Bitcoin is Tapping Into the Laws of Nature. Part 3.

Over Part 1 and Part 2 of this series we have come a long way to proving how disconnected the legacy financial system is to natural law. We have also seen how perfectly aligned bitcoin works with nature’s frameworks. Now let’s drive the point home by looking at 2 more fundamental laws of nature.

Value Based vs Debt Based

If a squirrel doesn’t collect enough nuts before through winter he will go hungry or even starve. A farmer can’t dig up next year’s harvest now. The squirrel and farmer alike must devote time and energy before receiving the rewards. In nature, you reap what you sow, but you must sow first.

Value must be created before it is spent. This is the essence of a value based system. This is not to say that loans are bad at all but just that the origin of the loans should be value that was earned not created out of this air. Bitcoin is a value based system. Bitcoin miners must devote time and energy into the network in order to have a chance of obtaining new bitcoins. No new bitcoins are promised ahead of time. Just like gold’s value is proportional to the time and energy it takes to dig it out of the ground, the presence of a bitcoin is proof that time and energy has been spent in creating it.

The United States financial system used to be value based. Pre-1971 the US system was on the “gold standard.” This meant that all the money was backed by gold sitting somewhere in a vault. Every dollar was redeemable for a certain amount of gold or silver. But just like every government in history, eventually the US wanted something for nothing. They went off the gold standard and started issuing money that was nothing more than a ledger entry backed by a promise to pay.

See also: Bitcoin is Tapping into the Laws of Nature Part 1

The money in fiat systems around the world (like the USD) requires no more time and energy to create than it does to enter a number into a database. The fact is that nowhere in nature can you reap rewards without doing the work. This leads us to the most unbreakable of natures laws…mathematics.

“In nature you reap what you sow, but you must sow first”

Governed by Mathematics vs Governed by People

No set of laws are as unbreakable as those found in mathematics. Maths is indeed the language of the universe. We can’t have a popular vote to change the fact that 2 + 2 = 4. However, voters in Switzerland recently voted on a universal basic income (free money).

While bitcoin is not regulated by any government or corporation, it is still regulated. It is regulated by maths. Mathematics regulates how and when bitcoin is created, stored and spent. We know what the inflation rate of bitcoin will be 100 years from now.

On the other hand, fiat currencies are governed by imperfect people. Countless hours and billions of dollars are spent every month trying to second guess the interest rate movements by central banks around the world. Imagine if these resources were put towards something that actually added value. Also, government printing money in the form of bail outs, quantitative easing, helicopter money or what ever you want to call it, is an attempt to make something out of nothing. People cannot make 0 + 0 = 2.

From the fall of the Roman Empire to the “too big to fail” bail outs in 2008, the history of money is the history of those in power failing their people. Regardless of your political view, which do you trust more… politicians or mathematics?

Which do you trust more...politicians or mathematics? #bitcoinClick To Tweet

Let us have a look at the table.

Laws of Nature Bitcoin VS Fiat

  Nature Bitcoin Fiat   Survival Of The Fittest Continuous Improvement Antifragile Permissionless Innovation Innovation at the Edges Value Based Governed By Mathematics

 

Conclusion

I mentioned in Part 1 of this series that this would be a tip of the iceberg discussion. Hopefully, it now makes sense to judge our current systems a little more critically. However, it is incorrect to say that current financial systems are not natural. They are as much from nature as we are. They just have a history of being ineffective and go against the blueprints of effective systems the universe has repeatedly shown us. Any seasoned sailor would advise that it is foolish go against mother nature.

It would be wise if we paid attention to the wisdom that surrounds us. Bitcoin is tapping into that wisdom and leading us to uncharted territory with limitless possibilities.

If you liked the article please share it and let me know. If you disagree or want to add your own two cents, join discussion by leaving a reply in the comments section below.

Images via creative commons.

What’s the quickest way to see the current bitcoin price in your local currency? Click here for an instant quote.

The post Bitcoin is Tapping Into the Laws of Nature. Part 3. appeared first on Bitcoin News.