Where do I want to go? I’ve been asking myself.
To answer where, I would need to know why, I thought.
Why am I interested in Bitcoin in the first place?
It has to do with socio-economics.
Let me explain.
It is generally recognised that there are 3 ways to earn money.
The first is to create wealth. This is the most obvious one and most corporations do this, they create things people want. This clearly benefits society as the pie grows.
The second is to invest capital in hopes of return. This helps others create wealth. This too is useful for society.
The third is commonly called “rent seeking“. This does not create any wealth or allow others to create wealth. This takes a bigger piece of the pie without growing the pie.
One would think that out of the three rent-seeking is the superior one. It is low risk as it doesn’t cost time or money, it only requires already having resources or power.
How mistaken they would be…
The evil face of rent-seeking behaviour is observed when the economy is in a downturn. It starts small with a rent-seeker who takes a percentage from the pie without making the pie bigger. The number of rent-seekers grows with time. As a consequence at one moment those that actually create wealth see their profits go down. It becomes very attractive to join the game and we see more and more others exhibit rent-seeking behaviour as well. Bleeding more and more value from the economy.
If one looks at the complexity of financial institutions and the immense legal frameworks around their functioning, it is clearly visible how they have perfected rent-seeking over many years. From charging for using of money, to charging for the creation of money (loans) to indeed making themselves the monopolists on most things money related.
And that’s how we come to the question I asked myself. Why am I interested in Bitcoin?
Bitcoin Cash can provide everyone freedom from financial oppression.
Bitcoin is often said to allow people to be their own bank. People no longer need to pay to play. This is incidentally the main reason why I prefer Bitcoin Cash over Bitcoin Legacy because with the legacy coin you really do need a bank again to do anything worth-while.
To answer the first question (where do I want to go?) I would like to go back to rent-seeking for a moment and allow you to follow my train of thought from there.
What the economic situation made me wonder was…
Freedom to innovate
…what is rent-seeking commonly used for?
One of examples is the usage of power or wealth to buy politicians in order to prevent others from having a chance of competing fairly, by lobbying for changes in laws that would strangle the biggest competitors.
And we have plenty of examples of this. Hotel chains against AirBNB. Taxi companies against Uber, even car-sales companies managed to disallow Tesla from selling to customers directly for a while.
What we can observe is that while companies like couchsurfing and AirBNB decentralise the “hotel” business, there is still a government that has final say. A government has the power to make it hard to compete fairly. We saw the introduction of a law in Amsterdam where an individual is forbidden to rent out rooms or apartments for more than 60 days per year.
Closer to home, this is clearly visible in the Bitcoin Core team, their innovations (or lack thereof) have created a lot more wealth for a selected few while preventing the actual growth of the userbase. Their behaviour benefits only their rent-seeking partners.
Satoshi solved only part of the problem. What he overlooked is that all systems must change. And we need to figure out a way to decentralise changes so we avoid any one person gaining too much power over future Bitcoin Cash changes. Because those that gain such power become the next politicians who allow the vicious cycle of rent-seekers to begin anew.
Power tends to corrupt; absolute power corrupts absolutely. Great men are almost always bad men. «Lord Acton».
It is my personal belief that the way to solve the dictator problem is making sure people have the freedom to innovate. Or as Eric Von Hippel called it “Democratizing Innovation“.
Any individual needs to have the ability to create an innovative solution without asking for permission. This not only allows the growth of the technology, it also creates a very large and very diverse group of people that need and want the underlying technology to be stable and accountable. This is a natural antidote to rent-seekers aiming to change core concepts in a way that hurts the ecosystem. We just aim to include as many people and usecases as possible and as soon as possible.
And that’s where I want to go; where I want us all to go!
After realising the goal…
My work: a hub
…the flow of thought has lead me to a conclusion that we need a platform for innovators to use and stand on top of. A basis to add their own creativity and ingenuity to. At its core it is a hub that connects their ideas to the Bitcoin network, while providing tools to innovators to hide as little or as much of Bitcoin as they want.
The goal is to enable innovators to focus their efforts on their own work.
I will write about the hub and ideas I have for it in more detail in a future post.