9 April 2013

Bitcoin Will Fix Our Broken Society

I tried to buy Bitcon in early 2012 for around R150 for 1 Bitcoin. I was prepared to buy around 20 Bitcoin at the time. Despite my best effort i was unable to get hold of them because Bitcoin exchanges don't accept credit cards and my bank refused to process the international transaction without a personalised invoice from the Bitcoin exchange. So i left it at that, hoping Bitcoin would become more accessible as time passed.

Those 20 coins would have cost me around R3000 back then and just over a year later would be worth around R35000. The reason i was unable to get hold of Bitcoin is the very same reason i wanted to get hold of it in the first place. I was less interested in prospecting, although i knew the deflationary currency's value would grow. The real reason i wanted Bitcoin was because i currently do not have complete freedom to use my money as i please because of imposed restrictions and regulations. The free market system is dependant on competition for efficiency but it's very own lifeblood; money, is issued, regulated and controlled by a single entity. We are fools to put up with this.

The free market system is an ideal just like any other, as soon as you start bending the rules, the ideal breaks down and those in power take advantage of their position. It's not that the corrupt find their way into power but rather that power itself corrupts. Fortunately for those of us not in power, the free market system has some cannibalistic loopholes, one of which is exploited by decentralising the medium of exchange.

Up until now bringing worth to something essentially worthless was exclusively the domain of currency authorities and it was thought that a worthless currency can only have fabricated worth if a central authority declares it's worth. Therefore, the authority of a central bank was thought to be unchallengeable. Those who control the currency authority control the people, all that's left is to keep the people distracted and invest generously in a military. That power structure held firm until the information era came along.

Copyrights and patents are now the last line of defence for an outdated ideology. Having the largest military in the world is useless if you do not control information. The GNU Public License exploits a second loophole of the free market system by upholding the right of intellectual property owners to place restrictions on their original works. The restriction in the case of the GPL is freedom; one may not place other restrictions on anyone making derivatives of your GPL protected works except for the recursive continuation of the GPL or compatible license. Once a copyrighted work has been made free, it remains free throughout it's evolution and this freedom cannot be challenged without causing harm to the very copyright system that stands as the last line of defence.

Bitcoin uses both of the above mentioned exploits; it's decentralised and protected by the GPL. Bitcoin is both deflationary and liquid which contributes to it's appeal. Transactions are processed by decentralised "Bitcoin miners" rather than a banking system. The downside to this is that transactions cannot be reversed, this poses a danger to the buyer. However, this could also give the buyer more control because a merchant must ensure that the buyer is absolutely satisfied before payment will be made.

Bitcoin or some derivative cryptocurrency will be the last medium of exchange we will ever need because the world we are entering is one where competition is unnecessary. We will have the technology to provide the necessities for every human being on Earth without placing any obligations on them. We will have the collaborative tools to finally implement real democracy and eradicate representative democracy which is nothing more than a means of distraction. Poverty and inequality will be eradicated and the concept of ownership will also be decentralised to organs of society which themselves are orchestrated by a decentralised democratic conglomerate.