THE FUTURE IS BITCOIN
Some inventions have changed our lives forever. The wheel, fire, the printing press, the internal combustion engine, the light bulb, penicillin, the telephone, the internet, and the computer are a few. These inventions made us more efficient, productive, healthier, happier, more connected, and more informed. They spawned great industries and companies like Ford, General Electric, Pfizer, Microsoft, Apple, Facebook, and Amazon. People and companies that were able to commercialize and monetize these inventions became exceptionally wealthy. An outsized portion of the gains was concentrated in the hands of a few. The Pareto principle of 80/20 applies - 80 percent of the profits were concentrated into the hands of 20 percent of the players. These inventions have driven wealth inequality to preposterous heights. Today, the world's wealthiest humans are able to buy entire nations.
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Inequality is part of nature - there is no equal distribution of resources in natural law. The alpha male in a pride of lions commands a harem of females, the wealth of countries is concentrated in a handful of geographic zones, and truly long-lasting human happiness is reserved for the minority. We like to talk about democratization, but it often leads to centralization and exploitation. We vote for our leaders but few truly serve their constituents. Instead, they use their power to violate basic human rights and freedom. During the COVID pandemic, we saw the shameless abuse of absolute power of big governments to effectively put billions of people under house arrest. The internet was hailed as the democratization of information - but at what cost? Facebook now controls an inordinate amount of information about half the world's population, Apple can tune in and listen to the day-to-day lives of a billion people, Google answers the questions of 4 billion people every day and Microsoft provides the enterprise software of 80 percent of all companies. This democratization of the world has made it less free, more manipulated, and more controlled. We are living in a dystopian society of Orwellian proportions and it is only going to get worse.
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So what does the centralization of control and influence have to do with great inventions of the world? What would you say if there is an invention that will truly democratize finance and greatly increase financial inclusion? The greatest thing about this invention is that most people are not fans yet. There is still a lot of hate which means we are still in the early phases of adoption. It is growing faster than the internet, it is going to make a more profound impact than the internet and if you act now, it will make you rich. It is a digital community like we have never seen before. It is controlled by no one and controlled by everyone, it is close to perfect, no one knows who invented it and it is going to change the world forever. I am talking about Bitcoin. This is the purest form of financial rebellion. It is the best money, the best investment and it will change the lives of everyone.
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Let's start by thinking about all the things in the world that store wealth. What would you leave your great-grandchildren in 100 years - bars of gold, ranches, apartments in New York, stocks, bonds? The total universe of investable assets totals $500 trillion. If you buy a city block in Manhattan, it is obvious the value will go up over 100 years. But it is going to be taxed by the major, eminent domain may result in it being expropriated to build a park- your children's children will need to fight to maintain it. How about cash in a safety deposit box? Money supply increases by 7 percent per annum which means it loses half its value every six years. In 100 years it will be practically worthless. How about gold? Until Bitcoin, it was the most portable non-sovereign asset in the world, but almost every government in the world has stolen people's gold. Gold has received a raw deal from governments everywhere. Between the two World Wars, peoples's gold had been nationalized, compulsorily purchased, and stolen. In 1935 popular fascist dictator Benito Mussolini appealed to the patriotism of Italian wives, urging them to swap their gold wedding bands for steel rings instead. Women bought into the propaganda that they were doing their motherland proud and handed over 35 tonnes of gold. In 1939 the Nazis stole Czech gold in London in a comical display of ineptitude. In March 1939, shortly after the Nazis marched into Prague, a message was sent to the Bank of International Settlements apparently by the Czech National Bank, and the BIS passed it into the Bank of England which was the world's premier clearing point for gold at the time. The instructions were to move the gold held in BIS account No 2 to a new BIS account No 17. Earlier, the Czechs had told the BIS to ignore all instructions because they would probably be made in front of a Nazi firing squad. Over and above this, the British parliament had put a freeze on all Czech assets to defend them against Nazi theft, and the Bank of England knew that account number 2 contained Czech gold and that account number 17 was for the German Reichsbank. The governor of the Bank of England (Montagu Norman) decided to ignore all this claiming that Adolf Hitler was a man of peace and would never do anything to harm the Czechs or the world. The Nazis got the gold and sold it in 10 days.
Two decades after the war ended, the British started to prosecute gold coin investors. In 1966, the value of the British pound was falling. Savvy investors decided to buy gold to protect themselves from their devaluing currency. Gold is bought in US dollars so they needed to sell pounds to buy dollars. This put additional pressure on the pound. In response, the Labour government banned the import of gold coins. Anyone with a big collection had to tell the Bank of England who would decide if you were a true collector or a speculator. If the latter was deemed the case, your gold was confiscated. Exchange control of gold was only lifted in 1979.
Gold can be confiscated. Its value can also be debased because gold miners are increasing supply by approximately 2 percent per year depending on the price of gold. If the price goes up they produce more and look for new deposits. The half-life of gold is approximately 21 years- over that period it will lose half of its value. That means that over 100 years, gold will lose about 90 percent of its value if not seized beforehand.
What other investable assets are there? There are sports teams. The Dallas Cowboys were worth $7 billion as of December 2022. The value of top American football and soccer clubs has been phenomenal over the past decade but there is a cultural risk. You cannot be certain NFL and soccer will be popular in 100 years and they are not very portable - it would be difficult, although not impossible, to move the Dallas Cowboys to Delaware.
Then you could own a thousand acres of land. What happens if your enemy passes a property tax and taxes your land to hell? The oldest cliche is "lost the family farm because unable to pay the property taxes". If you are an established landowner, the way you have made money is through competence in paying the rates and taxes, maintaining the buildings, collecting the rent, and navigating local and state politics. If you look over history, the families that do this best over centuries are the sovereigns. The Windsors are politically favored. Try going to the Middle East and buying a piece of beachfront property. You are going to have difficulty in swinging that because they do not sell those tracts of land to foreigners - they are reserved for the royals. Sovereigns own land into perpetuity because there is no tax.
Bitcoin is digital gold. Gold is a $10 trillion asset that would take the price of Bitcoin to $500,000 per BTC. But it is so much better than gold. You can program thousands of transactions per minute in Bitcoin, and move it around the world in seconds almost for free. The largest Bitcoin transaction was $1.1 billion - it took a couple of minutes to execute and cost 68 cents. Bitcoin is infinitely divisible, its supply is limited to 21 million. You could therefore argue that is worth 2 times or 3 times gold. If you think of it as digital property replacing land and property, then you are up by a factor of twenty or thirty from that price. Instead of buying Harrods in London, you can buy the equivalent amount in Bitcoin, you can move that to any city in the world at any hour of the day, compose it, decompose it, and materialize it. If they pass a nasty tax on it you can move it to another jurisdiction. It is better than bonds. It is better than stocks. This could be a multi-hundred trillion dollar asset class.
Bitcoin makes possible a world of equity, transparency, and democratization of money. It promises a more inclusive and hopeful future. If you are ready to take this journey and educate yourself on the best asset in human history, let's jump into the twenty reasons to invest in Bitcoin.
