in order to maintain power over their currency. This is the most common argument I hear:

"What if governments ban companies from accepting Bitcoin payments?"

Bitcoin is a global currency. It would require every single government on earth to ban Bitcoin for this idea to become a possibility. As unlikely as this would be, countries would actually be incentivized NOT to ban Bitcoin if others banned it. For example: Companies that transact using Bitcoin would simply relocate to a Bitcoin-friendly country, which would subsequently begin generating wealth for that new country's economy.

Let's imagine the original plan was successful and now, in an instant, every single country has banned Bitcoin and cryptocurrencies as a whole. OK great. This is actually the best case scenario for the Economic Enlightenment.

What happens next is... nothing, really. Miners will continue mining to generate income and keep the networks running. As long as the global power grid is still up, shutting down crypto is not feasible. Those who do not truly believe in crypto will abandon ship and forever be stuck inside a monetary system that leaves them powerless. (In today's society, I define the word "power" as votes and I define the word "votes" as money.) If we redefine money, we can redistribute power to the areas that we -- the people -- find most important/beneficial. Bitcoin is the perfect vehicle to facilitate this shift due to its built-in transparency.

The Enlightenment

The Enlightenment began when people started rejecting the ideas that authority perpetuated for generations. The US Dollar is accepted by Americans is because most do not question the idea that the Federal Reserve should have control of their currency. Until 2009 we were unable to question whether the Federal Reserve should control the monetary system because we did not have an answer to the question. Bitcoin is a good explanation to fix the shortcomings of fiat currencies -- which have been around since the 11th century without a single successful implementation.

To finish my Economic Enlightenment scenario from earlier, the crypto-believers would have the following options for generating income:

  • Mining

  • Staking

  • Trading/Investing

  • Creating content

  • Media/Blogging

  • NFTs

  • LP Providing/Yield Farming

  • Peer-to-peer payments

All of these options allow individuals to be economically self-sufficient using nothing other than a computer with an internet connection. To me, this is the next logical advancement in society. Similar to how people took the voting power from monarchs, today we have the opportunity to do this with money and create a more efficient/fair system.

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