Sovereignty through mathematics CHAPTER THREE


We humans are biased by nature. Everything we think we know is distorted in one way or another by our cognitive shortcomings. The human brain has been forced to evolve and adapt to whatever environment it found itself in over millennia. Having a brain that is capable of setting aside personal aims for the sake of the collective has proven to be advantageous for the evolution of our species as a whole. The same is true for every other social life-form. However, to let these parts of our brains guide our political judgement can lead to disastrous results in the long run. Not because of bad intentions but for the simple fact that a few individuals will always thrive by playing every political system for personal gains. From an evolutionary perspective, an army of ay-sayers and martyrs, regardless of whether we’re talking about an army of humans or an army of ants or bacteria, has an advantage over a less disciplined one. From an individual’s evolutionary perspective though, it is better to appear like you’re a martyr but to run and hide when the actual battle happens. This at least partly explains the high percentage of sociopaths in leadership positions all over the world. If you can appear to act for the good of the collective but dupe your way into more and more power behind people’s backs, you’re more likely to succeed than someone playing a fair game.

The story of banking and fiat currency is a story about collective madness. Historically, rulers have tricked people into killing each other through the promise of an after-life. Through central banking, the rulers of the world wars could trick people into building armies for them by printing more money. This is seldom mentioned in history classes because it still goes on today, on a massive scale. Inflation might no longer be paying tank-factory workers, but it is the main mechanism that funnels wealth into the pockets of the super rich and away from everyone else. Inflation is the mechanism that hinders us from transporting the value of our labour through time. It makes us avoid real long term thinking. We hardly ever consider this a problem, because none of us has ever experienced an alternative to it. Money is still vastly misunderstood by the lion’s share of the world’s population. In most parts of the world, banks do something called fractional reserve lending. This means that they lend out money that they don’t have. Conjuring up new money out of thin air and handing it out to their customers as loans. Loans which have to be paid back with interest. Interest that can’t be paid back with thin air, but has to be paid with so called real money. Real money, of which there isn’t enough around to pay back all the loans, so that a constant need for new credit becomes a crucial part of the entire system. Not to mention central banks that do the same and worse to governments. We’re so used to it by now that every country is expected to have a national debt. All but a handful of ridiculously rich ones do. National debts are also loans which have to be paid back with interest backed by nothing. Think about that. Your taxes are paying someone else’s interest. Your tax money is not paying for your grandmother’s bypass operation, it is paying interest to a central bank.

When the ideas of the catholic church ruled europe, people who didn’t believe in God were few and very seldomly outspoken. They had good reason for this, since belief in God was virtually mandatory throughout society. Ever since 1971, when famously dishonest american president Richard Nixon cut the last string that tied the US Dollar to gold, our conception of what the world economy is, and ought to be has been skewed by an utterly corrupt system. We’re led to believe that we’re all supposed to work longer and longer days in order to spend more and more and bury ourselves in more and more debt to keep the machine running. We’re duped into thinking that buying a new car every other year is somehow good for the environment. That bringing a cotton bag to the grocery store will save the planet. Stores manipulate us all the time through advertising and product placement, but we’re led to believe that if we can be “climate smart” we’re behaving responsibly. Somehow, our gross domestic product is supposed to increase infinitely while politicians will save us from ourselves through carbon taxes. Fortunately for us, and unfortunately for them, there now exists a way for unbelievers of this narrative, to opt out. Life finds a way, as Jeff Goldblum once so famously put it.

Collectivism has ruined many societies. Those of us fortunate enough to live in liberal democracies tend to forget that even democracy is an involuntary system. It’s often referred to as the “worst form of government except all others that have been tried”, but the system itself is very rarely criticized. We’re so used to being governed that not having a leader seems poposturus to most of us. Still, we pay our taxes and an enormous cut of the fruit of our labour goes to a third party via inflation and the taxation of every good and service imaginable. Institutions, once in place, tend to always favor their own survival just as much as any other living thing does. People employed in the public sector are unlikely to vote against policies that threaten their livelihood. This is a bigger problem than we realize because it’s subtle and takes a long time, but every democracy is headed in the same direction. A bigger state, a more complicated system and fewer individual freedoms. Long term, it seems that all of our systems tend to favor those who know how to play that system and not those who contribute the most value to their fellow man. Proponents of socialist policies often claim that failed socialist states “weren’t really socialist” or that “that wasn’t really socialism”. What most people fail to realize is that we’ve never tried real capitalism since we’ve always used more or less inflationary currencies. This might very well be the most skewed narrative of our era. We’re all experiencing real, albeit disguised, socialism every single day. True free market capitalism is what we haven’t experienced yet and it might turn out to be a very different thing than what we’re told to believe that it is, by almost all mainstream media.

The validity of the classic right-left scale describing political viewpoints has been debated a lot lately and alternative scales, like GAL-TAN, the one with a Y-axis describing more or less authoritarian tendencies, are popping up in various contexts around the web. After the birth of Bitcoin, there’s a new way to see this. Imagine an origo, a zero point, and a vector pointing to the left of that. All politics are arguably on the left because all policies need to be funded by taxes and taxation can be viewed as theft. Taxation can be viewed as theft because at its core, it’s involuntary. If a person refuses to pay his taxes, there is a threat of violence lurking in the background. Not to mention inflation, which Milton Friedman so elegantly described as “taxation without legislation”. What you do with the portion of your wealth that you have in bitcoin is another matter altogether. If you take sufficient precautionary privacy measures and you know what you’re doing, you’re business in bitcoin is beyond politics all together. With the introduction of the Lightning Network and other privacy improving features, it is now impossible for any third party to confiscate your money, or even know that you have it for that matter. This changes the political landscape of every nation on earth. Bitcoins are a lot less confiscatable than gold and other scarce assets, which makes it a much better tool for hedging against nation states. In this sense, Bitcoin obsoletes borders. You can cross any border on earth with any amount of bitcoins in your head. Think about that. Your bitcoins exist in every country simultaneously. Any imposed limit on how much money you can carry from one nation to the other is now obsoleted by beautiful mathematics. Bitcoin is sometimes referred to as a “virtual currency”. This is a very inaccurate description. Bitcoin is just mathematics, and mathematics is just about the most real thing there is. There’s nothing virtual about it. Counterintuitive to some, but real nonetheless.

The complexity of human societal hierarchies and power structures are described perfectly in a classic children’s book. “The Emperor’s New Clothes”, by Hans Christian Andersen. See the world as the kid that points out that the king is naked in the tale, and everything starts to make sense. Everything in human society is man made. Nations, leaders, laws, political systems. They’re all castles in the air with nothing but a lurking threat of violence to back them up. Bitcoin is a different beast all together. It enables every individual to verify the validity of the system at all times. If you really think about it, morality is easy. Don’t hurt other people and don’t steal other people’s stuff. That’s the basic premise. Humans have but two ways of resolving conflict, conversation and violence, and in this sense, to hurt someone can only mean physical violence. This is why free speech is so important and why you should defend people’s right to speak their mind above everything else. It’s not about being able to express yourself, it’s about your right to hear every side of every argument and thus not have to resort to violence should a conflict of interests occur. You can’t limit free speech with just more speech, there’s always a threat of violence behind the limitations. Code, which both Bitcoin and the internet are entirely made up of, is speech. Any limitations or regulations that your government implements in regard to Bitcoin is not only a display of Bitcoin’s censorship resistance, but also a test of your government’s stance on freedom of expression. A restriction on Bitcoin use is a restriction on free speech. Remember that the only alternative to speech that anyone has, is violence. Code is a language, mathematics is a language and money is a linguistic tool. A linguistic tool we use as a means of expressing value to each other and as a way to transport value through space and time. Any restrictions or regulations regarding how you can express value, i.e. making it impossible to buy bitcoins with your credit card, proves that the money you have in your bank account is not really yours. When people realize this, the demand for Bitcoin goes up, not down. If you know what your doing, there’s no need to fear the regulators. They, on the other hand, have good reason to fear an invention that shamelessly breaks their spell.

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Sovereignty through mathematics CHAPTER THREE was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.

Publication date: 
05/21/2019 - 08:03

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