Bitcoin: New (and improved?) Means of Exchange
In The Bitcoin Standard, author Saifedean Ammous states a bold premise. “Bitcoin represents the first truly digital solution to the problem of money, and in it we find a potential solution to the problems of salability, soundness, and sovereignty.”[1] Ammous argues for bitcoin as the world’s first government-free, unchangeable, and sound currency. He refers to bitcoin as the solution “to solve a problem that has persisted for all of humanity’s existence: how to move economic value across time and space.” He also draws from Nicholas Taleb when he declares bitcoin “the embodiment of antifragility, which is understood as gaining from adversity and disorder.”[2] His argument for bitcoin centers on its salability versus the failures of other forms of money. Salability refers to “the ease with which a good can be sold on the market whenever its holder desires, with the least loss in its price.”[3] In addition to bitcoin’s store of value, transportability, and divisibility, its freedom from the government monopoly of centralized banking makes it a unique step in the history of the world.
The book divides into three main sections. This book on economics first overviews the need for money as a means of exchange. The second section traces the history of money, including its failures due to various limitations. Finally, section three explains Bitcoin as a cryptocurrency, unpacks the benefits of bitcoin, and gives the author’s reasoning as to why it solves many of the failures of economic history. “Should it achieve some sort of stability in value, bitcoin would be superior to using national currencies for global payment settlements.”[4]
Reading The Bitcoin Standard caused me to return to Karl Polanyi’s book The Great Transformation. He argued that capitalism is the product of a double movement. One movement takes place in self-regulating markets while the second movement refers to the imposed regulation to guard against the abuses of the markets. The markets cannot, and should not, exist apart from government regulation. The state can maintain needed economic and social order. As I compare Polanyi with Ammous, I see Ammous with little to no concern about the need to regulate bitcoin as a standard of currency. Instead, Ammous celebrates the freedom of centralized government control over bitcoin. Will there be a need for regulation of cryptocurrency in light of its many advantages? I believe so.
I freely admit that I am out of my area of knowledge when it comes to economics, so I offer my opinion not based on what I know about economics but on what I believe about human nature. I agree with Augustine about the dark reality of human nature. Humanity is not as bad as it could be, but it is unable to escape its polluted nature. The comparison of Rousseau’s and Augustine’s understanding of human nature remains fresh from last week’s reading. Any system with no accountability can become leveraged to advantage some and disadvantage others. To this uneducated economic student, Ammous’ optimism about bitcoin’s ability to overcome all the failures of money evokes the old saying, “if it sounds too good to be true, it probably is.”
Applying cryptocurrency to a ministry context took some thought. Economics is a part of pastoral ministry, but I have maintained a personal distance from direct involvement with the finances of the church for accountability reasons. In the bigger picture, I have seen the need to think about money in new and creative ways through the years. Early in my ministry timeframe, everyone gave cash or wrote a check. Over a decade ago, we offered an online giving option; today, eighty to ninety percent of weekly giving comes online. Five years ago, we did away with passing an offering plate, and some predicted a sharp downturn in giving as an expected result. Actually, our giving increased after that decision. It is always easier to stay with what brought one to the present, but church leadership requires discernment in multiple fields, including finances. At present, our church is not prepared to receive bitcoin or any other crypto-currency as giving. I do believe that step needs to happen sooner rather than later. The pandemic taught me the need for flexibility and an agile organization that can pivot quickly.
With a looming recession on the horizon, our church expects next year’s budget to be equal to or less than this year’s. Anticipating more people struggling to make ends meet, we also seek to free up financial resources to assist those in need. When it comes to the church, its “standard” must include practical compassion for those in need. The economic side of ministry must serve the mission of the church. Putting finances into the proper context in ministry requires a clear understanding of ecclesiology. One part of the church’s purpose must include those in need. One example is I John 3:17-18 which says, “But if anyone has the world’s goods and sees his brother in need, yet closes his heart against him, how does God’s love abide in him? Little children, let us not love in word or talk but in deed and in truth.” (ESV) Will that verse find fulfillment in the future through bitcoin given in Jesus’ name? Yes, I think so. The mission remains the same, the means of exchange to get it done continue to change.
[1] Saifedean Ammous, The Bitcoin Standard: The Decentralized Alternative to Central Banking (Hoboken, NJ: John Wiley & Sons, Inc., 2018), 167.
[2] Ibid., 230.
[3] Ibid., 4.
[4] Ibid., 216.
About the Author
Roy Gruber
Husband, father, pastor, student, and sojourner in Babylon15 responses to “Bitcoin: New (and improved?) Means of Exchange”
Leave a Reply
You must be logged in to post a comment.
Roy,
Great post and summary.
What would you say is the economic status of most of your parishioners? Would you say you approach these conversations differently based on where people are financially?
I ask because I think, without realizing it, I relaxed how I approached these theological conversations when I shifted from a middle-to-lower-class church to a middle-to-upper-class church.
Andy, we have quite a wide spectrum of financial status in our church. If anything, it skews to the middle and upper-middle class. When I arrived here, it was very much a upper-middle class church. I’m thrilled that we are mixed today as I believe a narrow presence does not reflect the heart of Galatians 3:28 or neither “Jew nor Greek, slave nor free, male or female.” We try to connect any discussion/teaching about finances to the mission of the church. In my opinion, doing that keeps finances in its rightful position, which is not the most important value we have. Finances are something but they are certainly not everything or the main thing.
Roy: I have the same concerns about Bitcoin having no regulatory control at all. Regulations are put in place for everyone’s good, yet Ammous has a libertine streak about him and he thinks all government is evil. He does seem too optimistic that Bitcoin is the solution for all of humanity’s economic woes. But I really enjoyed reading this book because I was so clueless about cryptocurrency before. Did you watch the NOVA special? It was really worthwhile and provided a great overview.
Troy, I have not watched the Nova program yet. I will, as I do not have much of any understanding about cryptocurrency beyond what we read in the book and what a few people have invested in it. I know its brought a huge return so far, but it also seems to continue to be volatile in comparison with other investment strategies.
Roy, excellent summary. I will respond to your question you posed to me, but I appreciate your connecting the concept of bitcoin to church and ministry. Economy impacts every aspect of our lives, whether we like it or not. Thus, as the Church (or nonprofits), we must learn to adapt to these changes, which can be challenging on so many fronts. My gut says this: take your time in adapting those changes; time will reveal what is legit and what is not, and even then, we have to hold that loosely. For example, though Shelly and I have a “retirement account” that we try and actively grow, I hold that very loosely, realizing that it may all pan out to be a wash and not the best investment. Thus, we do the best with what we have and ultimately put on trust in Him… and His enduring, flourishing kingdom that has no end.
Roy, thank you for your thoughtful post and engagement of Ammous’ material. Like others, I especially appreciated your ministry application section and grappling with how best to stay nimble as new new technologies arise. On the regulation front, central banks and related government departments are already sorting out how to best to regulate and give oversight to cryptocurrencies, so that is good news from an accountability perspective. Just in the past few days there’s been a number of articles related to one platform losing billions and declaring bankruptcy. As a result an investigation is getting started, and other cryptocurrencies have lost value. So…same challenges, different medium. How do you go about equipping your leadership to theologically engage issues of money and to then translate that into missional practice?
Elmarie, your question is very similar to Nicole’s that I answered before yours. Please allow me to copy/paste that answer to you here: you are so right to say there are tensions for leaders around the issue of finances. I fear that in a time of declining attendance, the temptation to emphasize giving more than it should will result in less giving, not more. We try very hard to connect giving to the mission of the church. We film “faith stories” of people who have begun to follow Jesus. We show one of those almost every week. We talk about giving and getting involved in the church after that. I believe that helps people “connect the dots” about the value of giving and serving. We invite people to give toward compassion projects that help people outside the church. We make the commitment not to keep any of the giving in the church. People really like that outward focus to help those in need. That giving to compassion has not led to a downturn in giving to the church. We also stopped passing a plate for the offering because so many LDS visitors have had a bad experience with how finances are stressed in that church. For example, you cannot go to the LDS temple if you are not current on tithing 10% which you have to prove by showing your W-2 form. In our teaching, we have also taught that your responsibilities to your home and family come first. It seems the less we stress giving, the greater the generosity of people. Our basic message of finances to individuals/families in the church is basically: honor God first, save second, live on the rest.
Roy, your first quote from the book incited for me a more theological pushback to this book. Scripture warns us that the love of money is the root of all evil. What are the tensions for us as leaders in the church that have budgets and yet must keep this spiritual truth forefront in the ways we help the church deal with money in a healthy way?
Nicole, you are so right to say there are tensions for leaders around the issue of finances. I fear that in a time of declining attendance, the temptation to emphasize giving more than it should will result in less giving, not more. We try very hard to connect giving to the mission of the church. We film “faith stories” of people who have begun to follow Jesus. We show one of those almost every week. We talk about giving and getting involved in the church after that. I believe that helps people “connect the dots” about the value of giving and serving. We invite people to give toward compassion projects that help people outside the church. We make the commitment not to keep any of the giving in the church. People really like that outward focus to help those in need. That giving to compassion has not led to a downturn in giving to the church. We also stopped passing a plate for the offering because so many LDS visitors have had a bad experience with how finances are stressed in that church. For example, you cannot go to the LDS temple if you are not current on tithing 10% which you have to prove by showing your W-2 form. In our teaching, we have also taught that your responsibilities to your home and family come first. It seems the less we stress giving, the greater the generosity of people. Our basic message of finances to individuals/families in the church is basically: honor God first, save second, live on the rest.
Roy have you ever attempted to run an annual stewardship campaign that focused on stewardship of relationships, creation, mission, all in addition to stewardship of money?
Nicole, I’m not sure I totally understand your question, but we steward relationships through small groups. When I arrived here, there was a focus on adult education through classes with a master-teacher. We have totally shifted that to small groups that has produced a much greater value of relationships. I will say that shift is not an easy one to make as those vested in the teaching model do let go of that easily. As for mission (I’m thinking you mean the mission of the church not global missions) we just kicked of a campaign we call “Love Gives.” Each week until Christmas, we prepare a way to serve our community or those around the world. Because we believe the church’s focus needs to be outward, not inward, this season is anticipated after doing it for ten years now. We’ve not had an intentional focus on creation, but we have made several efforts to “go green” on our campus. Let me know if I missed the mark on your question…
Roy here is an ELCA resource that I have found interesting.
https://download.elca.org/ELCA%20Resource%20Repository/ELCA_Stewards_Of_Gods_Love_Resource_and_Inserts.pdf
Roy,
An interesting and insightful look at the text from a pastoral role. I appreciate your church’s balance approach to mission, those in need, and the congregation. You mentioned that Bitcoin is the future of funding the church, do you see the government extending its control to the medium as well? If they did, what do you see the response of the church ought to be?
Denise, sorry, I did respond to you but did not hit “reply.” My response is below your question on my post.
Denise, my uneducated guess about bitcoin is that it will be one of a number of ways to give. It seems right now that people view bitcoin as an investment, not a currency to be used for exchange. If bitcoin does become more of a currency, I do believe the government should get involved in some form of regulation. I do not share Ammous’ optimism about bitcoin. I could see the church offering some training to parishoners and the community about bitcoin and cryptocurrency in general. Many older forks (like me) do not have a lot of knowledge about it.