The great disruption
The Bitcoin Standard: The Decentralized Alternative to Central Banking explores the emergence of Bitcoin as a significant cryptocurrency. Tracing the history of money from the primitive times of trade by barter and the use of monetary metals to this age of digital money, the book describes how the use of money became centralized and how Bitcoin is attempting a decentralization that could be one of the biggest disruptions in history. Written by economics professor Saifedean Ammous and endorsed by antifragility champion Nassim Nicholas Taleb, I found the book very enlightening due to my extremely limited knowledge of cryptocurrency.
Ammous joins other modern economists in addressing the fallacy of scarce resources. He notes that:
[t]he belief that resources are scarce and limited is a misunderstanding of the nature of scarcity, which is the key concept behind economics. The absolute quantity of every raw material present in earth is too large for us as human beings to even measure or comprehend, and in no way constitutes a real limit to what we as humans can produce of it. We have barely scratched the surface of the earth in search of the minerals we need, and the more we search, and the deeper we dig, the more resources we find. What constitutes the practical and realistic limit to the quantity of any resource is always the amount of human time that is directed toward producing it, as that is the only real scarce resource (until the creation of Bitcoin)[1].
This observation about time being an authentic scarce resource brings to mind two references to time in scripture. First, the Psalmist’s cry: “Lord, teach me to number my days that I may apply my heart to wisdom,” and then Paul’s call to the Ephesians to “redeem the time for the days are evil.[2]” Indeed, if we make no distinction between sacred and secular, and if cryptocurrency has become, or is almost, as significant as remote work, online banking, e-commerce, and online entertainment/education/meetings, then time invested in studying and leveraging cryptocurrency is time well spent.
Ammous points out that a key reason why Bitcoin is important is because its
immutable monetary supply makes it the best medium to store the value produced from the limited human time, thus making it arguably the best store of value humanity has ever invented. To put it differently, Bitcoin is the cheapest way to buy the future, because Bitcoin is the only medium guaranteed to not be debased, no matter how much its value rises.[3]
To new kids on the block like myself this new discovery is both enlightening and disturbing. My concern is if cryptocurrency/Bitcoin is the way to go, then what might be the implications of coming in late in the game? What might be the implications for billions of people living at the base of the economic pyramid with little or no access to the internet? If there is a grandfathering process, will that really level the playing field? How does decentralization measure up with the one-world government prediction in the Book of Revelation? Whatever the answers to these questions might be, I imagine that the Bitcoin discourse has only just began and that it will lead to the falling of long-held economic theories, like the scarcity of resources idea, and the rise of new exciting ones.
[1] Ammous, Saifedean. The Bitcoin Standard: The Decentralized Alternative the Central Banking. (Hoboken, NJ: John Wiley & Sons, 2018), 192.
[2] Psalm 90:12. Ephesians 5:16
[3] Ammous, The Bitcoin Standard, 198.
About the Author
Henry Gwani
Follower of Jesus, husband, father, community development practitioner and student of leadership working among marginalized communities in South Africa5 responses to “The great disruption”
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Henry, thanks for you interesting and varied questions at the end of you post. Let me ask you about one of those questions. You asked: “What might be the implications for billions of people living at the base of the economic pyramid with little or no access to the internet?” Do you have a sense of what the outcome of that dynamic would produce? To me, I felt Ammous was overly optimistic about the benefits of bitcoin as it seems that there are already a few “haves” and many “have nots.” Cryptocurrency appears to me to be another way to create disparity between the rich and the poor. I’d appreciate your thoughts…
Henry: Good questions about the future implications with cryptocurrency. Ammous makes some big, bold claims about Bitcoin and you can feel his optimism jumping off the page. I’m a little more skeptical, a healthy skepticism, I think. Even if Bitcoin fails, I think the idea of cryptocurrency is here to stay. I didn’t know anything about it until this book, but now I understand enough to keep an eye on new developments. I won’t investing in Bitcoin anytime soon.
Henry: I’m interested to know if in the communities you are currently working in if there are conversations surrounding cryptocurrencies and if so, if it is perceived as something realistic for members of the communities to participate in or not.
Henri, I assume you have been reading the news about cryptocurrency this week. It is NUTS! How quickly things change… yes, let us be mindful of the reality that our days are numbered. There is but one assurance.
You raise some great questions regarding digital money. If that does become a real thing going forward, what is to become of the low-income, marginalized places of our world? And what does Christian justice look like in that kind of setting? Time will tell!
Wow, Henry!
Great questions! I have been wondering about those at the base of the economic pyramid. Keeping in mind your questions, how can church leaders prepare their people the navigate these times?