“Nature is Wild Potential”
Alex Epstein (Philosopher)
A world run on bitcoin standard can reshape the global energy dynamics, resulting in a booming economic growth and revolutionize energy geopolitics.
Table of Contents
The Discovery of Fire
Before the discovery of fire, the only energy humans could use was the one in their muscles and brains. Otherwise, lightning bolts were high energy zigzags thrown down by Zeus, storms were the energy of the sea god Poseidon, and volcanoes were Hades, god of the underworld who had ruled the earth for 600 million years during the Hadean.
After we discovered the making of fire (circa. 700,000BCE), we were smart enough not to play with it like some toy. Fire, energy, can be a creative or a destructive force. It is agnostic to human ethos but deadly to fools.
We thereafter invented agriculture (circa. 12000BCE) and food became abundant. So much that if we had had any more to eat, we’d probably have failed to evolve smart brains but instead, really huge bellies. So we put somebody in charge of the grain stores and our appetites.
In the Middle East, during the fertile crescent, agriculture really bloomed. Alongside the invention of accounting systems and coin money to track food stores, and clerks subject to Kings who rule over it all.
The fertile crescent likely led to the birth of the famous Ancient Egyptian civilization (circa. 3000 – 300BCE). With an abundance of food, there was a lot more time to think about God, gods, mathematics, physics, and how to build impressive Pyramidal structures that can last 5000 years and counting.
Around 480 BCE, in Ancient Greece, a similar golden era brought on by a sudden abundance of food saw the development of Greek civilization that gave us Plato, Aristotle, and all the great philosophers on whose shoulders Western civilization has been founded. As fate had it, this age is what birthed Alexander the Great, who conquered and ended the Ancient Egyptian civilization.
However, once the agricultural revolution had swept across the entire globe, food was no longer a problem. Wood fuel was the next level and places with massive amounts of forested land, fertile farm lands plus access to gold, silver, iron, bronze ores were the “silicon valley” for the next stage in unlocking human potential.
The Discovery of Electricity
People had now had a lot of food and were satisfied. They’d also had a lot of wood fuel from burning and cutting up forests to make timber for housing, charcoal for iron smelting of garden tools, knives and spears. Now they wanted to fight.
As I mentioned, energy is agnostic. It can be a force for good and a force for evil. Before wood fuel was a thing, all fighting was local and close-combat brutal. Personal and up-close. We were sort of warring chimps then. Wild and savage.
Then our energy resources advanced to include precision control of fire e.g. with fire wood, and our weapons got even more impressive.
After fighting for a millennia with spears and swords until the end of the Roman empire, humans got tired and sought peace. 1400 years later, circa. 1800, Volta is playing with a frog and two different metals when he discovers electric batteries. Then Thomas Edison, the inventor of the electric bulb, builds one of the first electric power stations in the United States of America and manages to electrify the city with his bulbs.
His electricity is DC but this is the 17th century. Step-up and step-down transformers for DC power do not yet exist and will not exist for 200 years. So Nikola Tesla, the genius inventor of AC is in the right. Edison beefs him, fights him and his patents, and Tesla dies broke. But still, AC is what we all use until now when HVDC (High Voltage DC) seems like a good way to move electricity across continents. So Edison was right as well. Just not in his time.
Oil
40 years later, circa. 1840, a farmer in the USA by name of Colonel Drake strikes oil.
And here we slow down because time passes less fast yet many nice things happen.
For starters, there is a mismatch to the way gold was appreciated and the way oil was appreciated. Without discovering gold, the world would probably get along all right on silver. Without oil, we’d still be in primitive ages. But perhaps because we can touch gold, hold it in our hands, smell it and savour the glint of sunlight reflecting off its surface, we, like the Spanish conquistadors, fall in love with it.
Alas, nobody wants to lug around an oil barrel. Not that gold is any easier to carry on oneself.
Now in 2023, most people have lost access to gold and oil. Many young people are greenwashed by mainstream media to detest oil not because of the “resource curse” it carries (thanks be to fiat politics) but because they are somehow convinced we can easily live without it.
When oil was discovered in the United States of America, John D. Rockefeller had not been born yet but people soon knew they had struck something many times more valuable than gold. Dubbed “black gold”, oil would build the 20th and the 21st centuries. It would also build weapons of mass destruction, unleashing a form of energy so powerful human beings still fear to play with it. Despite all the knowledge amassed by Google.com and its spiders, nuclear power, the dragon, is respected.
World Wars
It may seem obvious why humans, after inventing oil, went to 2 world wars. But actually, the world wars were fueled by oil running an economic engine divorced from the honest hardness of gold. The end of the gold standard led to the two world wars and if we had been unlucky, we would probably be in the first World Economic Depression since the Great Depression of the United States of America.
Here is what happened in a nutshell.
Fiat and WW1
WW1 was caused by rivalry between European countries jostling over imperial power across the world through their many colonies.
What was the aim of this imperial power?
Certainly, these countries in Europe, having started out on diplomatic missions of adventure and discovery, soon realized how much more military power they had. Realized how beneficial it would be to enslave the peoples of the world into forced servitude so that Europeans could have rich, haute couture culture in London, Paris, Berlin (and later Washington).
This enslavement was enacted by fiat decree from the European leadership right from their Kings. Like the fiat money that flowed from Europe to the whole world, fiat foreign policy was a reincarnation of Hammurabi’s brutal code for slaves, and it saw African, Indians, Chinese and Native Americans get used like donkeys for the enrichment of Europe.
So indeed, WW1 was an economic war. It was a war over and through fiat foreign policy. To cap it all, the war was financed by fiat money/debt. Two thirds of the war, up to $9 billion dollars, was financed by debt.
Note that the war started in 1914, the same year the Federal Reserve system had been set up. So you know, the Federal Reserve is a private bank and henceforth essentially created money out of thin air to finance the destruction of people’s property and lives.
Fiat is such a problem.
Fiat and WW2
Part 1: Governments Should Not Do Business
To further understand how fiat money and the fiat foreign policy that follows along, got to corrupt the politics of the world to lead to world war 2, we need to dial back to the first time governments sinned – passing on a “resource curse” not just to their own nation’s children and grandchildren, but on those of the entire world.
The inception of government bonds can be traced back to the Bank of England’s issuance of the first bond to finance a war against France. This marked a pivotal shift, transforming governments from entities solely focused on earning the privilege to collect and allocate taxes for societal needs to participants in a unique form of capitalism—state capitalism and state corporatism.
The really big problem with governments going into business, just like private enterprise corporations, is that governments will not accept defeat. The invisible hand of the market sometimes destroys great ideas when their time has come too early. For individuals in private enterprise, this risk is shouldered with sadness, and people move on with life.
But a government controls the law, the banks and the people’s trust in their leaders to do them right. Precisely because governments could print receipts for gold en masse, which later became simply known as bank currency notes, they shouldn’t have issued “bonds”.
But they did and that started the wheel of debt financed living. Money was plenty, but never enough. And world politics was dialed back to the times of imperialist empires because how else is a government to realize sure profits except by raiding neighboring places to loot their gold, silver, oil, men and women as slaves?
Alas, the past imperialists only fought with knives. So they’d tire after a couple ten thousand deaths. The new imperialists had guns and bombs and could deliver death to hundreds, from afar.
Part 2: WW2
So we enter the fiat era and the fiat foreign policy of looting neighbors only got more entrenched after WW1. Indeed, fiat economics consistently benefits from real deflationary economic progress, which aims to make essential goods such as healthy food and access to clean drinking water more affordable and accessible to everyone. In the meantime, it introduces new things like refrigerators, cars and planes.
So this is what happened. That economic prosperity between WW1 and WW2 was appreciated by neither the Germans nor the other powerful countries. Instead, it further fueled a fiat mindset that set off a series of wars around the world, culminating in the emergence of the Fuhrer – Adolf Hitler. The meanest man who ever lived.
At first it was slow, but indeed, to finance even more government campaigns to pay dividends on the inflating bonds back home, massive amounts of “war bonds” (debt / government stock options, remember) were created out of thin air and sold to people in the USA, Europe, Russia. And where these bonds were not sold, inflation was exported e.g. to Africa by paying our people peanut dollars to go fight evil World Wars.
Road to Y2K
After Hitler was defeated, the Bretton Woods agreement was signed. It was there that the United States of America was honored with the role of providing the world with a global reserve currency. It had paid for this honor by hodling its gold real tight and choosing to weather the ugly storm of the Great Depression—well, those and other people’s gold that they had sold on a whim to fight their own economic depressions after World War 2
So ok, they deserved it. But what did Richard Nixon do in 1971? He let America become greater at a bigger expense to the rest of the world.
The Federal Reserve bank of the USA would have probably been ready (without liking it) to back as many dollar bills being chequed in as it could, with gold like it was in the past. But that would have complicated things.
America’s recovered economy was not that powerful so cashing back useful gold that it could do thousands of real of things with (e.g. – make processors for all types of computers including quantum computers, coat sensitive instruments like satellites in space – which all ensure its value continues to rise) for papers that had been printed years ago when Americans were hungry and needed a loan, sounded like a silly idea.
President Richard Nixon was probably told as much. And who was Richard Nixon? Well he was the man who had braved scandalous affiliation to drug cartels and remained POTUS, so his heart was hardened. In one move of (evil) genius, he quickly announced that he had officially taken the USA off the gold standard.
Now dollars would always be backed by the might and power of the U.S. government, and if you thought dollars were a receipt for loaning your gold to the US government, sit tight, they’d give you something else as payment but not gold. Gold belongs in the secure vaults at Fort Knox. Leave that discussion already. Stocks maybe. Want some stocks? Of course you do. Bring those dollars and we’ll give you some U.S. company stock. Or bonds. Yes, buy bonds.
Meanwhile, the government printed even more money and “bought more bonds” from banks. Then the banks loaned this money to people who used it to buy the bonds the government has just created.
In case you didn’t know how money is printed, now you do. To repeat, money is often printed and spent by the government as a loan. Then you have to pay for it.
After the Nixon shock, you’d have thought US debt would balloon out of hand and end the economic sovereignty of the newly world superpower. But nope. People got rich! It was a successful scheme indeed. I mean, they were the global reserve currency, don’t forget. And the world is a very big place.
Price shock waves travel real slow in such a big market pool. Meanwhile, people in the world close to the printer (rich Americans first, then Americans in general) enjoy seemingly free wealth for a long time. By the time dollars reach African countries, they are worth less.
Dollars were exported all over the world, causing price of living to go up steadily, even in Uganda. And nobody complained. But in the USA time was passing by fast. People in the U.S. were making millions faster than corn takes to germinate.
The times were just right because only 11 years later (should have taken longer for the ponziness of the money printing to be felt), Tim Berners Lee invented the world wide web, then 8 years later the Dot Com boom happened. Massive wealth was made, and lost. Even more was made shortly after in the following technology stocks boom, then lost in the 2008 crash thanks be to CDOs. Then Bitcoin happened and here we are.
Petro-dollars
A Perspective on the U.S.
Why wasn’t the money printing felt all those years from the Nixon Shock to the Dot com boom?
It happens that throughout history people do choose leaders who understand energy. Somebody, be it a Chief, Lord, King or President was always in charge of surplus food, wood fuel forests, hydroelectricity, whale blubber, oil, nuclear power. Why? Because energy is complicated and not easy for common men and women to be individually responsible for when it is very abundant.
The one thing Americans had understood during the WW2 years was the importance of espionage, subterfuge and sticking their noses, hands and frankly entire bodies in other people’s energy business. The importance of making other people spend their energy, working for and/or dealing with the issues of the west, while the west consumes enough energy (a lot of energy) to remain a socio-economic and military superpower.
A big part of the entire Capitalism – Communism debacle could be seen as one big profitable game created to keep U.S. dollars relevant and highly desired by anybody outside the USA. Especially those with oil resources.
See, America had oil, but much less than that 100 years prior. However, economic progress isn’t simply built on resources. It is also built on what stories people tell each other. For example the 2008 market crash was caused by the sweet false story that you can pay off any mortgage payment as long as you had a job, and could refinance and rebalance your house payments. Doesn’t matter if you earn $50K a year but live in a million dollar house. You’ll make it work.
The impressive story by American conquistadors who had developed a sickness at the heart that could only be cured by black gold, was the story of being missionaries of free market capitalism and financial freedom for all.
This saw the famous Seven Sisters petro corporations (which birthed Shell, Total, BP, Exxon) run all the way to the Middle East and North Africa to bring the Arab people into the wonderful world of Adam Smith – skyscrapers, piped utilities, hamburgers, casinos, movies, cars and fully furnished homes with a TV set, a fridge and bedrooms for every child.
A Perspective on Other Nations
Meanwhile in places like South America that already had an unresolved drug problem, American dollar printing only worsened the inflation of the local money so that political drug problems became even more problematic. Many, if not all politicians world over, started debasing their country’s currencies because if the U.S. dollar loses value against your own national currency could mean you’re doing good!
You can afford to debase (print some more) currency and re-establish the equilibrium, or if you trust in the might of the U.S. to make good on its state capitalist strategies, you can buy U.S. bonds or more dollars with your Yen, for example.
But it is a lie. Of course, if you are honest it probably means you will expose the USA’s scam. But being wise and daring the wrath of a superpower that effectively ended world war 2 with 2 nukes isn’t something you might wanna do. So maybe debase and live a nice happy life. Also it is very complicated stuff hashed out post WW2.
Playing Keynesian roulette is easier. It is sad to think about. That two human beings, Nixon and Keynes, could have helped turn every other leader into a bad guy regarding monetary policy.
Petro-bitcoin: A World Run on Bitcoin Standard
Part 1: 2023
Fast forward to 2023.
We have iPhones already so it’s nothing new. It is so nothing new even Apple inc. has nothing new to offer us. They got last year’s iPhone, changed the name and the charging system, and sold it as a new phone.
We have Tiktok and have laughed ourselves silly all year. But we still have mass poverty and Central Banks, as led by the Fed, are pulling off impressive policy juggling skills to keep from the world economy going into another depression. Why another depression?
Because thanks to Nixon and his supercharged Keynesian viewpoint of fiat and QE, the U.S. government printed many trillions of dollars in 2020, in the midst of a global pandemic, so that it could make billionaires richer in the guise of giving everybody a free check. The then U.S. President, Donald J. Trump, bragged about it and patted himself on the back.
Sounded impressive at the time. Now we know it was theft. Again. Still, people don’t cancel him or the Fed for it. And today, with so many college graduates online talking about money is like really talking about energy resources. A confusing mess of hyper intellectualism.
Most ideas will not tackle the real issue and they focus on detractive non-issues like a diversified, equitable and inclusive fiscal policy for monetary innovation. For example governments are now accepting people to print their own money called cryptocurrencies so that if anything goes wrong, there are other people to blame like Sam Bankman Fried.
Not Jerome Powell, he didn’t do nothing. If the past is any indication, cryptocurrencies should have amounted to treason. But since the emergence of Bitcoin which governments failed to stop,
we are now in interesting waters. Everyone can experiment with money printing all they want.
Should be fun.
On the other side is the energy debate with ‘Just Stop Oil (don’t ask us how)’ ready to force everyone to throw away their cars and go work in gardens like 70% of Ugandans do all day. Throw in climate change slogans, tie it all with rationalized carbon credit dollars or carbon credit cryptocurrency and all manner of tokenized shareholding ideas, and all our problems will be solved.
Basically, we are now in the world of illusions and fairy tales.All of us, especially Gen-Z.
Those kids addicted to tiktok who absolutely hate anything hard like physics and economics. Tell you what, if it wasn’t for Satoshi Nakamoto, I assure you we’d really be in a mess right now and very few people would understand why. But it’s all just physics and economics. Together.
Part 2: How Petro-bitcoins Beat Petro-dollars
Here’s the thing about energy. We fear it. And we should, because if everybody owned their oil well, I cannot imagine the number of accidental fires we’d have to deal with!
As I said, we need something that infuses value into material economics. A grand story and a system that ties us together. Tiktoks, for all their flair, do nothing but provide a lot of dopamine and a little insight into navigating the world around us. What we need is a way to all be responsible for the energy resources we have on our planet, while trading in something honest and valuable on its own like gold.
A money that needs to be backed with the full might of not just one person, even if that person is Superman, but every adult person around the globe. Poor, rich, doesn’t matter.
That thing which strikes these two birds with one stone, is called Bitcoin.
Allow me to start with why I think Jason P. Lowry and his idea of the government being empowered by bitcoin, is a wrong idea. I think it is a wrong idea because it sees Bitcoin as a weapon. But Bitcoin empowers governments not from the top. It’s not like the government that sets up bitcoin nodes is superior to a government that sets up missiles. The latter is definitely superior in a battle, but weak in economic ethos.
Bitcoin’s power is from the bottom. A foundation empowering civilians. Empowering them to own capital resources that other people care about in their own countries, directly.
If Bitcoin rose to a value of $10 trillion and half of that value was inside the USA alone, that is $5 trillion dollars in the hands of the American people that they directly control and own, which other people around the world would like to control and own as well. But those other people help keep the Americans responsible by running bitcoin nodes themselves.
Like stocks and IP (and unlike gold and oil), bitcoin cannot be stolen. Even better, they are way harder to steal than stocks and IP even by one’s own government. A government can take away your stock and your IP. They cannot take away your bitcoin. Unless they torture you to reveal your keys only to find you only own $1.
The idea of Petro-bitcoin calls to mind a world in which, while having their high level talks on foreign policy between governments, our politicians rest comfortable in the economic power of their own citizens at home.
As things stand, when the world’s politicians meet to discuss and jostle with their peers, they trust in the might of their own minds, their military strength and their personal access to a surplus budget of funds they can control. In other words, they have to control everything. Especially the Americans who have military bases all over the world, a key ingredient in agitating Russia to engage in the war with Ukraine.
But Bitcoin has miraculously enabled us to create digital systems that, in a decentralized way, allow humanity to tame wild energy resources for individualized economic empowerment.
For example, let us imagine petro dealings between governments on a Bitcoin standard. In the petro-dollar setting, and ultimately, any setting with fiat money even if countries band together (such as BRICS,) the tension is a fight for people to market their oil overseas. For he who markets their oil can get some of the high value petro-fiat currency needed to trade in other resources.
How about with Bitcoin?
Since Bitcoin consumes energy directly to bolster the network, unused oil resources in one’s own country are cheap and could facilitate mining operations while people wait for the markets to get better. And since bitcoin is scarce and only goes up in value, people in a country with excess oil like Venezuela need not feel left behind when they hodl their bitcoins. Because using one’s own fuel resources with one’s own coins has the same effect as selling oil to get more bitcoins. It all leads to exponential positive development.
The panic and scuffle with wanting to sell so badly is caused by inflating local currency, so people are looking for an exit. On a bitcoin standard, there are no more exits. The international trade is for all whenever it becomes favorable. In the meanwhile, circularity of available coins still ensures economic growth while enabling true wealth creation as most countries will have to find ways of circulating bitcoin rather than trying to get some from others. These coins are scarce you know.
Epilogue – Fossil Fuels
Many people, including Bitcoiners, might not be comfortable talking about bitcoin mining with fossil fuels. So maybe I’ll share my own idea of how to manage the adverse effects of burning fossil fuels if ever they become a menace.
Firstly, Bitcoin will unite us so we shall stop fearing democratic access to nuclear power by all countries on the basic of terrorists getting their hands on it. I mean, imagine a bitcoinized world with BTC nodes everywhere you look. If you nuke a city, you just might curtail your own ability to spend your bitcoin because you will be blowing up critical infrastructure.
Two, going forward as a species, we need a strategy that considers mega planetary engineering so that we maintain the global average temperature range. Heating the planet during ice-ages is nobody’s fear. Ice-ages are uncommon anyway. A more pressing concern is how to cool the planet when it has over-heated and my only hunch is that it is quite possible to cool an entire planet.
Because outer space is cold. While the atmosphere might warm to 2 degrees Celsius, only a few kilometres up, the temperature drops to less than -200 degrees Celsius. So a good heat exchange system, albeit very expensive, hard to set up and maintain, is a good bet for keeping the atmosphere in check.
Finally, we could choose to trust in Bitcoin. “Bitcoin fixes this”.
I know Bitcoiners say ‘Do not Trust, Verify’, but that is for transactions on the blockchain. Outside transactions, Bitcoin is all about faith and trust. Trust that when people are united by an ethical monetary protocol like Bitcoin, conspicuous acts of kindness and the ability to tolerate extreme pain, suffering, and even lack for the sake of making other people’s lives better will become more common.
This is what fiat economics doesn’t understand. In its faux wisdom, people need to be made to do things. Made to consume, to care about the environment, the climate, animals, each other, themselves. Yet all people need is the freedom to achieve financial independence, and the freedom to share with other people. Bitcoin is all about financial empowerment through NGU. But it is also about sharing and caring through circularity, donations, and community development.
Will it motivate people to take on the burdens of climate change? I do not know but I really think so. I have hope, faith and trust that it will. For it is our fertile crescent. Great thinkers and innovators are born when opportunities are provided, not when life is made so hard people have nothing but have to be happy somehow. Maybe that’s why we are so obsessed with sexual orientation. We have nothing, but have to be happy somehow.
Fiat is such a problem.
Long live Bitcoin.
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