Most, if not all, individuals are provisioned with zero financial education and are not given sufficient instruction in the first principles of money, especially as it relates to building wealth and establishing a secure foundation from which to operate so that they may most optimally navigate the challenges of life.
Financial education is entirely omitted in classrooms, students are not furnished with the necessary faculties to effectively contend with the realities of existence and this is not solely limited to financial education either. Other notable curricular deletions include a lack of effective tutoring surrounding nutrition, physical education, self-defense, effective communication and negotiation skills, mental resilience, etc. To the more perspicacious among us, this has always been evident.
Indeed, many are aware that the opposite is typically the case: teenagers are encouraged to take on colossal amounts of debt to secure a university education, condemning them to the Sisyphean trial of endeavoring to pay back their debts while simultaneously facing minimal prospects of employment. Beyond this, many are encouraged to build their credit score by shouldering increasing amounts of debt, taking on death pledges (mortgages) and living life above their means — with this lifestyle being considered “normal” for most in the Western world and across the globe.
We are constantly being handed advice from individuals who have no experience in building wealth. Parents, teachers, friends and even media pundits, although seemingly well-intentioned, in reality live paycheck to paycheck and have no concrete understanding of the handling of money or lack the ability to competently allocate their capital in order to ensure its sanctity.
Sit Down And Shut Up
The following personal anecdote illustrates this problem quite nicely.
As a boy, I was once reprimanded by a school teacher when he elucidated the class about how the world ”really works,” extolling the alleged virtues of “getting a good education, working hard, saving money” and proffering advice surrounding the merits of pursuing a career. Having identified a singular glaring hole in his arguments, I quipped: “Sir, why would I take advice from somebody who has never left school?”
Needless to say, I spent the next hour outside the classroom in the hallway to “think about what I had said.” Indeed, to this day I still think about that interaction and the validity of the retort seems to become more and more apparent as time goes on. In my mind, I was merely employing the Socratic method to better understand my teacher’s inadequacy to proliferate his advice to the class.
My teacher’s response is emblematic of the attitude adopted by most individuals in society today, acceptance of the status quo and overreliance on outdated models of operating in the world — which are increasingly becoming more and more anachronistic, particularly as they relate to one’s finances and future prospects. If anything challenges that long-held assumption, it is quickly ridiculed or punished.
To be clear, endeavoring to attain a good education and working hard are indeed virtuous, worthwhile pursuits, but the means for acquiring these things or enacting them are multi-dimensional. The world is rapidly changing and the digital universe is offering opportunities that never existed before, serving to disrupt the monopoly that legacy systems have enjoyed for centuries past.
Faith in our existing institutions has all but evaporated, owed primarily to their lack of leadership and their cascade into corruption; with the odor of lies and deceit filling the halls of our establishments, their repugnant behavior is apparent to all. The existing paradigm serves to solely usufruct and usurp our time, energy and value.
As such, this article addresses these matters and provides an explanation as to why Bitcoin is the remedy and lighthouse in the fog. It details the most common proclamations concerning bitcoin’s supposed instability and purported unsuitability as a viable and secure means for storing one’s wealth, as well as presenting its virtues in three major domains which facilitate its claim as the safest place for one’s money — namely how bitcoin satisfies the functions of security, integrity and transportability.
- Integrity: Integrity refers to an asset’s anti-fragility and resiliency against corruption of the protocol. The protocol being the safeguarding and fortification of your monetary energy.
- Security: Security refers to its resiliency to external hostile attack vectors.
- Transportability: Referring to the ability with which one can physically transport one’s wealth across geopolitical domains as well as the facility with which one can readily transact with other market participants with minimal impedance or friction, i.e., ease of transactability/liquidity.
A valuable lesson was learned when I asked my teacher that question: the importance of challenging authority figures and their biases, identifying illogical fallacies in one’s arguments and the importance of asking the “why” of things.
Therefore, before we survey each distinct aspect of bitcoin’s supremacy as the safest means for storing one’s wealth, we should begin by prefacing this matter with a brief discussion surrounding the concept of saving itself and its relevance to our lives.
Employing a first principles approach to money management will allow us to better understand the necessity for appropriately allocating our capital in order to improve our financial health and attain prosperity. Therefore, let us begin by employing a Socratic approach which will allow us to better comprehend why it is necessary to store our wealth in bitcoin.
Saving For A Rainy Day
The concept of saving is repeatedly parroted by mainstream society and financial “experts” and has served to become axiomatic in the minds of many. “Save your money for a rainy day” is a mantra that is embedded into the psyche from a young age. However, we do not pause to ask two fundamental questions in response to those assertions:
1) What is it we are “saving?”
2) Where do we “save” it?
Therefore, allow us to investigate the matter.
In common parlance we say that we are “saving” or “building up our savings,” but what is it that we are actually saving or attempting to save? Well, our money of course, which naturally begs the preceding question of what precisely money is.
You trade time and energy to generate value to the marketplace whereby you are compensated with money which acts as a representation of your stored time, value and energy in service to that marketplace. As a natural corollary to this, in everyday vernacular, we also say that we “spend” time; we spend time with our friends and family, we spend time in meditation, we spend time doing our hobbies, etc. Money and time, then, cannot be disentangled — they are synonymous — money simply being a representation of expended time.
Big deal — what does it matter? Well, although this may appear arbitrary, it unfortunately matters a great deal , since most store their time in fiat currency, which can (and is) printed out of thin air, therefore devaluing the total existing stock. The more of something that exists the less scarce it becomes and therefore the less value it retains. With the direct opposite policy producing the polar opposite result: the scarcer the more valuable it becomes (assuming that demand remains constant). The heart of the problem is that you are exchanging the scarcest thing you possess — your time and energy — for something that has no scarcity at all, a defective money in fiat currency.
In the existing paradigm the way to combat this and insulate your purchasing power requires that the individual generate a return on their money, and that return needs to be superior to the current inflation rate — that is what the game is really all about. Before bitcoin appeared, the typical way to do this was by finding innovative ways to generate said return through various investment vehicles.
The traditional remedy to this problem is engaging in the financial markets, which means that one has to assume some element of risk in order to secure their purchasing power into the future — a system whereby individuals have to assume more and more risk to keep up with increasing levels of inflation, begetting a comprised societal foundation.
Bitcoin ameliorates this problem since it once again allows the individual to actually save their money and not need to assume the risk of investment when all they wish to do is to have some insurance against the uncertainty of the future and increase their prospects of security and stability in their lives, as we shall see.
Sound Money Versus Soft Money
This effectively comes down to the choice of holding your wealth in sound money or soft money. In order to differentiate between the two, we can look to the three pillars mentioned at the introduction of this article which guarantee the sanctity of our savings, these being its integrity, security and transportability/liquidity.
Let us now assess those three pillars and contrast the use of banks with the use of bitcoin and how well each satisfies these properties.
Integrity: Fiat money stored in a bank benefits from zero integrity because of a lack of protection from inflation since the interest rate does not beat even the official inflation rate. As a result, keeping your money in your bank account means that you are mathematically guaranteed to lose purchasing power.
Security: The security aspect of banks is somewhat better. It is hard for someone to enter a bank and steal your money; the cash is either stored behind four feet of steel in…
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