By Frank Karsten
Socrates is said to have said: “The secret of change is to focus all your energy on building the new and not on fighting the existing.”
So, if you want a different financial system, you should instead focus on the new one, which in my opinion is Bitcoin.
I must admit I made a mistake. In 2011, two years after the birth of Bitcoin, I was at the front of the line when people excitedly told about this new digital currency. At the time, a single coin only cost a few euros. Meanwhile, the price has increased a thousandfold to around 25,000 euros.
Although at the time I was eagerly looking forward to a stable alternative to the euro, I haughtily rejected this financial innovation. I thought it was a kind of play money, based on nothing, a toy for dreamers. Because how exactly can a series of characters, with which you can do nothing else, and a software system that can be copied by anyone have value?
Bitcoin is damn hard to understand. It is, to paraphrase Winston Churchill, a mystery wrapped in a mystery, inside an enigma. I had so many questions, objections and doubts. Now I am very excited about it. Not only because of its increase in value, but because I now (after many hours of study and discussion) understand its enormous benefits for people who want to protect their savings and increase their freedom.
People are rightly concerned about our financial system, CBDCs (central bank digital currency), financial privacy, high inflation, our pensions and savings. After all, our current currency system has several problems. We need to trust our central banks not to constantly print money and thus cause inflation. We need to trust our banks to hold sufficient reserves, not go bankrupt, and return our money when we want it.
We have to kindly request the bank to give us a bank account, because imagine us doing something they consider inappropriate! We have to hope that Visa, Mastercard and PayPal will allow our donations to vital action groups like Wikileaks. We need to trust our politicians not to block “inappropriate purchases” by so-called CBDCs. Politicians promise that they will defend the value of the euro and that they will respect our freedom and privacy, but their promise is usually only worth as much as a three euro banknote.
With Bitcoin you don’t have to rely on a big leader or company, because there is no leader, company or politician behind it at all. This cryptocurrency does not belong to anyone, just like the internet does not belong to anyone. Bitcoin is a public software operated by thousands of people and their computers around the world. All these machines jointly check the correctness of each payment.
Bitcoin takes power away from politicians, managers and banks and puts it in the hands of individuals. Bitcoin is money of freedom because no one can take it away from you. No one can simply produce more coins, and no one can block a payment.
Bitcoin can break the state monopoly on currency and ensure a separation between money and state, just like the separation between state and church. But the state and the banks don’t want to give up their fat cattle. Fortunately, this totally decentralized digital currency cannot be stopped by politicians. At most they can hinder it.
There are undoubtedly questions to be asked about all these statements. How can Bitcoin have value if it has no “intrinsic value” like gold? Can’t governments just ban Bitcoin? Isn’t Bitcoin a pyramid scheme? Isn’t it too late to step in?
In the upcoming articles, I will answer these questions and further explain why Bitcoin is so special and how it can increase freedom, prosperity and peace in the world. If we want to change the world, we must also change the money, and Bitcoin, in my opinion, offers that particular opportunity.
- Frank Karsten is founder of the MoreFreedom Foundation and co-founder of the Mises Institute Nederland.