Bitcoin Myths, Part 0
Bitcoin Was Built for Civilization
You’re asleep on a plane somewhere over the South Pacific. You wake up just in time to see the wing tear off. Your stomach drops as the plane hurtles toward the ocean.
Then black.
You open your eyes. You’re alone on a deserted island. There’s a backpack next to you.
What do you hope is inside?
Gold coins? Stock certificates? A hardware wallet loaded with Bitcoin? The deed to a penthouse in New York City?
Or a bottle of water?
The Deserted Island Test
Many people argue that Bitcoin has no value because, on its own, it is worthless. You can’t eat it. You can’t drink it. You can’t make tools out of it.
And that’s true. Without an online network accepting it as payment and store of value, Bitcoin does nothing.
But that’s true of most things we value.
What are you going to do with gold on a deserted island besides an art project? What good are legal property rights if you’re isolated? Who cares about a penthouse in New York City if you’re stranded? The stock market means nothing on Gilligan’s Island. 1
That doesn’t make those things worthless.
It means their value only makes sense inside civilization.
Civilization Value
The things that fetch the highest prices are not survival goods. They are civilizational goods.
For human life, water and air are the most valuable things in the world. Without them, you die. And yet water is cheap. Air is free.
Meanwhile, gold sells for thousands per ounce. It’s the diamond-water paradox.
Some things are valuable because they keep you alive. Others are valuable because civilization covets them.
Civilization and Bitcoin
Civilization is complex. It requires powerful tools to function. It must coordinate labor. It must store wealth. It must transfer value across time and space.
That’s what gold has done for thousands of years. That’s what stock markets do for corporations. This is why property rights exist.
Bitcoin is a new tool for the digital age.
It is permissionless. Anyone with an internet connection can use it without asking a bank for approval. 2
It is borderless. A Bitcoin transaction does not care whether you are sending value across the street or across the ocean. 3
It operates 24/7. There are no banking hours. No weekends. No holidays. 4
It is censorship resistant. Users who control their private keys control their funds. There is no central administrator who can freeze an account with a phone call. 5
It is not perfect, but it is useful in a world connected by the internet and fragmented by nation-states.
Going Off the Grid?
I have a great uncle who did two tours of duty in Vietnam, wrangled wild horses, lives in the mountains with his own source of electricity and water, rolls his own cigarettes, and is a true cowboy.
He once told my dad, “If things get bad and it’s only the coyotes and cockroaches left, come find me. I’ll be just fine.”
And if anyone is ready for that kind of world, it’s him.
But even he had a job, a pickup truck and a snowmobile that got him off the mountain.
The most prepared man I’ve ever met still lived inside civilization and benefited from the technologies that sustain it.
So the idea that something only has value if it’s useful in total isolation doesn’t make sense.
No one actually lives that way.
Conclusion
Maybe you still believe that Bitcoin is intrinsically worthless.
Fine. By the deserted island standard, so is your 401(k). So is the deed to your property. So is every financial asset in the modern world.
If you truly believe that only what survives total isolation has intrinsic value, then apply that standard consistently. Buy the farm.
But don’t hold Bitcoin to a rule you don’t apply to anything else.
Final Word
We all depend on civilization. The only question is which tools we use to navigate it.
"No man is an island, entire of itself; every man is a piece of the continent, a part of the main." — John Donne
DISCLAIMER: This article is for informational and educational purposes only and should not be construed as financial, investment, tax, or legal advice. The author is not a licensed financial advisor, and nothing in this article constitutes a recommendation to buy, sell, or hold any cryptocurrency, gold, or other asset. Cryptocurrency investments are highly volatile and risky, and you could lose all of your invested capital. Past performance does not guarantee future results. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions. The author operates a paid cryptocurrency education course and may hold positions in assets discussed.
https://en.wikipedia.org/wiki/Gilligan%27s_Island
https://freemanlaw.com/permission-and-permissionless-blockchains/?
https://www.nasdaq.com/articles/bitcoin-is-borderless%3A-how-decentralization-and-permissionlessness-grant-autonomy-across
https://nativenewsonline.net/branded-voices/is-bitcoin-gambling-or-a-smart-investment?
https://www.ccn.com/education/crypto/bitcoin-censorship-resistance/?