Bitcoins Philosophy And Political Promise Of Borderlessnes And Solving Inefficiencies – Forbes

Bitcoin BTC is not just a decentralized peer-to-peer electronic cash system. Theres more. It is a new way of thinking about economics, philosophy, politics, human rights, and society.

Hungarian sculptors and creators Reka Gergely (L) and Tamas Gilly (R) pose next to the statue of ... [+] Satoshi Nakamoto, the mysterious inventor of the virtual currency bitcoin, after its unveiling at the Graphisoft Park in Budapest, on September 16, 2021. - Hungarian bitcoin enthusiasts unveiled a statue on September 16 in Budapest that they say is the first in the world to honour Satoshi Nakamoto, the mysterious inventor of the virtual currency. The bronze life-size sculpture depicts a hooded figure with stylised facial features, alluding to Nakamoto, a pseudonym credited as bitcoin's founder, but whose identity remains unknown. (Photo by ATTILA KISBENEDEK / AFP) (Photo by ATTILA KISBENEDEK/AFP via Getty Images)

Most of the literature I have read about bitcoin majorly focuses on it as a store of value, a medium of exchange, an investment vehicle, a shield against government overreach, and more. However, there is less literature about the philosophy of Bitcoin and the politics it represents.

Modern political systems have made it harder for individuals to focus on what they do. Besides working hard to create value and store that value for future use, the global citizen has to work twice as hard thinking about money and how it can be tweaked to preserve and/or grow value.

This is mainly because the political systems are anchored around the control of fiat money and cannot control the temptation to increase supply while the citizens bear the burden of increased inflation and cyclical recessions.

The average global citizen does not have complete freedom to do what they do best because they must divert their attention to the subject of money. They understand that inflation erodes their purchasing power over time and that they must devote a significant portion of their income to hiring money managers to invest their money.

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Alternatively, they actively invest their money in the markets, which is tedious and time-consuming. A larger proportion delegate the function by staking their money in financial institutions and financial instruments that rarely beat inflation.

What if there was an efficient store of value? Would this make the global citizen free to focus on value creation in whatever they do best?

In my opinion, Bitcoin's philosophy is based on freedom and borderlessness. If it eventually acts as a stable store of value, which it has achieved over a 4-year time horizon and failed under that time horizon, the global citizen will have more freedom to focus on what they do best without handing over control to a third party or spending significant time managing their store of value.

Bitcoin is borderless. It cruises through multiple jurisdictions and perhaps planets, well, if Elon Musk's mission succeeds. It presents a strong case for solving global inefficiencies associated with different states using different fiat currencies of varying quality.

For instance, the emigration problem, where people living in countries where there is bad money move to countries with perceived better money, can be evened out with bitcoin adoption. For people working in the digital space, cryptocurrency payments (not just bitcoin) have begun to solve the income inequality problem. Developers, content creators, artists, and other online workers have begun to close the pay gap regardless of where they are located.

In Bitcoins philosophy, an individuals country of birth or residence should not dictate their economic outcome. When they work hard to create value, they should be able to store and build value on a relatively fair playground. A truck driver in a country like Nigeria should have a similar level of financial outcome to a truck driver in, say, the UK. The value created should be borderless.

The inefficiencies resulting from the different quality of fiat currencies and government systems should be solved with wider bitcoin adoption. For instance, an investor looking to invest in a coffee shop in a busy city like New York or Nairobi should find it easier to allocate capital to either without worrying about the influence of the fiat currency used in the two jurisdictions or the governance systems that apply. Bitcoin makes it possible to invest borderlessly without the headwinds associated with traditional financial institutions and systems.

In Zimbabwe, annual inflation was over 250% in July, and the central bank raised interest rates to 200% to combat the high inflation. What type of business can thrive in such an environment? I am confident that there are great businesses in Zimbabwe that solve critical societal problems, and they deserve to be able to access finance at competitive rates. As a result, they would price their products more competitively, resulting in lower inflation.

The lack of political influence on bitcoins supply makes it the hardest asset on earth. This means that, as adoption grows, the value goes higher since supply is capped. This eliminates the possibility that political elites could print more like they do with fiat currencies leading to hyperinflation and later recessions. It also makes Bitcoin a trusted store of value and medium of exchange. Where am I going with this?

With wider institutional adoption, the political promise of Bitcoin is solving inefficiencies. For instance, according to the United Nations, the world produces sufficient food to feed all humanity. However, the wastage and inefficiencies in storage and distribution leave an estimated 800 million people hungry or malnourished.

For instance, with Bitcoins borderlessness, investments can be made in regions where there is excess food production at lower costs to improve standards, storage, and distribution channels. This would reduce food wastage and lower food costs across the world. However, the current financial systems make it harder due to taxation, currency devaluation, and poor access to financing.

This promise of borderlessness is already being experienced in energy production and distribution. Bitcoin miners are investing in regions that have excess power production at low costs and redistributing this value in other areas. In addition, some miners are acting as grid stabilizers where they consume excess energy when demand is low and switch off when demand is high thereby helping power producers earn value during both high-demand and low-demand grid cycles.

At a macro level, the capitalist Keynesian system that led to central banks printing trillions of cash during the pandemic led to the current high inflation environment that we are experiencing today. Though it helped people survive, to a degree, during the pandemic, the spillover effects have led to the poor people becoming poorer and the rich getting richer.

The Bitcoin plebs that understand its philosophy have been accumulating Satoshis at lower valuations since they understand the fundamentals. They are able to store value in peace while focusing on doing what they do best. They are not worried that the FED is going to reverse course and print more dollars thereby devaluing their stored value. They have become sovereign individuals.

In my article about how Bitcoin is helping people become sovereign individuals, I explained the issue of borderlessness when it comes to spending your value, storing, and achieving a level playing ground for everyone.

Disclosure: I own bitcoin and other cryptocurrencies.

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Bitcoins Philosophy And Political Promise Of Borderlessnes And Solving Inefficiencies - Forbes