The True Meaning Behind Bitcoin

In this post I'll share with you a neat little fact about bitcoin, before transitioning into a little rant about people's lack of understanding about what bitcoin is.

Satoshi Nakamoto, the person or persons who created bitcoin, captured the true meaning behind bitcoin in the very first transaction to ever take place. On January 3, 2009 the first event on the Bitcoin blockchain occured. On that day the London Times ran a cover styory with the title "Chancellor on Brink of Second Bailout for Banks". This title was quoted in the very first transaction ever to be included in the Bitcoin blockchain. The block containing this first transaction is called "The Genesis Block." And with the embedding of that headline the true meaning behind Bitcoin was engraved in the blockchain: ending the control of the corrupt centralized system of banks and governments over your money.

There's a website dedicated to the January 3, 2009 edition of the London Times, and if we can believe what it says, a verified copy of that newspaper is now worth a lot of money. So, if you by any chance have a copy of that edition of the London Times, visit thetimes03jan2009.com where specimens of this newspaper are sold for anywhere between $700,000 and $1.3 million USD. According to the site, only 8 verified copies of this newspaper exist, and under the heading "Is the price justifiable?" it says:

"Far more common Casascius Coins have been sold on eBay for $10,000. There were 1,300 of that coin created.

These newspapers are exceptionally more rare, and have much greater significance. Bitcoin is a world-wide financial paradigm shift. Given the opportunity to come to fruition, it is poised to be recognized as a new world reserve currency that entire nation-states may rely on."

Now that you're all informed about this little known factoid about our favorite cryptocurrency, I'd like to shift attention to Matt Stoller, a fellow at the Open Markets Institute, a contributor to The New York Times, The Washington Post, The New Republic, Vice, and Salon, as well as the author of Goliath: The Hundred Year War Between Monopoly Power and Democracy. In the book Matt Stoller explains how, in the 1930s, people observed that the Great Depression was caused by financial concentration in the hands of a few whose misuse of their power induced a financial collapse, and how this concentration of financial power poses a threat to democracy itself. So far I have nothing negative to say about Stoller. That is until he starts blabbing his mouth of about Bitcoin and cryptocurrencies...

It's disheartening to see a fairly well known and respected writer and commentator, who knows all about the dangers of the centralisation of financial power, display such poor understanding about the future of money. You can watch and listen to him in the below linked video, or you can read his latest article titled "Cryptocurrencies: A Necessary Scam?" And when you do, keep in mind that this man worked in the US House of Representatives on financial services policy, including Dodd-Frank, the Federal Reserve, and the foreclosure crisis. That's astounding; they let anyone work for government these days...

Stoller starts out with an interesting theory, one that I can't fault; he asserts that many people are drawn to cryptocurrencies because they've lost all trust in government and the Central Bank, especially after the latest global financial meltdown of 2008. Here's his opinion on cryptocurrencies, one that's still shared by too many people, in a nutshell:

"I think it’s a social movement based on a dangerous get-rich-quick scam. But there’s a tremendous amount of goodwill involved, and as with GameStop, the underlying driver of the energy in this movement is mass and legitimate disillusionment with liberal institutions who have failed to deliver."

That's such nonsense. Reading the article, and listening to his comments in the video, it quickly becomes clear that he doesn't know what cryptocurrencies are, doesn't even know what money is. That becomes apparent when he says: "Cryptocurrencies are a social movement based on the belief that markings in a ledger on the internet have intrinsic value." No one who knows what money is believes that money has intrinsic value! Dollars don't have intrinsic value, so why does he think it's a problem that "markings in a ledger" don't have intrinsic value? Money can be literally anything, as long as we agree on what it is, whether it's a marked piece of paper or "markings on a ledger." Stoller is spreading misinformation about cryptocurrencies and makes the same accusations we already heard so often; that it's the money of criminals, dictators and scammers, and that it's being used for money-laundering:

"In other words, skeptics of cryptocurrencies generally believe that cryptocurrencies are easily manipulated mechanisms to launder money, commit fraud, evade sanctions, empower dictators, engage in heavily leveraged speculation prone to collapse, and ultimately break the state itself. The response to this concern is easy - exactly how is this accusation any different than the existing order?"

Please stop. At least in the interview two of the anchors point out some of his nonsense...

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