What are we doing here?

Unarticulated thoughts about the role bitcoin can play in the future of the world

The other day, I had a relatively lengthy conversation with a friend about war and bitcoin, and I thought it’d be best to put my thoughts down on paper — even if no one is reading this.

Around a month ago, Janet Yellen, United States Secretary of the Treasury, publicly stated that the “U.S. Can Absolutely’ Afford Two Wars.” She’s outright saying that the U.S. can turn on the money printer to fund Israel and Ukraine in their conflicts with Hamas and Russia, respectively.

The fact that the U.S. debt just topped $30 trillion and the fact that they need to pay a meager sum of the entire bitcoin market capitalization as their yearly interest payment while the Secretary of the U.S. Treasury is saying this really puts the dire situation of the U.S. dollar in perspective.

Back to the topic of war, though.

While I won’t comment on the nature of war and conflict or voice any political opinions, I do want to emphasize the relationship between unsound fiat “money” and war.

Throughout history, we’ve had varying levels, i.e., degrees of war.

We’ve had wars like the Mexican-American War (1846-1848) and larger-scale wars like World War I. Estimates suggest that around 13,000 American and approximately 25,000 Mexican soldiers died in the Mexican-American War, and estimates suggest that some 8,500,000 soldiers died as a result of wounds or disease during World War I, and as many as 13,000,000 civilians also died.

But the astonishing thing is that significantly more land changed hands in the Mexican-American War, even though the destruction, death, and suffering were far less than in World War I.

The difference?

During World War 1, the gold standard was abandoned and hence not followed, while a de facto gold standard was followed during the Mexican-American War.

On the gold standard, war was less likely to occur, and if it were to happen, it would often occur in barren, uninhabited land where specialized armies went to resolve disputes by fighting no more than for a few days at once.

This was because governments/rulers were constrained, i.e., held accountable, by the gold reserves they had backing their “money” with regard to how much financing they could pour into the wars. The only way to finance wars, apart from increasing gold reserves, was to raise taxes or issue war bonds, but the former was unpopular and the latter was usually inefficient and insufficient, and in this scenario, the population actually had a say over whether they went to war or not.

In today’s world, where a money printer is placed in the hands of the seemingly omnipotent, and in the context of the U.S., omnipresent governments, no longer is there a constraint on the financing of said wars, and no longer is there a say from the population over whether the country goes to war or not.

With fiat money, governments can arbitrarily engage in wars.

The state monopoly on money is the cause of so much of the conflict and death you see today, as well as the scale of the atrocious wars we've had previously.

It doesn’t stop there, though.

The “strongest” fiat money, like the U.S. dollar being debased over the years, is another culprit in today's conflict.

In a world with fiat money, where, if you’re lucky, your “money” loses “only” 96.17% of its purchasing power (even more if you look at today’s figures), an individual’s time preference increases (becomes higher, i.e., individuals discount the future more), simply because there’s no point of saving for the future when your savings are going to get eroded by war-mongering governments and lobbyists.

Even if your government doesn’t fall under this category, chances are that they are still finding a way to send the native currency to smithereens.

Just look at the hyperinflation in countries like Argentina and Venezuela, where prices in supermarkets change by the hour, and people who earn their living in these worthless currencies spend it right away since they know it won’t be worth much in the future anyway.

Imagine we had monetary problems like these during La Belle Époque, French for "The Beautiful Era," where everyone’s time preference was so high and there was no scope for capital accumulation due to fiat.

There would not be some of the greatest inventions that the world has ever seen, like the telecommunications networks that underpin the internet today.

Saifedean Ammous, in his book, The Bitcoin Standard, which I highly recommend reading if you haven’t already, talks about just this.

During periods when civilization was on sound monetary standards, like the gold standard, innovation took place at a groundbreaking rate, and peace and prosperity were prevalent throughout Europe, as evidenced by La Belle Époque. While today, with unsound government-issued paper, all the innovations are 1 to many instead of 0-1, which is the only way you get 1 to many.

History clearly justifies the case for sound money and depicts the atrocities that happened under unsound, easy money like fiat.

I’m not saying that peace, prosperity, and innovation can’t happen when there is no sound money; it’s just that in a world like today with the widespread adoption (which didn’t happen naturally but by force) of fiat money, people just don’t value the future as much anymore, and they stop accumulating capital, making long-term decisions, and instead focus on futile things, like wokeness and war.

This is not how civilization advanced.

Imagine what today's world would look like if our ancestors didn’t accumulate capital for the coming generations, didn’t invest in anything that would bear fruit in the long run, and instead just thought about war.

We’d be completely screwed.

That’s what the world is turning into now under fiat money, and when fiat gives so much power to governments, especially in the effort to finance war ad nauseam, the result is a decay of civilization and an uncertain future.

This is not something I want for myself or my family in the future.

I don’t want my wealth to be tied to these governments.

I don’t want my wealth to dissipate if my government decides to invade a country hundreds of miles away.

I don’t want to have my wealth taken away from me if another government decides to invade my country.

I want to be a self-sovereign individual who has the ability to preserve my wealth and think about my and my family's future.

Saying I’m an advocate for peace doesn’t make a difference and is just naive, since war is inevitable and has happened during times of relative monetary soundness too, but the monetary standard can affect the scale and casualties involved in these wars.

We can still have wars that don’t have the ability to be perpetually financed.

We can still put the decision to go to war back in the hands of the people.

We can still have the ability to save for the future, no matter what the government decides to do.

But we need to separate money and state first.

And this is where bitcoin comes in.

Bitcoin is the ability to take power away from governments and give it to ourselves.

In other words, bitcoin is the path to relative peace.

So while I can’t answer the question of what you are doing here in this world of 1s and 0s, I know why I’m here.

Until next time,

Imajinl