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There’s nothing woke about crypto The online Right could trigger outright war

Will the kings of crypto end up going to war? Credit: ATTILA KISBENEDEK/AFP via Getty Images

Will the kings of crypto end up going to war? Credit: ATTILA KISBENEDEK/AFP via Getty Images


November 19, 2021   6 mins

Who would have thought information technology could kill millions? But between 1618 and 1648, that’s exactly what happened.

It’s estimated that about 20% of the population of Europe died in the Thirty Years’ War, the culmination of some 150 years of religious conflict triggered by the Protestant Reformation. And the Reformation was, in turn, powered by a radical new means of disseminating information: the printing press.

History doesn’t repeat itself, but, as Mark Twain said, it does rhyme. It’s not original to suggest that the internet is as transformative as the printing press: less library in your pocket and more, as David Bowie put it in 1999, an “alien life form”. But less often asked is: if revolutionising how we view, store, exchange and cross-reference our knowledge set off violent religious convulsions 500 years ago, that rewrote the political map of Europe, how long before the internet does the same thing?

The usual response to this suggestion tends to be wild gesturing at the now-common “wokeness is a religion” take, accompanied by “well, look, it’s happening”.

But this has it backwards. “Wokeness” isn’t an upstart faith. It’s a secularised, mutant form of the Protestantism that began with Luther. It’s the creed of our current elite establishment, with near-hegemonic power, and it’s subject to many of the same critiques as the then-hegemonic Catholic Church was in Luther’s time, down to the selling of indulgences. In this story, “wokeness” isn’t the schism; it’s the established church.

For schismatics, look to the emerging coalition of dissenters from woke hegemony. And if this coalition increasingly replaces ‘the Right’ in Covid-era politics, its most action-oriented and potentially disruptive faction is also perhaps the least well-understood: the crypto bros.

Often fiercely anti-woke, this loosely Right-aligned subculture blends tech futurism with a desire to preserve elements of the past, and sometimes unsettlingly strong views on facets of human nature they see as immutable and hence not amenable to progressive social engineering.

The mainstream Right mostly doesn’t really know what to make of this faction, and largely ignores them. Meanwhile, they’re busy building. And what they’re building has the potential to transform not just the internet but our most fundamental political structures — as dramatically as the Reformation and its aftermath.

Thinking of the Reformation as a religious schism driven partly by new information technology isn’t to trivialise it. The shift in mindset it drove was so radical it pushed some to opt out altogether, from a regime they found intolerable. And one form this took was the Puritans leaving Europe for America.

The political scientist Albert Hirschman argues that for this historical reason opting-out, or “exit”, has “an extraordinarily privileged position in the American tradition”.

Hirschman’s influential book Exit, Voice and Loyalty looks at what happens when things start to go wrong in an organisation or polity. As he sees it, citizens can choose to remain loyal, to exercise their voice (ie protest) or to “exit”. And as Hirschman points out, America’s origin story has contributed to an especially robust American political tradition of people voting with their feet when they don’t like how things are going.

Those talking about “exit” today in America aren’t the modern-day Puritans but their opponents. Many prominent figures associated with the subculture I’ll call the Exit Right are determinedly anonymous. Of those who write or speak under their own name, one key thinker is the neo-reactionary writer Curtis Yarvin. Yarvin’s “patchwork theory” offers a model for what exit might look like: he argues that nation-states should be replaced by proliferating, competing, autocratic city-states, each with its own CEO. In effect, this would then institute a market for governance, in which citizens could exit for a different polity, if an existing one didn’t suit.

But perhaps its most well-known powerhouse is Peter Thiel. Thiel is influenced by libertarian individualism and aversion to big government. But he doesn’t just dislike the current woke kind: he seems averse to all large-scale political systems. In a 2009 essay published at the libertarian Cato Institute, Thiel took aim at “totalitarian” and “fundamentalist” politics alike, and also the “unthinking demos” that powers “so-called ‘social democracy’”.

Thiel’s NatCon address took aim at institutional wokeness — but also the fundamental structures of Web 2.0 that power this creed. He denounced the way “the wisdom of crowds” has shaded into “the madness of crowds”. He railed against the “epistemic closure” around approved “scientific” consensus and fiat currency, warning against “a globalist future in which individuals will not exist”. He hinted at his preferred solution to this predicament, when he went on to say his biggest regret was not buying enough crypto while it was cheap. And he called for Satoshi Nakamoto, the pseudonymous inventor of the Bitcoin protocol, to be lauded with a ticker-tape parade.

Many looked baffled. But for the tech bros, talking about political models and talking about tech models is the same conversation, because the one enables the other. And when even a sitting president is vulnerable to deplatforming if they fall foul of consensus on proper behaviour, perhaps they have a point.

It’s not just about freedom of speech or association. Because as the Exit Right sees it, the problems inherent in big, centralised tech infrastructures are also there in big, centralised (and increasingly Big Tech-enabled) financial infrastructures and the fiat currencies they use. The Exit Right argues that the only way to protect any measure of freedom for dissenters is to abandon fiat currency altogether, in favour of crypto.

Meanwhile, the stories keep coming about tech converging with government: Google passing search histories to the government, for example, or Amazon hosting UK spy agencies’ data. With every story, the drumbeat grows louder from the Exit Right, to escape the convergence of government and Big Tech for salvation in the decentralising power of the blockchain.

The tech bros suggest the mainstream Right merely carps about “wokeness” from the sidelines, while assenting to every framework that gives this brittle bad-faith “faith” its real-world power: notably finance and the over-centralised internet.

Their proposed solution is leaning into new tech, to escape an increasingly totalitarian present tech. The theorist James Poulos argues in the forthcoming Human, Forever that the only way out of this bind is to embrace decentralised tech, and create “parallel institutions and secure, robust networks of mature and culturally healthy people online and off”.

This means building. Thiel is a prolific funder of projects in the Exit Right ecosystem; Yarvin hasn’t just contributed dissenting theory, but also dissenting tech. He was a founding developer of Urbit, which aims to replace the centralised Big Tech model with a peer-to-peer network of web services in which identities and data are always owned by the user, and not by Big Tech. (Urbit was part-funded by Thiel.)

Another example is New Founding, which aims to connect dissident (conservative) American individuals and businesses with “new media, technology, and commerce that serves and supports the American people”. Poulos also practises what he preaches: his book will launch initially as an NFT on Canonic, a blockchain-based self-publishing platform that sells books denominated in Bitcoin and also recently published Zero HP Lovecraft.

If the internet does drive serious, world-shattering schisms, my money’s not on wokeness as their source. It’s on these decentralising visionaries. Because for all that many of them see their task as freeing the world of Big Tech’s now rapidly-consolidating woke priesthood, their own tech vision will in turn inevitably develop its own priest class — or rather, priest classes (plural).

Right now, the Exit Right is a heavily male-dominated, almost exclusively nerd-only subculture full of exceptionally clever techies: a group that, to a man wildly underestimates the ability or willingness of normal people to get their heads around tech innovations. But in order to go mainstream, the tech that powers the Exit Right’s vision will need explaining for non-nerds. And that means roping in writers. In other words: arts graduates, people with the right mindset to simplify, prettify, explain and popularise.

But as well as bringing an ability to explain, when you get arts graduates involved, they’re guaranteed to bring their moral viewpoints with them. Arguably a key reason why tech is currently so creepily uniform in moral outlook, is because it’s heavily centralised. And its explainers and popularisers — its priest class — are recruited mostly from a small set of elite American universities with a fairly homogenous worldview.

Peter Thiel and the Exit Right argue that the only way to give teeth to the emerging “anti-woke” consensus is to decentralise finance, tech and even governance. But popularising this won’t create one new priest class. Instead, every exiting faction will need its own. If they succeed, the upshot won’t be liberation from tech-adjacent priesthoods but competition between moral outlooks.

And a measure of their success will be that this happens not in an otherwise neutral, unified “marketplace of ideas”. It’ll happen in a world where each competing worldview potentially has its own infrastructures, currencies and perhaps even city-states. Let’s hope they can all get along. Because zero-sum disagreement between moral worldviews with their own infrastructures has a name: just like the last time our information technology changed this radically. Think culture war, but without the prefix.

There may come a time when even those of us who dislike our current stifling woke hegemony look back on it with nostalgia, as the last-ditch effort of a fading age to save us from the oncoming storm.


Mary Harrington is a contributing editor at UnHerd.

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Galeti Tavas
Galeti Tavas
2 years ago

So I have managed to loop myself into a ‘Waiting For Approval’ maze, and wonder If this will get by. Sorry for this long thing on Crypto – but I think few understand it….

But I just want to mention Bitcoin, as I find the crypto Digital Currency fascinating, and DeFi, and the looming CBDC terrifying as the ramifications of all banking being done through the Central Banks (FED) has thousands of ramifications, almost all bad.

About a year ago I heard Charlie Munger (Berkshire Hathaway founder, partner to Warren Buffett;) say something I could not understand – when asked if he is investing in Bitcoin. Munger said He Would not, as it was basically an immoral medium and he would not touch it….I thought on this a long time, WTF?

I finally get it though. All Money in Fiat systems is created by private banks; ‘Loaned into Existence’ You borrow $100,000 from the bank to buy a new truck for your business. (or a house,,,).

The Bank has no box of money – they create it by a simple accounting trick – First you pass the credit worthy test, then the truck passes the collateral test of being loan worthy. THEN you sign the ‘Note’ (paper giving the terms of repayment, and the amount you now owe). Now the Bank writes your note on the Asset side of their ledger, so now they have a $100,000 asset – so THEN enters the money they give the truck company as a Liability on the ledger – and it all balances. $100,000 has just been ‘Loaned into Existence’. The money (how the bank gets the money is really crazy – but is how it works, mostly the banks just swap liabilities and assets with each other – from the one bank’s ledger, to the other banks ledger)) goes to the truck company, they pay employees, buy steel and engines, and a productive asset has entered the economy, as well as $100,000. As the money is payed back it is ‘Retired’ on the ledger, and returns to money heaven……. Cool…But the truck keeps making money – and the pay the truck makers got is circulating as ‘Velocity’ and the economy has grown. See it is all imaginary, but to rules…..

The trick of ‘Loaning Money Into Existence’ is it produced a productive asset – the truck, and so produced more goods and services, and so the economy prospers. BUT Crypto, and Bitcoin – it produces NOTHING!!!!!! It is a Fugazi.

Now the Cryptos have a ‘Market Cap’ (total value, most from just the last year) of 3 $Trillion! This money came from air basically – it is not real at all – no collateral, no truck to produce goods and services….. Just speculative value of ever increasing $$$$.

No one put in the 3 $Trillion – the ‘Hodlers’ (people who own crypto and sit on it, the Whales, the ones who got in when it was nothing) just sat on the ‘coins’ and they increased in value because people bid them up – but no real money was involved mostly, they never sold them, had them produce anything, it is ‘Bad Money’. (“In economics, Gresham’s law is a monetary principle stating that “bad money drives out good”. )

See, these Trillions of $ were made with no productivity or value – THREE TRILLION and rising! They now added vast $$$# to the system (sort of, they are only that when sold – but as you know nothing is as it seems)

And as you know, if no more goods and services are produced – BUT the M2 (money supply) increases, All the money is devalued in relation to purchasing power – Their ‘Bad Money’ devalues your ‘Good Money’.

See- Bitcoin is $, sort of, but it did nothing to produce anything. It is a parasite sort of. At least when Central Banks Print money into existence they do it by loans (gilts, Treasuries) so the asset has a liability attached, and it is collateralized by the Central Bank, and so the Nation – but Crypto? No, it is some kind of vampire money, it likely would not have a reflection in the mirror if you held it up to one (and it would not – being ones and zeros, not gold or paper…)

Crypto is totally weird – a new paradigm, and a very potentially dangerous one. It can keep growing and suck the value out of your money, or it can be revealed as a naked Emperor and disappear (I expect this) leaving this 3 $Trillion vacuum, and so crash the global economy – or something even weirder…. Strange times – and wait till the CBDC’s weirdness comes true – because the unintended consequences of CBDC is HUGE.

Chris Wheatley
Chris Wheatley
2 years ago
Reply to  Galeti Tavas

Brilliant summary.

Bernard Hill
Bernard Hill
2 years ago
Reply to  Galeti Tavas

..Cryptos as dangerous? Not hard to guess to whom. As Charles Darwin said over a century ago, “it is not the strongest of the species who survives, nor the most intelligent, but the one most responsive to change.”

David Harris
David Harris
2 years ago
Reply to  Galeti Tavas

So crypto coins are actually the tulips rather than the Dutch guilders that bought them in the 17th century. And we all know what happened next..

Drahcir Nevarc
Drahcir Nevarc
2 years ago
Reply to  Galeti Tavas

I’m afraid I’m constitutionally incapable of reading comments which start with the word “so”.

Andrew Horsman
Andrew Horsman
2 years ago
Reply to  Drahcir Nevarc

So what?

Drahcir Nevarc
Drahcir Nevarc
2 years ago
Reply to  Andrew Horsman

Sorry, can’t seem to read your reply for some reason.

Galeti Tavas
Galeti Tavas
2 years ago
Reply to  Drahcir Nevarc

Is it a trigger word for you? A few deep breaths and remember SO is just OS backwards (medical, ‘per os’, by mouth), is just backward speech from the mouth of….

only I could not read your comment as I cannot read comments ending in so……

Emre Emre
Emre Emre
2 years ago
Reply to  Galeti Tavas

You do understand that the current system of creating money dates back to a decision made by the Nixon administration in 71 to cancel the gold convertibility of dollar, right? A good discussion can be had about this involving morality in some cases and not in others. Incidentally, you can see the asset price inflation start from about this date as well, creating events like the 2008 crisis.
Crypto, in this sense, is effectively a backdoor re-introduction of the gold standard to economy with all the good and the bad that setup entailed.
It does bring about a decentralised and trust-free way of doing finance, including managing international settlements, which is a huge technological advance though.

Galeti Tavas
Galeti Tavas
2 years ago
Reply to  Emre Emre

No, Crypto is nothing in any way to do with gold – Gold is – de-facto – money and has been for 5000 years. It has function, is real, and never tarnishes or diminishes – 98% of all the gold ever mined in history is held in some vault today – that ring you wear may include molecules of gold from ancient Egypt… Gold in Singapore is 100% interchangeable with gold in Brazil – so is completely convertible as money everywhere. I know well the history of the Gold Standard and Nixon.

Crypto is speculation – it is not stock in a entity like say, Ford. They produce goods and services, they own ‘Plant’ and intellectual property, and income streams… Crypto is none of that – it is a fugazi, it is mere pixie dust, it is Speculation with no asset.

I know few watch a link – but this one is fun and enlightening on economics and Wall street – ‘Wolf of Wall street’ Fugazi, https://www.youtube.com/watch?v=wM6exo00T5I

Emre Emre
Emre Emre
2 years ago
Reply to  Galeti Tavas

Haha funny video. However another funny thing is, as far as I can see, financiers are one group that’s most hostile to crypto.

Last edited 2 years ago by Emre Emre
D M
D M
2 years ago
Reply to  Galeti Tavas

I found it really interesting that you use Gresham’s law in the opposite sense to me. My view is that fiat currency is the corrupt, leveraged, indebted ‘bad’ money of a corrupt system and that crypto is the relatively ‘good’ money that individuals are choosing to replace it.
It’s not perfect, hence ‘relatively’ but I think it is better than what it is replacing and at least individuals can evaluate whether each crypto has value or not.
I wonder how much experience you have with crypto yourself? At least crypto enthusiasts have a lifetime of experience with the old system and are choosing, freely a new system. Whereas proponents of the current fiat system tend to have only one view.
Fiat currency is managed, manipulated and distorted by governments and central banks through increasingly bizarre schemes – LIRP / ZIRP / NIRP / QE / yield curve control. The tiny reserve ratios of fractional reserve lending show just how fragile it is.

Julian Farrows
Julian Farrows
2 years ago
Reply to  D M

The problem with crypto-currency is that it’s going the way of national currencies. I think it will become less democratized in the future as its inventors become increasingly rich and powerful.

matt.soane
matt.soane
2 years ago
Reply to  Galeti Tavas

Great post. However, I think you miss an important point re. banking system – if the rules you outline were followed all might be fine – but they aren’t. In addition to what you describe, central banks go on money printing sprees – thus devaluing the dollar, pound, euro. If you own a house, you may think it has increased in value but actually most of that increase is simply that the dollar/pound/euro has lost a corresponding part of its value. For example, a dollar kept from 2000 would buy not much more than half today of what it could have bought in 2020. Furthermore, the various inflation measures used by governments do not reflect true inflation as they don’t properly reflect housing costs – which are the largest part of the cost of living for most people. Re. Bitcoin – it is fascinating. It may persist or it may go to zero – but it was designed to address the issues I’ve described. Of course, there are lots of crypto tokens that will go to zero – while others may maintain value for specific use cases. The main article is fascinating but doesn’t capture the motivation behind bitcoin. It does capture some of the more extreme libertarian views very well.

David McDowell
David McDowell
2 years ago
Reply to  Galeti Tavas

Very good description of fiat currency banking.

Bret Larson
Bret Larson
2 years ago
Reply to  Galeti Tavas

You mean it’s akin to gold? Course, if you tried making gold out to be a vampire nobody would continue reading.

Last edited 2 years ago by Bret Larson
Jake Prior
Jake Prior
2 years ago
Reply to  Galeti Tavas

A good summary, but you’re missing an important part of the equation. Not all value is created by banks, some – indeed you might argue the only real value – is created by people doing productive things. What happens when they guy that borrowed the money to buy a truck makes enough money to pay all the loan back and then starts to accumulate savings from his productivity?
He could buy another truck, but maybe he’s got enough on his plate or there just isn;t one that suits him right now. So he wants to put the value he’s worked hard to create somewhere safe where it is going to provide the same value in five or ten years time as it does now when he hopes to expand, or buy a bigger house or whatever he might decide to do.
If he stores it as cash, the government can, and does, just print the stuff, what’s the point in keeping something you worked hard for in a form that can just be duplicated with no work by someone else – the result of which of course is inflation which chips away at the stored value of his hard work and skill. In ten years, at current rates, this will have a dramatic effect on what he can do.
He could buy a house, but maybe he doesn’t have enough to buy a whole house, or he doesn;t want to hassle of dealing with tennants and building maintenance, problems with either of which could easily more than wipe out any gains he makes from rent, and he has to put work into it himself. He could buy shares in companies, but if he considers there to be a likelihood that the values of these companies will fall, or if he just doesn’t know enough about investing, what does he do?
What people have done over centuries in this case of course is to hold gold, the supply of which is relatively fixed compared to fiat currencies, and at least takes a lot of hard work to produce. But gold needs storing somewhere, incurring costs, it can easily be stolen if not stored properly and if for some reason he wants to access a small amount of it to buy something or to move a lot of it to a different part of the world if he decides to move, it is very inconvenient to say the least and he might have to somehow prove it’s purity to do so.
Yet people have still held gold for this purpose. The fact people have done this has given the vast majority of the value to gold rather than any intrinsic use for it. It is only valuable because enough people agree it’s valuable. It has been this case for 5,000 years. Bitcoin offers all the benefits of limited supply and need for work to produce the product, but storing it is free, easy and as secure as you are careful. Having value just because enough people agree it has value is exactly the same reason gold has value. The value it has has originated in the surplus value created by the hard work and skill of individual people, it can have come from nowhere else because the people buying bitcoin can’t just magic up money like the banks in the description you give. There is nothing wrong with this, indeed it’s easy to argue that it’s a much better means of establishing value than some banker just deciding from his apparently best knowledge of market values, which he is massively incentivised to over-inflate, leading to not insubstantial problems like those seen in the 2008 financial crash.

Last edited 2 years ago by Jake Prior
Emre Emre
Emre Emre
2 years ago
Reply to  Jake Prior

Don’t think many people will see this at this point, but it’s a rather good explanation of your point (which is similar to mine above) that you make here.

Last edited 2 years ago by Emre Emre
Emre Emre
Emre Emre
2 years ago

“Wokeness” isn’t an upstart faith. It’s a secularised, mutant form of the Protestantism that began with Luther. It’s the creed of our current elite establishment, with near-hegemonic power

This – I’m so glad someone is taking the time to make this point very clearly.

Last edited 2 years ago by Emre Emre
Galeti Tavas
Galeti Tavas
2 years ago
Reply to  Emre Emre

It is not really – this is a cheap and handy analogy.

Protestantism was in rebellion to a Vast body of literature, Philosophy, and rules, cultus (practices), hierarchy, and history.

Martin Luther and the later all had structured, and very well thought and explained philosophical arguments which they laid out in writing for all to see and debate.

Woke is a bunch of barbarians tearing at a great system of amazingly refigned philosophy, function, success, and benefit – like Gengas Kahn did to the civilizations he conquered – leaving them smoking ruins. Building nothing, wrecking all.

Emre Emre
Emre Emre
2 years ago
Reply to  Galeti Tavas

Wokeism has a distinguished lineage as well. It builds on a critique of the Enlightenment from Frankfurt school of philosophy as well as earlier ideas opened up by Nietzsche, followed up with a series of important thinkers through the 20th century until today. Also recall that the initial source of wokeism is Harvard University, not some downtrodden lefties.
But more to the point, it’s being pursued by the elite universities of America, and has clearly establishment support coming at a time of fading belief in God.

Last edited 2 years ago by Emre Emre
J Bryant
J Bryant
2 years ago

Mary Harrington’s ability to synthesize apparently disparate trends into a coherent whole always amazes me.
There is certainly a group of people who recognize the dangers of government-Big Tech convergence and the ability of crypto currencies, and alternative internet platforms, to free us, in theory, from government and Big Tech control. But the author didn’t address the question of whether governments will allow these Techno Bros to develop alternative currencies and internet platforms. Do governments really give up control so easily? Look at what happened to poor old Parler (and don’t tell me the Biden administration didn’t have behind the scenes input into that sad event).
If there’s a war I think it will come when the likes of Thiel set up their new internet platforms and currencies, attract a large, devoted following, and the Feds try to shut them down. Or, more likely, Big Tech and Big Business will just buy them off.

Galeti Tavas
Galeti Tavas
2 years ago
Reply to  J Bryant

I never see her bringing in a ‘coherent whole’ but linking all manner of casually related things with chains of correlation till some big Rube Goldberg machine of a concept is there with bathtubs, frying pans, wheels, golf ba*ls, sprinkler heads, and inclined ramps, ready make some simple task outlandish and complex. But it is hard to argue with as the articles contain 100 disparate elements woven together.

But she is a good writer with something always to be learned from her articles as she will being in so many words and ideas…. Rube Goldberg, and how I see Mary writing her piece
comment image

Last edited 2 years ago by Galeti Tavas
Peter LR
Peter LR
2 years ago

I don’t understand why Crypto is allowed. At a time when politicians and celebrities are hair-shirting over CO2 emissions, blockchain tech is using as much electricity as a small country. I can’t believe it all runs on windmills!
PS Mary, I’m sure there are talented techos (polymaths?) who write, so maybe no need for moralising arts types.

Bernard Hill
Bernard Hill
2 years ago
Reply to  Peter LR

You are correct Peter, blockchain uses a lot of energy, which is why it is silly to speak of cryptos as being made out of thin air. Like precious metals, its value is a reflection of the cost of mining for something difficult to extract and which is scarce.

George Glashan
George Glashan
2 years ago
Reply to  Peter LR

I think Curtis Yarvin already has this covered, he seems to have a side line in stream of conciseness poetry. Or he’s impersonating QAnon, these tech bros are so mired in memes and sarcasm its hard to know whats real and sincere. Yarvin is a fascinating guy with interesting ideas, his poetry is tosh though.

Emre Emre
Emre Emre
2 years ago
Reply to  Peter LR

There are several counters for that. Firstly, because energy is expensive, a good deal of crypto mining is done on renewables. This is especially true after the Chinese ban on crypto.
Then crypto provides a distributed global banking system. Alternative to this is building physical systems (buildings, cars, people) which also have a significant emissions cost.
Finally, most cryptos (almost all except Bitcoin), are using or moving to a different model soon which will mainly eliminate the emissions problem since they will be using no more than any other online service.

Last edited 2 years ago by Emre Emre
Brendan O'Leary
Brendan O'Leary
2 years ago
Reply to  Emre Emre

because energy is expensive, a good deal of crypto mining is done on renewables. 


A strange non sequitur.
Which renewables, on which grid? A separate grid of their own?

Emre Emre
Emre Emre
2 years ago

For this I have in mind projects specifically building mining farms near energy sources (e.g. hydroelectric, wind, solar etc) which are developed for this purpose of mining. See this article for example:
https://bdaily.co.uk/articles/2021/05/27/the-future-of-crypto-mining-is-renewable-argo-blockchains-ceo-peter-wall-on-green-bitcoin-and-sustainability
There are also individual miners who have their solar systems.
Of course pulling the energy from the grid is just using a common pool of energy.

Last edited 2 years ago by Emre Emre
Justin Clark
Justin Clark
2 years ago
Reply to  Emre Emre

The Immaculate Conception: Bitcoin vs Fiat Standard | Dr. Saifedean Ammous | The JBP Podcast S4: E58
https://youtu.be/FXvQcuIb5rU

John Riordan
John Riordan
2 years ago
Reply to  Peter LR
Galeti Tavas
Galeti Tavas
2 years ago
Reply to  Peter LR

BLOCK CHAIN IS MERELY BEGINNING ITS MARCH TO THE SEA OF THE MODERN WORLD – AND IT WILL LEAVE BILLIONS DISPLACED AND THEIR COMMUNITIES DESTROYED.

Because blockchain has thousands of unintended consequences – the Crypto currencies is a small part of the disaster,change it will soon bring – I will explain them on later articles – but a hint – the push is on for all deeds and titles to move to blockchain. Think what it means it international real-estate and assets! The wealthy will own the earth. Your house will be bought by a group in Beijing instead of some bad Evergreen disaster of speculative investment. They may rent it back to you…. or not, but they will own everything in the end.

A new world is hear with DeFi and ownership of all being Block Cain…..

Bernard Hill
Bernard Hill
2 years ago
Reply to  Galeti Tavas

…. 180 degrees wrong Galeti. Hard money, like Bitcoin, protects civil society remaining civil. It’s currency debasement which creates inter/intra societal destruction.

Last edited 2 years ago by Bernard Hill
Bret Larson
Bret Larson
2 years ago
Reply to  Peter LR

Why is diamond mining allowed? Why is travel for entertainment allowed? It’s all about jurisdictions that can hold power. Big government can buy the votes in such places in order to make slaves of the less populous jurisdictions. Which is why city states are a good idea.

Jon Hawksley
Jon Hawksley
2 years ago

“And that means roping in writers. In other words: arts graduates, people with the right mindset to simplify, prettify, explain and popularise.” Prettify yes but it needs a mathematician to explain how foolish it is.
The characteristics of money are:
1.      It is a promise by a creditworthy party, typically governments or banks, that they will give you value in the future.
2.      The party promising has to be trusted to fulfil that promise. Governments own assets and can raise taxes to meet promises. Banks hold the assets that they spend your money on and are supervised to ensure they can recover the money they lend out when it is time to repay you.
3.      To hold money you want its future value to be predictable. Generally this is maintained by reference to a currency issued by a government who is expected to keep its value within a narrow band of inflation or deflation.
4.      The evidence of the promise has to be convenient. This can be evidenced in a piece of paper that is hard to forge or a ledger maintained by a bank.
With a bitcoin
1.      There is no one promising you anything, it is an asset with no intrinsic value, a tedious to compute number. Your money goes to the seller, it is not used to buy assets that can be used to repay you.
2.      There is no party that you can sue to get value for it. You have to hope that someone wants to buy when you wish to sell it.
3.      There is no defined future value. If no one wants to buy it its value is zero. Worse than tulip mania in 1637 when at least you could have a supply of tulips.
4.      There is no record of who owns a bitcoin. When you want to sell your number has to be checked for validity in a database, a blockchain that holds the history of bitcoins created, not their owner. Compared with a bank transfer it is cumbersome and requires time for computations to be made before it can be validated. The validation reduces the risk that the buyer takes that it might be a duplicate that reduces over time, convention is the initial validation might take ten minutes but on a large transaction you should wait for an hour.
If you lose you number you have nothing – google “computer lost in Welsh rubbish tip”.
When you deposit money in a bank you have recourse to the assets of the bank which includes the money you deposit. If a million people each put £1,000 in a bank the bank will hold £1 billion and can repay them unless it loses on the loans it makes.
Even with a Ponzi scheme your money goes into the fund, you get some back from the inflated dividends that attract depositors, some stays in the fund, some goes in costs and some is often stolen.
When you buy a bitcoin none of your money goes into the bitcoin, it is all paid out to the existing holders who sell their bitcoins to you.  The supply is fixed at any point in time. A sudden influx of buyers pushes the price up until it has attracted sellers. A sudden rush of sellers pushes the price down until it attracts buyers. Or goes to zero.
A bitcoin is not a promise it is an asset and should therefore be compared to other assets that have been used as money (held for future value rather than utility value) such as gold, silver, chocolate, cigarettes or tulips. These all have an intrinsic value from their utility and, when used as money, a limited supply. When used as money they have all had sharp rises and falls in price from imbalance between demand and supply. Gold, silver and tulips have had self-fulfilling dramatic price rises based upon greed. Excess demand increases the price which convinces purchasers the price will go on going up thereby increasing demand and making the price go up. At some point enough people see that the tide will turn and they try to sell before the price goes down. That drives the price down faster. Tulips crashed in value in February 1637 and have not been used as money since then. A bitcoin has less intrinsic value than a tulip.
As with pyramid selling the key is where you are in the chain of buyers – are there enough greedy buyers still out there to offload your holding on to at a profit or has reality dawned, are you the sucker that will make the loss to pay for the early buyers profits?
Bitcoins are not rocket science the maths is tedious rather than complex. Security is based on the second generation of a secure hash algorithm, SHA 256, that relies on the difficulty in reversing a calculation because it can only be done by trial and error. It is not clear what impact quantum computers will have on this. Bitcoins are described as free from regulation but they are actually regulated by consensus between the owners of the computers that calculate new bitcoins and verify transactions. Those computers are key to the security of the validation of a bitcoin in transactions and were increasingly in China, who has now banned them. The consensus is motivated by maintaining value for new bitcoins. It is estimated that that community spends $1 billion on electricity to keep the computers going. If the computers are shut down, compromised or taken over bitcoins will face an existential risk.
The supply of bitcoins is regulated in the formula that is used to calculate them so that it averages out at 6.25 every ten minutes. If more computers suddenly find more bitcoins the formula makes the next bitcoin more tedious to calculate. The fixed supply makes the value unstable – it goes up and down with the fashion of buying.
Can you morally justify buying a bitcoin when you know that to satisfy your greed you must pass the ultimate risk of it being worthless onto a buyer? Do you want to be the vain Emperor in his new clothes or the little boy who sees through them?

Keith Jefferson
Keith Jefferson
2 years ago
Reply to  Jon Hawksley

Thank you – you have expressed many of my own concerns a lot more eloquently than I could have done. At least the IOUs that I have in my wallet are issued by the Bank of England, so I know where to take my pitchfork and torch if they default. Can’t do that with bitcoin.

Galeti Tavas
Galeti Tavas
2 years ago
Reply to  Jon Hawksley

Well posted.

The thing I fear most is when all property deeds and titles go on blockchain. Then every house is basically on the Global Market. Every nation not sovereign as all may own it piecemeal. If a deficit spending exists then the deficit will be resolved as its lands and assets are sold off internationally one at a time. Brazilian Soybean Fields – buy one on blockchain with Yen – place it with a management company…..Instead of crypto money which holds no asset – have crypto of Farmland, or Beach houses….

The social net will eat the nations, all kinds of metrics will be moving every aspect of life which we have no historic understanding of.

Leslie Cook
Leslie Cook
2 years ago

Appreciate the piece, thanks. At base, crypto and fiat seem arbitrary to me and completely subjective, whether the thing of value is bad art or an automobile. Love the comments. Often as good as the article at UnHerd!

Lloyd Byler
Lloyd Byler
2 years ago

Circa Year Time Capsule, 2070:

It’s estimated that about 20% of the population of the world died in the Thirty Years’ War, the culmination of some 20 years of dominant technocratic conflict triggered by the Digital Reformation. And the Reformation was, in turn, powered by a radical new means of disseminating information: the technocratic press.

Justin Clark
Justin Clark
2 years ago

Deeper, and intellectual, conversation – The Immaculate Conception: Bitcoin vs Fiat Standard | Dr. Saifedean Ammous | The JBP Podcast S4: E58
https://www.youtube.com/watch?v=FXvQcuIb5rU&t=5254s

Jon Hawksley
Jon Hawksley
2 years ago
Reply to  Justin Clark

This video shows an alarming ignorance of the role of money and the mathematics that underly bitcoins. All the criticisms of other crypto currencies apply to bitcoins as well.

LCarey Rowland
LCarey Rowland
2 years ago

God save the Dream.

Dave Corby
Dave Corby
2 years ago

Is Peter Thiel … John Galt?