Bitcoin Wealth Distribution

Bitcoin University

Bitcoin University is an educational channel devoted to Bitcoin, financial freedom, and self-sovereignty. Matthew also covers relevant macro and financial news.

Bitcoin Wealth Distribution

This video is part of a series I’ve been doing on Bitcoin’s HODL culture.

What is Bitcoin’s HODL culture, and why is it so important?

As we’ve been saying, Holding Bitcoin for the long term helps create diamond-handed, low-time-preference wealthy individuals and strong families. It also helps create the necessary preconditions for developing Bitcoin’s circular economy.

If your money is “hot potato money” like Monero… 

After transacting in it, merchants and individuals will constantly dump it for a stronger currency (BTC). This precludes the formation of a circular economy for that cryptocurrency.

We know that people dump their Monero for Bitcoin because we can look at the multi-year chart of Monero versus Bitcoin and see that this is not where people want to store their savings. They may transact using Monero but move their profits back into Bitcoin, as we said.

So that’s the background…

Response to a comment from @gratefulmjp1:

This idea that HODL culture is a symptom of the fiat system betrays a deep misunderstanding of Bitcoin, its basic economic history, and how economies and capital formation function.

• Savings are essential for civilizational flourishing.

• Savings are essential for capital formation.

• Modern civilization began in the Middle East when people accumulated an economic surplus. 

For Example: Storing more grain than they consume.

If people don’t save more than they spend, there will never be a surplus that can be invested in projects, enterprises, farms, corporations, and other human endeavors.

At a very basic level, you can think about it like this: 

• If you eat all of the wheat from this year’s harvest, there won’t be any seeds to plant for next year’s harvest 

• You cannot have capital formation if people choose not to save 

• Savings require people to have long-term time horizons, self-control and hope for the future

Learning how to save can help develop these same virtues. It’s a virtuous circle. It’s modern fiat culture that is the complete opposite. 

Fiat culture, not HODL’ing culture:

• Teaches people to have short-term time horizons

• High-time preferences

• Mindless consumerism 

Fiat money is a melting ice cube; trying to spend it as quickly as possible makes sense.

If you wait too long, you won’t buy as many goods and services. Fiat money is really at the root of modern mindless consumerism. Both fiat money and modern mindless consumerism are 20th-century inventions.

Fiat money inevitably leads to empty, materialistic lives and superficial culture, as seen everywhere in shopping culture. This is also a huge problem in crypto, where people are extremely fiat with their ideologies and behavior.

• Short-term thinking

• Short-term trading

• Crass materialism

… As we always see with crypto and lambos. 

This silly idea we see with Richard Hart, the scammer who got a lot of possessions by dumping his token on a bunch of idiots, and people like Charles Hoskinson, who also lead very crass, worldly lives.

Bitcoin is about more than just having better money. Bitcoin also marks the return of a healthier, more spiritual, and less materialistic culture.

As no-coiners go down the rabbit hole, Bitcoin leads men and women to want to become better versions of themselves.

• Taking better care of your body through real food and exercise

• Focusing more on relationships than possessions

• Family formation, getting married, having children

• Creating a legacy for the world

• Helping to upgrade the culture. 

This is what hope and positive thinking look like.

Similar to how sound money, particularly the Florentine gold florin, was the economic foundation for much of the Italian Renaissance, what’s extraordinary is that the florin did not change its gold content between 1252 and 1533. 

It’s responsible for the civilizational flourishing we see in Florence: the Duomo, the Baptistery, Botticelli’s “Primavera,” and Dante’s work.

These amazing achievements all took place during this very short period. 

The return to sound money on a Bitcoin standard will usher in a similar “Bitcoin Renaissance,” where we can see things we now dream of in modern civilization and beautiful architecture.

• “Bitcoin is not about your wealth, my wealth, or generational wealth; it’s about redistributing all wealth to everyone, full stop. I think that sounds great as long as it’s a voluntary redistribution.”

As long as it’s voluntary redistribution…

If it’s not voluntary, it’s just more plain theft, like Russian or Chinese communism or American, European, Canadian, Australian, or New Zealand socialism that we see these days. 

Fortunately, it’s difficult to steal someone’s Bitcoin. In fact, you can kill them and still not get their Bitcoin. By contrast, the modern fiat system is all about not private property but theft and the redistribution of wealth.  

Governments on a fiat standard fund their deficits by picking the pockets of everyone through money printing and inflation, which is a stealth tax that ironically predominantly hurts the working and middle classes. Wealthy people are usually financially sophisticated enough to hedge against it.

The fiat money system is like soft socialism, which makes sense when you remember that extreme centralization of power and giving control to a central bank were key pillars of the garbage economics and politics espoused by Marx and Engels.

Consider the Ten Points from the Communist Manifesto, particularly the fifth point which advocates for the centralization of credit in the hands of the state. This system, using a national bank with state capital and an exclusive monopoly, raises significant concerns about the concentration of power.

Unfortunately, he’s talking about the modern central bank, which is a very communist thing in this sense. By contrast, Bitcoin gives people everywhere access to the same sound, decentralized money, and a level playing field.

Anyone can have their own Swiss bank account with a Bitcoin hardware wallet or a mobile phone app, not just the very rich. By protecting private property and defunding government corruption, Bitcoin levels the economic playing field for 8 billion people.

Bitcoin doesn’t necessarily ensure equal economic outcomes because people are not equally good at the same things, and specific jobs pay more money than others. But Bitcoin does give people a chance for economic advancement wherever they live.

Before Bitcoin, it was virtually impossible to accumulate capital if you didn’t live in a country with a relatively less bad major currency like the USD, EUR, JPY, AUD, CAD, CHF…

In other words, to save money, because if you tried to save in the local fiat, it was just a melting ice cube, and you never got ahead since any economic value stored in a weak local fiat currency was constantly being destroyed by monetary devaluation. 

This is what we mean by the melting ice cube!

Bitcoin levels the playing field by giving every person, family, village, city, and country access to their own Swiss bank account. They can then use this account to accumulate and preserve capital to fund corporate ventures, scientific research, arts and music, cultural flourishing, etc.

And, in taking care of the young, the old, the sick, the disabled, and all those who cannot take care of themselves, and doing so in a highly effective, decentralized, free-market-driven manner rather than by corrupt bureaucratic government agencies that care more about growing their annual budgets and power than doing anything productive that actually helps real people.

We’ve seen this in California, where from 2018 to 2022, the California government spent $17.5 billion trying to combat homelessness, whatever that means. Of course, homelessness got worse, but a lot of bureaucrats and government leeches got rich in the process.

I want to return to the second half of @gratefulmjp1 comment:

This is a ridiculous idea because the people who’ve been HODL’ing since 2011 deserve Bitcoin and all the trials and tribulations they’ve gone through to hold it to the present. 

Very few people have done that. 

It marks a very strong type of human being who can do that. I only came into Bitcoin in 2019, so I don’t know why this person is against people with extreme self-control, who are really smart, and who have held this currency for a very long period.

I’m curious to know how this idea that you could somehow shield people from Bitcoin’s volatility would work.

We could have a government agency that would protect people against Bitcoin’s volatility or something like that. He also says, which is not true, that certain countries and people in third-world or developing countries will not get Bitcoin.

In many cases, what we’re seeing is actually the exact opposite. We have the current “elite” people like Warren Buffett and his banker friends—they’re the ones who don’t like Bitcoin. Buffett here is saying that he wouldn’t pay $25 for all the Bitcoin in the world.

Instead, we see a lot more adoption of Bitcoin among people with low incomes in developing countries. 

Here’s Pedro, who lives at Bitcoin Lake in Guatemala, talking about opening his third restaurant and accepting Bitcoin. The Naira crisis in Nigeria is fueling Bitcoin adoption. 

And then, of course, we have very small countries that don’t matter on the geopolitical grand stage—they’re always the ones who come to Bitcoin first.

So his other point here is not true. He responded to his comment:

I think it’s incredible how the Bitcoin ethos drives away this kind of soft communist type who pretends to care for humanity but secretly wants the forced redistribution of private property by governments.

Bitcoin, with its unique principles, can guide individuals with different economic ideologies on how to manage their finances and remove themselves from the economic game.

They won’t buy Bitcoin anytime soon, and I will take advantage of them on a Bitcoin Standard.

Bitcoin University is an educational channel devoted to Bitcoin, financial freedom, and self-sovereignty. Matthew also covers relevant macro and financial news. 

Learn more at: https://www.bitcoinuniversity.com/  
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