I first invested in Bitcoin in 2014, when it was mostly just a fad, and the type of thing only a geek could appreciate. Bitcoin also had an edgy persona to it, and since money and edgy often don’t mix, it was mostly ignored or treated as a fools errand (it might be!).
The reason for my interest wasn’t money, or the technology, or the fad. It was because Bitcoin is HONEST.
“You shall have a correct and honest weight; you shall have a correct and honest measure, so that your days may be prolonged in the land which the LORD your God is giving you.”
The Lord admonished His people to be honest with their money. In fact, He went so far as to imply that being dishonest with their money would cost them their land.
During Old Testament times, scales were used to determine the weight, and thus value, of the coinage a traveler might exchange for local currency. They did this by using a counter-weight, which would presumably be standardized.
To cheat their customers out of money, some would use false weights, or scales that had been tampered with so that the balance of the scale showed less weight from the coinage than was actually there.
This is hardly the only way some have used false money to cheat others. During the Byzantine empire, cheaper metals were mixed with more expensive metals like gold or silver to increase the perceived amount of money, which is where the practice of “biting” the coin came from.
In 1933, President Roosevelt made private gold ownership illegal, forcing owners to sell to the government, then immediately repriced gold to devalue the currency of those that sold.
Stealing via money manipulation is an old story, and one that will be with us so long as greed and dishonesty exist. And while greed and dishonesty are both conditions that originate in the heart, both are spread through the cultures and systems they exist in.
This brings us to the money of the modern era. It’s not an exaggeration to say that the ways in which money can be dishonest are infinite. With technology, central banking practices, government spending and international exchange rates, there is an unlimited number of ways you can be lied to, some of which we accept implicitly as just part of life.
The practice of currency inflation is the old metal mixing on hyperdrive, adding new dollars to the old dollars and pretending nothing has changed.
Fractional reserve banking, or the practice of multiplying the amount of money in the financial system via debt issuance, is the old false weights and scales, adding money to a banks balance sheet that in reality doesn’t exist.
As side note, it’s important to note that while everything above is LEGAL, none of it is honest. It’s playing a game with perverted rules meant to benefit some to the detriment of others, and has as much moral authority as government endorsed murder or theft. God’s law will always be highest.
So what makes Bitcoin different from modern money?
- There is a maximum amount of bitcoin that can and will ever exist: 21 million. This cannot be added to, subtracted from, or in any way altered by any one. You may think this would create a supply problem, but Bitcoin is also infinitely divisible, which means while we cannot have more, we can slice it up via decimals as many times as we need to to accommodate everyone.
- A Bitcoin is a Bitcoin – nothing else can impersonate it. We mentioned the fake money via fractional reserve banking above. While there can be lending and debt systems attached to bitcoin, they are something else, and not mixed in with Bitcoin as if they are the same thing.
- The ledger for Bitcoin is PUBLIC, and is open for anyone and everyone to see. This is a source of much confusion, as many believe Bitcoin is anonymous. On the contrary, every time a bitcoin or fraction of a bitcoin is exchanged, the transaction is posted on the ledger and can be reviewed and seen by everyone. This prevents the kind of shadow accounting that can hide activity.
Ultimately, this article is not an endorsement of bitcoin as an investment vehicle, currency, or anything else. I own a small position in bitcoin, and there are many other ways to invest in cryptocurrency outside of Bitcoin, all of them with their own strengths and weaknesses.
Bitcoin might be a fools errand. It may fail for any number of reasons, some known and others unknown. But its attempt to create honest money, something desperately lacking in our modern world of money, is a noble cause for those seeking truth and transparency.