Once you have seen and read for a while about Bitcoin, the link between itself and libertarianism is impossible to deny. For reasons that I only partly understand, bitcoins seem to have built an early fan base with people that are very committed to freedom.
As best I can tell, this is because of a conspiracy theory about the way the Federal Reserve works in the United States. I’m sure like many people, I have watched a couple of videos online that explain just how terrible and evil the Fed really is and how it’s founding and structure was designed to build debt into the American way of life. I am not sure I believe them. In reality, the truth is normally somewhere in between the two extremes, so my presumption is that there are parts of their theory that are correct and that makes it possible to highlight other parts as being dastardly Machiavellian.
Bitcoin, Fiat Currency And Conspiracy Theories
The link between these conspiracy theories and Bitcoin is debt. The conspiracy theorists believe (possibly correctly) that the entire economic system is created to enslave us all in debt forcing us to work hard throughout our lives. On the other hand, Bitcoin has virtually zero debt in the system. For a long time it was not even possible to buy using a credit card, so there was literally no debt in BTC. If you believe that the role of the Federal Reserve is to enslave us all, then a currency that is debt free has lots of appeal.
A different but related strand worries about the way that government’s borrow money in the modern world to pay for, well, everything really… Once again, with no debt in the system, bitcoins resemble gold more than they resemble the US dollar. This means that anyone that philosophically dislikes fiat currency can find a home in Bitcoin or any of the other crypto currency communities.
Bitcoin Is Distributed
The design of the entire system means that anyone, anywhere in the world, can potentially be involved. They need to have the right knowledge and hardware, but geography is only a constraint if you cannot access the web. The result has been that there have been developments around the world and the speed of adoption is different everywhere. For example, in 2016 as I write this, there are believed to be 10 main mining operations, that account for 80% or more of the total capacity. I have read that eight of those are independent operations in China. A few years ago you probably would not have predicted that, but that is what has happened.
This distribution means that no government can control it. For example, if the Chinese government stepped in to shut down those miners, you can bet that new locations will launch in other countries quite quickly. There are full nodes in operation in many cities and countries. There are major owners of coins in many different countries. And importantly, the (lack of) speed and flexibility of most governments has prevented them from getting in early, so almost everything is in private hands in one way or another.
Bitcoin And Information Freedom
If you have read anything about the early days of the web, then it becomes clear that many internet pioneers had a deep desire to make information available and organised. All of it. All information, with few or no secrets. This is a noble, but partly unrealistic goal.
Needless to say, if you have dreams and goals like this, then subjects like fiat currency are likely to be quite annoying to you. This is likely to be one of the reasons why crypto currencies were able to get early support in the tech and developer communities.
Bitcoin, Liberty And Crime
From there, of course, the quasi anonymity of Bitcoin attracted criminals and the Silk Road and all that came from and around it (described here). That helped to bring a bad reputation, which has mostly been shaken off now as more and more legitimate institutions look for ways to work with and use the blockchain and Bitcoin. The future for smart contracts looks very bright.
Needless to say, you cannot hold a currency accountable for the actions of bad people when they use it. If that were the case, then the US dollar would be the “responsible” for all manner of awful crimes around the world. Whilst it might be possible to hold bankers accountable for helping to launder and move money, you can’t blame the money itself.
Bitcoin And Financial Freedom
Lastly, the advance of the price of Bitcoin has provided the very early adopters with substantial wealth. This provides it’s own level of very real freedom that can be used to enforce and enhance the rest of the system. Some of the earliest miners now (only a few years later) have fortunes in the tens of millions of dollars. If that doesn’t enhance your feeling of independence, nothing will!
Your author knows two people like this. Both found the idea of BTC interesting and worked hard to get involved in the early days. It really was hard to get involved then – you had to have some technical skills. Both bought some coins to learn more and mined coins for some months (when an ordinary computer could solve the problems). Both accumulated several thousand coins – now worth multiple millions of pounds, euros or dollars. It happened largely by accident for them both.
Whether people that joined the revolution later, like me, or you (?) will also become rich, who knows? There is still the chance, but the biggest price gains are probably now in the past.