Schopenhauer on Bitcoin: Beyond Profit
Money is human happiness in the abstract; he, then, who is no longer capable of enjoying human happiness in the concrete devotes himself utterly to money.
-Arthur Schopenhauer
Bitcoin faces widespread ridicule, an early stage for accepted truth as described by the 19th century German philosopher Arthur Schopenhauer. Despite my own convictions in the enormous potential of this nascent decentralized trust protocol, I too have a strong sense of disbelief. Having recently returned from 10 days of silent meditation in the wet woods of the wild West, it seems scarcely plausible that my investment has grown over one order of magnitude since my departure. I must remind myself what any seasoned speculator will tell you, the market doesn’t care what you believe.
I recently enjoyed a chuckle reading Mathew O’Brien’s article, Bitcoin Is The Segway of Currency, but I imagine my mirth was not for the reasons our esteemed associate editor of business and economics at The Atlantic intended. On the surface, the comparison of these two technological innovations seems reasonable. Both have been heralded as revolutionary and yet neither has found widespread adoption. Bitcoin has visible personalities like Richard Branson and the Winklevii who have placed their lucre where the lunch goes. Segway had the fruity megalomaniac from Cupertino (may he rest in peace) and other innovators lauding the virtues of never walking again.
Of course on another level this facile comparison clearly lacks meaning. We could say that Segway is to Bitcoin what bicycles are to e=mc², but let us avoid nebulous analogies. Quite simply, Segway repackaged an old idea, a mode of transportation manufactured by a commercial entity looking to build a market by creating demand that did not exist; a simple industrial formula that has worked for nearly a century. Bitcoin does not share many of these properties, most notably the lack of a profit hoarding entity. Instead, we find a community of geeky anarcho-libertarian types who use GNU code and talk OTR about Edward Snowden and the Federal Reserve.
To his credit, Mr. O”Brien aptly compares Bitcoin to a dot-com stock circa 1999, though he seems to believe it is akin to Pets.com and not Amazon. Only time will tell, but the fractal pattern emerging in the market capitalization of Bitcoin has the feel of what Elliot wave practitioners call Wave 3 (maybe Wave 5), but don’t get distracted by the banality of price patterns. Though I’ve spent many of my most precious hours poring over charts and figures, the technological innovation called Bitcoin marks a new era in human history that has implications far beyond the antiquated notion of profit. Unlike the Segway revolution that wasn’t, the Bitcoin evolution has a broad and deep community of highly talented, motivated and capable autonomous individuals working in concert to build an alternative to the status quo.
This conglomeration of strangers working together to establish trust using mathematics has profound and fundamental value for society. Beyond freeing payment systems from third party profiteers, the decentralization and automation of services (DACs) that once relied on centralized coercive authorities now seems possible. Rather than weakness, the inability for Bitcoin to stabilize in terms of fiat currency reflects the underlying nature of our constantly changing reality, for upon inspection stability seems illusory. Speculation has created this incredible run, but it will bring the interest of innovators who slavishly work on shopping carts and layouts for big tech firms beholden to greedy shareholders consumed and confused by the infantile motive of profit.
Despite all this, many bright and influential folks maintain that the protocol is a deflationary Ponzi scheme. These folks seem unaware of the rules that currently govern the nascent code. Unlike the international reply coupon con that followed The Great War, we have not located a criminal mastermind who selfishly reaps reward. With over 12 million Bitcoins in existence, each one divisible up to eight decimal places, the specter of deflation seems imagined, especially once we consider the democratic process implicit in maintaining the source code. Similar to central banking, the Bitcoin foundation can alter the law/code through consensus and voting for a desired change.
Members of the community see the rise of a new democracy and stand witness to freedom founded in software, we have a coded social contract whose signers wish to build Utopia.
The alchemists in their search for gold discovered many other things of greater value. -Arthur Schopenhauer