The Philosophy of Money and
The Moral Impacts of a Bitcoin Standard
Money makes the world go round. Of course not literally and a better form of phrasing this sentence is: People make money go around the world. It is people that use money, to trade all around the world.
People create wealth in all sorts of ways and money is simply a technology to express, distribute and store that wealth. Talking about money nowadays is taboo but it is such an important subject to discuss and understand. With anything in life, knowledge is power. So let’s gain some knowledge.
What is money?
- Medium of Exchange
- Unit of Account
- Store of Value
Besides the technological checklist shown above it’s also important to know what money is from a philosophical standpoint. Money is our valuable time, energy, and talent.
Using seashells as money when you live near the sea is not such a good idea. Though seashells can be used as a Medium of Exchange, Unit of Account, they are Durable enough, Divisible, and Fungible by size or color, they are very Portable.
But when it comes to Store of Value they do not work! Since anyone can just walk up to the beach and collect a bunch of seashells, they hold no value. It takes almost no time, energy and talent to collect money in the form of seashells.
If you live in the mountains and there is no sea around, in theory, you could use seashells. In practice, ask yourself the following question: What would you do if you knew there was a village in the mountains where you can buy everything the village produces with seashells?
From the seashell example, you can conclude that money automatically is valued at the amount of time, energy, and talent that is needed to create that money. To answer the question from the last paragraph: It is only a matter of time until someone cheats the monetary system from the mountain village and buys up all the valuable products with the collected/printed money found on the beach.
How can Bitcoin help?
Living in the digital age, we can spend money anywhere with Apple Pay, buy everything on Amazon and, even trade BTC Options through Bitlevex, all from the convenience of our phones. It is easy to see that the technologies around money have come a long way since the time we were using seashells.
Unfortunately, the fiat money we use today is still much like the seashell example. When money can just be printed or collected from the beach only the ones who have the power to print/collect are benefitting from this system. When eventually the rest of the people stop accepting the monopoly money the whole system collapses, leaving most of the people with piles of seashells/fiat and some of the people with all the valuable assets.
Bitcoin however is different.
The only way to create Bitcoin is to spend time, energy, and talent through its mining process. Simply said, on a Bitcoin standard there is no way to cheat to create wealth. If there is no way to cheat, people will use their time, energy, and talent more efficiently to help each other since that is in the best interest of everyone involved.
Bitcoin has a limited supply of 21.000.000 coins and 1 BTC can be divided into 100.000.000 Satoshis. This brings a scarce element into the monetary system of Bitcoin. It is this scarcity that is crucial for money to be a good Store of Value. If money holds its value for a long period of time people are incentivized to care more about the future. This means they want to use their time, energy, and talent more wisely. If you know that the money you worked really hard for loses its value over time you would want to spend it as quickly as possible, or not even bother trying to earn it. But if your money holds or increases in value every year you are much more inclined to work your ass off and save as much as possible. Although this might have been impossible for a long time, on a Bitcoin standard it is.
When people come together and use their individual qualities collectively the results have always been spectacular. With Bitcoin as the standard form of money, life will be prosperous and humanity will thrive. To be arguing against evolution and technology is not only a waste of money it is a waste of talent, energy, and time.