Decentralized Globalization with Cryptocurrencies


Today, Western democracies are cool. They are liberal, so they can't do colonialism the way they used to at the end of a bayonet. Not for the most part, Colonialism is now more subtle.

It is wrapped in a nice little package we just call "competitive commerce," globalization, open borders.

Globalization, as it is understood and practiced is nothing more than good old fashioned colonialism.

Only now it is not delivered with explicit force but through financial embargoes and controls.

It is delivered with subtle coercion, where they imply that if you don't play along with the games, you will be cut off from the U.S. dollar, from the SWIFT network, from the IMF, from international commerce.

Globalization is currently not something that you and I really participate in; it is something multinational companies and powerful countries use to set themselves outside of the law to arbitrage between jurisdictions, to shop around for the most convenient, corruptible, low-tax environments where they can deliver financial colonialism wrapped as globalization.

Globalization has a negative connotation among most people.

To the average person, it comes in the form of lawless corporations, exploitation and tarrifs.

Cryptocurrencies change the nature of globalization from something that is centralized and only available to the most powerful, disinterested and distanced corporations into something accessible to you directly as individuals.

Not all of us for the time being, just a few of us who are fortunate enough to have the education, the access and capital to participate.

But every day more and more people can use cryptocurrencies to achieve a decentralized form of globalization, one that allows the average individual to shop around for jurisdictionsand arbitrage between currencies and pick the law that serves their interests.

Until now, the only way individuals could take advantage of globalization was to physically move.

Someone would leave their country, take their family across borders and into another country where they are not welcomed but treated as second-class citizens and discriminated against.

The only reason why someone would do that is desperation, survival. Globalization means refugees.

But what if you could leave your currency system without even leaving your country?

What if you could become an international participant in commerce without even leaving your country?

What if you could become a multi-national corporation of one person?

I know that may sound ridiculous but part of the reason governments, in many cases are opposed to cryptocurrencies is because of the power it gives to individuals, the power to behave like multi-national corporations.

When governments say, "If everyone has access to cryptocurrencies, they won't pay taxes."

You should ask them, "What about all of the multi-national companies that didn't pay their taxes?"

"You didn't seem so concerned about them until now." Now that everyone can do it, it is a problem?

"If individuals can move their money, they won't be subject to our controls."

Rich people and multi-national corporations can already do that. You weren't in the Panama Papers but other people were. You may have noticed, there weren't that many Americans in the Panama Papers. That is because one of the world's greatest tax havens is the United States.

Americans don't need to go to Panama for offshore capabilities. They can go to Nevada.

As long as they are rich enough to afford the lawyers and accountants who will set up their company to take advantage of globalization right at home.

Cryptocurrencies are scary to governments because they empower the individual with the same capabilities, the ability to acquire superpowers through the application of technology.

We don't fully appreciate the historical impact of technology in those terms.

Today lots of people are filming with smartphones. Fifty years ago, the idea of an individual carrying a television studio with international broadcasting in their pocket would be a superpower.

You would have made a superhero movie around the idea that you could pull out a small device and make a video call was something you would only see in Star Trek fifty years ago.

The ability of an individual to wire money across the globe in seconds and convert between currencies as if they are some kind of New York stock broker, is now possible in a village in Guatemala using a solar panel and a $20 Android phone.

Make no mistake, that is a superpower. The person in the village who has that superpower is a superhero.

They can even fit for justice, like Superman or Spiderman, on behalf of the people around them.

There are places in the world where people don't have access to clean water but they do have a smartphone or feature phone.

As the prices of smartphones decline, those capabilities come into the hands of more and more people.

We are on the cusp of something very important.
We hold a communications device while cryptocurrencies have turned money into a protocol which turns every communications device not into a potential bank account, but a banking system.
When you have a smartphone with cryptocurrencies in your pocket, you don't have a Swiss bank account, as Obama famously said. You are a Swiss banker! That superpower can change the world for a lot of people.

Who objects to that change?
Mostly those who are already bankers. They don't see the need for this technology.

"Who needs Bitcoin?" asks the person who has a Swiss bank account, three brokerage accounts, access to precious metals, no currency controls and the world's most stable currency at their fingertips?

Not you, sir. Clearly not you, yet.

If you say nobody needs cryptocurrency that is only because you have never seen beyond your little bubble.

When I first started traveling and talking about this technology around the world, one of the things that struck me was how much time I needed to spend explaining in Western developed countries, about why cryptocurrencies are necessary.

The first time I went to Argentina, not a single person asked me "why?"

They asked me, "How? How do we do this now?"
"Why" is obvious to them in their fifth currency crisis.

"Thirty years ago, our government was throwing people out of airplanes because they had a different political opinion."

The "why" is obvious, the "how" is important.

That geographical gap is critical to understanding the impact of cryptocurrencies around the world.

When people say, "We don't need cryptocurrencies," the question you should ask them is, who is "we"?

Who is the "we" that doesn't need access to the financial system?

The "we" that already has it but 2.5 billion people have no access to financial services, a statistic based on a World Bank study which just counts the working-age heads of household with no access to any form of banking.

That does not include their families and children, so it massively underestimates the number of people who have 'de minimis' access to financial services,

i.e. an expensive and controlled bank account in only one currency that requires them to jump over massive hurdles of corruption, bribery, and coercion.

People who trade in a currency being inflated to shit by their own government. That is not "the banked." That is the underbanked.

If you start counting that way, you realize the number of people who have access to financial services the way I and the privileged few in Western countries do, that is maybe 1.5 billion people. That leaves the other 6 billion who don't.

In the early days of Bitcoin, people said, "Let's bank the unbanked."

But now we are beginning to learn that we can aspire to an even loftier goal, which is to de-bank all of us.
We don't need to "bank the unbanked." 
We need to remove the necessity for intermediaries, custodians, controllers of our commerce and our financial future.

We need to remove these anachronistic, nationalistic, feudal systems of money which have persisted for centuries.With the geography gap, there is also a generational gap.

To people over a certain age, if you say, "Magical internet money exists on the web, controlled by an algorithm," they seem terrified by this idea.

"How does it have value?" "Who controls it?"
"What will happen to the world if no one controls it?"

They understand, or at least think they generally understand, how their national money works but most people don't understand. If they did, there would probably be a revolution. For many older people, this technology is too strange.
  • The idea that no one controls it, but you can have rules without rulers is too strange.
  • A system that is simultaneously anarchic (meaning without leaders), but entirely predictable.
  • A system of currency where I can tell you what the issuance rate will be thirty years from now to three decimals of precision.
I can't tell you what the interest rate will be for the U.S. dollar next Friday that will be decided by twelve people I didn't vote for.
The current system has plenty of rulers, but seemingly no rules.
We are replacing that with something that
The system has no rulers, but very strict rules and mathematical controls.
People say, "Cryptocurrency isn't regulated!"
Cryptocurrency is regulated. It is regulated by algorithms and predictable mathematics.
Bitcoin is regulated every 10 minutes through a process of decentralized consensus.

It is utterly predictable and deterministic. Yes, sometimes weird things are happening. Forks, scaling debates, and things like that.

But did the average block settlement time change?
"No", it is still happening every ten minutes.

Did we issue more than 21 million coins? "Nope".

Did the people in charge change?
"Nope". There weren't any people in charge, still aren't people in charge. For all of the screaming and shouting, nine years later...

Every 10 minutes on average like a heartbeat, a block comes out.

A similar process is happening across hundreds of cryptocurrencies. There has never been a financial network that remains operational for 24 hours per day, 7 days per week, 365 days per year, with no interruption for 9 years straight.

This has never happened before. There has never been a financial system that is accessible to everyone in the world through a simple personal device, where they have the ability to do international commerce on the scale of a multi-national bank, as an individual.

There has never been a technology like this. When people say, "I'm scared. I don't know what will happen next. I don't understand this," generally all that tells you is their age. I'm scared, too. As I get older, it is harder for me to absorb change and I find myself struggling to keep up.

I read incessantly just to keep up with people who are younger than me and have more elastic brains.

The real generational gap is, every child born today will never live in a world where cryptocurrencies don't exist.

They will never live in a world before the internet, before Bitcoin, before individual freedom in commerce.

A person who grows up with systems like that doesn't know it has not always been like that. They don't know that it could be any other way.

If you tell a young person that money is an internet protocol now, where you can transmit value freely, anywhere in the world, they will look at you and say, "Well, of course it is. What do you mean?"

In my days, money was printed on cotton and linseed fabric with green ink, and we kept it in our pockets.

When we wanted to transact, we needed to physically meet the other person and hand them this germ-ridden piece of fabric that had no value.

The government had a complete monopoly on its issuance, could issue as much as it wanted and told us that it had value.

Then, one day, we received pieces of plastic that allowed us to do the same transaction only now it was even more controlled and under totalitarian surveillance at all times.

"You're crazy, Grandpa. There is no way that money worked like that. It makes no sense."

I can just imagine, 20 years from now, a young university student of economics being given an assignment where they must write a paper about the history of central banking.

They will struggle to understand why anyone would allow an entire nation's finances to be decided by a group of 12 people who are unelected, meet every Friday, and then announce to the economy… what the interest rate will be.

It will be mind-blowing, like looking back and seeing people with wigs, riding horses around and taking a week to travel from one side of the country to the other. if they don't die of cholera on the way there.

Imagine a 10 years old who is not allowed to have a bank account until they are 16 years old, who cannot buy anything online with a credit card, who must beg their mom or dad to refill the balance on their iTunes or Amazon account.

Or, as one little ingenious kid I watched once did, wait until Mommy was sleeping and used her thumbprint on a phone to buy all of his Christmas presents from Amazon…

At that point, if you're the parent, you can't decide if you should be furious or really impressed... at the sheer ingenuity.

But imagine that 10 years old using cryptocurrencies, trading with their friends. They are doing that now.

If you're a parent and you have kids at that age, you probably don't even know they are trading.
  • They are and will do it. If you tell them not to, then they will double do it. They will grow up in this environment.
  • They will have access to private money that you don't know about.
  • They will trade it with their friends and use it to buy things for themselves.
  • They will establish financial autonomy by the time they are 10 or 12 years old, once they figure out how to use this technology which they will learn about 20 times faster than you and maybe explain it to you, if you're good to them.
Then imagine the scenario where they walk into a bank and sit down with a banker at 16 years old.

The banker tells them, "You can access your accounts on Monday to Friday, 9:00 am to 5:00 pm."

"For the privilege of us holding your money, we will charge you $5 per month. if you don't maintain sufficient balance on which we will give you an interest rate of 0.01%."

"You will not be able to exchange it for any other currency except this one."

"You can only buy things from merchants we approve of, in case there is a currency embargo or some moralistic crusade against your favourite product or service."

"And don't you dare spend a dollar that you don't have, because then the interest rate is 25%." "At random times, we may block your transactions or even shut down your account because one of your transactions had the word 'Bitcoin' associated with it."

That kid will walk out of the bank and think, 'That is insane. Why would I ever want a bank account?'
'Everything they do, I could do faster, cheaper, and more securely with absolute control over my own money.' 
But that is not how the future will play out. It will not happen that way. The simple reason is, there won't be a bank for that kid to walk into.

The fundamental function of a bank of storing your assets for you, will not exist in a couple of decades.
  • It cannot exist for long, because it is unnecessary and expensive.
  • It is oppressive to those who can have it.
  • It is denied to the vast majority of people on this planet.
Eventually, they and many others will simply make the choice to do without it.

Will there be people who have bank accounts?
"Absolutely."

Have you ever ridden a horse? A couple of people but it is not your primary means of transportation.

It is just a hobby. Maybe it is your primary means of transportation, but for most people it is not anymore. If Daddy buys you a pony today, you're a princess!

A hundred years ago, if Daddy bought you a pony, you were supposed to ride it around the farm and work. The bottom line is, these technologies won't eradicate banking.

They will simply make it the obscure, weird hobby of a few curmudgeon die hards who like to do things "the old way."

Every now and then, when I walk into a supermarket, I must wait patiently to pay for my shopping because someone at the front of the line pulls out a checkbook.

Everyone behind them in the line sighs. That person will never use a credit card.

Though, neither will your children. It will seem as ridiculous and obsolete as a steam engine, riding a horse, driving your own car, using cash, or even using a bank.

The greatest illusion that humanity is under is a perception of the absence of change.

We spend most of our lives assuming that everything which has happened to us, is how it always was.

Then we are shocked when we learn that people did weird things in that past that we don't understand.

That is the first half of our lives. If we are lucky to live long enough or longer than that, we enter a far more traumatic time, desperately trying to hold on to what we know and not change, while the world around us seems to go insane.
Socrates wrote that the youth of his time had lost all sense of morality, propriety, and common sense. All they wanted to do was go to the theatre, the most "vulgar" of the arts, instead of studying philosophy and their parents had done.
The generation after Socrates probably found something else in the youth to rail against.

When I was young, certain movies were considered vulgar too. Now, the cinema is an art form. Even television is becoming an obsolete art form.

The youth of our day are wasting their energy and common sense on video games, cryptocurrencies and other things we can't understand.

The world just changed radically.

Anybody who tells you that these open blockchains can be stopped, delayed, or banned… doesn't understand human nature.

When a technology delivers so much power to individuals, there is nothing that can stop them from striving to exercise that power.

Satoshi Nakamoto is a modern-day Prometheus, who stole fire from the gods and gave it to man. Unlike Prometheus, Satoshi was smart enough to disappear.

The gods were really pissed off at Prometheus. They tied him to a rock and tortured him for eternity which is what would have happened to Satoshi Nakamoto too, in a less mythical sense.

The smartest Satoshi did was disappear. The second smartest thing was inventing Bitcoin. Now that Bitcoin has happened, we have this incredible superpower.

Make no mistake: every individual who learns to use this technology can become a financial superhero for their entire community.

No matter how much the financial gods of today are pissed off, they cannot take this power back.

Thank you.


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