TORONTO, September 9, 2014 – Many bitcoin optimists “predict that a faster pace of innovation in the bitcoin ecosystem will eventually allow bitcoin-based payment services to outcompete conventional payment technologies,” wrote Timothy Lee in his recent article “Why I’m investing in bitcoins” for Vox.
As bitcoin and its many copycats are on a digital platform, they tend to have many advantages. Innovation should eventually give this form of money a clear advantage over money determined by central banks.
Bitcoin promoters have not only induced companies to accept bitcoins, but now have two countries, Dominica and Ecuador, in which to carry out their experiment to prove that their vision is plausible.
The simplest answer is in the economy. Bitcoin was created as an alternative to the dollar and other fiat currencies.
The Dow Jones is in record territory, corporate profits are a bright light. In real terms, the global middle class is rising. Corporations target profits, and a diminishing middle class in North America is more than compensated for with a rising middle class in China, India, Brazil and other countries with serious economic designs.
We should not be surprised, then, that corporations operating globally are making record profits while America has the lowest labor participation rates in generations, worsened by the fact that most of the jobs currently being created are not full time. This gives the appearance, however, of a steady dollar, the currency of international trade.
The importance of the dollar is beyond oil, which characterized the currency’s weight in the 1970s. Trade is so much bigger now, encompassing manufactured goods and services. It is also global: When Kenya buys a good manufactured in China they pay in US dollars.
Bitcoin analyst Joon Ian Wong talks of the classic supply and demand scenario. More bitcoins are being mined than are demanded, hence the steady fall in the price. Wong comments that “with bitcoin supply growing from miner and merchant sales, demand for the digital currency has to be taken up by consumers.”
Citi, however, doesn’t see this happening, due to international trade and confidence in the dollar as the currency of that trade.
Though the modern justification for the existence of central banks is to ensure healthy economies, the reality is that they are created to serve banks. They are the bankers of last resort as they can just print the money for banks in a crises. From an elitist view, this is natural. Central bankers are presumed to be more enlightened than the mass of humanity, and the banking systems they control must be protected from their own folly to aide the progression of humanity: the ultimate trickle down economics.
However, those who purport to maintain freedom by protecting banks from market forces know this to be an evil.
Though simply fighting the evils of the limitless printing of money, a technique that the elite believe they have perfected, central bankers remain confident that even with the lowest labor participation in generations they are doing an excellent job. After all, their wealth keeps hitting new highs.
Bitcoin and its copycats, on the other hand, are a challenge to the current monetary order. One hopes that bitcoin represents a bigger battle than merely countering the current monetary order; namely, the idea that society acts as one when society, not the elites, decides who plays the key role in reviving a moribund economy. This can only be accomplished, however, through the free market.
Accepting the free market means you humbly accept the limits of your abilities. You don’t block those possessing better abilities in order to steal what should be their reward. Only a genuinely free market guarantees that elite classes can never be protected by a legal system rigged in their favor that gives them undue influence.
In a truly free market economy, as opposed to one run by often self-appointed oligarchs, the resulting culture would be consist of free minds. A free mind can accept that mathematics is one of the universal languages for communicating with other humans, not the elitist view that humans must be too inferior to understand mathematics for their model to work.
Such attitudes discourage humans from free thinking, preferring to think for you.
The weakness of the current model that is being passed off as the “free market” – one that many prefer to call corporatism, cronyism or just simply fascism – is that it worked only in the decades following World War II when only the West was developed. This comfortable system was shaken by the rise of Japan, complicated by the Asian tigers, and has been exposed for the fraud it is by the rise of China, India, and Brazil. Low labor participation in the West, and particularly in the US, indicates the rise of a permanent underclass as well as the displacement and destruction of the middle class.
The bitcoin adoption by entire countries dissolves the elitism of the money lenders, but does not dissolve elitism itself. Monarchs, Popes, and others have over-taxed people and made laws to relegate people to certain categories because of birth not ability, even when gold was the solid basis for national currencies.
Freedom has many pillars, real money is one of them. Serfdom existed side by side with real money. Even if a country like Zimbabwe adopted real money, with its counterproductive economic policies still in place, it will go nowhere. Increased global development has shown the weakness’s of cronyism masquerading as freedom.
To prepare for the advent of freedom, it is important to understand that the coming of bitcoin, or adoption of other money that the government cannot print for the benefit of the elite minority, is only one part of the picture.
We must continue to focus on the rights of humans, the right to protect one’s life, property, community, to be treated equally by the law, to have the right of private property and a culture of freedom. Otherwise, society will be held back by elitism that to survive creates warring factions within the society, splitting that society with inevitably disastrous results.Click here for reuse options!
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