Andreas Antonopoulos

WHY WE NEED BITCOIN | Andreas Antonopoulos with Peter McCormack on What Bitcoin Did Podcast

Check out the What Bitcoin Did Episode Page & Show Notes

Key Takeaways

  • “So, why Bitcoin? Because the 21st century needs a 21st century system of internet money that is open, borderless, neutral, censorship-resistant, immutable and permission-less… and that’s Bitcoin.” — Andreas M. Antonopoulos
  • “We are not ‘losing’ cash, it is being deliberately taken away from us as a means of transaction” – Andreas M. Antonopoulos
    • “When you take away this [financial] privacy, you lose your freedom, all of the other human rights start to crumble” — Andreas M. Antonopoulos
  • Modern credit cards and payment systems surveil you in 3 ways:
    • Monitor the associations you form – your network
    • Content of your purchases – Which books are you buying or organizations are you supporting
    • Track your geographical location – Every transaction reveals your location (no need to activate GPS on your phone)
  • The future is 100% digital currency and you have to choose which form of money you use:
    • Under government control – completely centralized and surveilled end-to-end
    • Border-less, neutral, permission-less digital currencies that cannot be turned off
  • Governments can coerce payment processors into blocking payments to recipients they deem unfit, Bitcoin fixes this
  • Andreas’ advice for new comers to Bitcoin:
    • Invest in education, not speculation
    • Don’t buy Bitcoin, earn it in exchange of your skills
    • Remember: “Not your keys, not your coins”

Intro

So, Why Bitcoin?

  • “Because the 21st century needs a 21st century system of internet money that is open, border-less, neutral, censorship-resistant, immutable and permission-less that serves the needs of commerce for every person on this planet no matter where they are, no matter who they are, anytime anywhere, and that’s Bitcoin.” — Andreas M. Antonopoulos
    • Let’s dissect the above
    • Money is supposed to facilitate commerce. Instead, money systems are plagued with politics, fighting and restrictions.
    • We have global markets, community and Internet. Yet, our money is fragmented and inefficient (1.7 billion adults are un-banked)
  • Andreas finds it easier to explain Bitcoin to people in worse economies
    • People facing capital controls and repressive governments don’t ask why Bitcoin, they ask How to do Bitcoin
  • It is interesting to western countries because it enables applications not previously possible with traditional systems, examples:
    • Instant, private, secure micro-payments
    • Imagine: Autonomous vehicle automatically paying a charging station
    • Till there is wide spread adoption and need for those technologies, Bitcoin will probably remain a speculative curiosity or a cool technology to develop a career around.

The War on Cash

  • “We are not ‘losing’ cash, it is being deliberately taken away from us as a means of transaction” – Andreas M. Antonopoulos
  • Money is the language by which society coordinates and expresses value
    • Financial privacy allows freedom of speech and association, stripping away this privacy undermines other freedoms
  • Modern credit cards and payment systems surveil you in 3 ways:
    • Monitor the associations you form – your network
    • Content of your purchases – Which books are you buying or organizations are you supporting (and later screen for specific content)
    • Track your geographical location – Every transaction reveals your location (no need to activate GPS on your phone)
  • Cash is the last remaining mechanism for people to coordinate and express value without involving other parties and intermediaries
    • “When you take away this [financial] privacy, you lose your freedom, all of the other human rights start to crumble” — Andreas M. Antonopoulos
  • While spying on citizens is illegal in many countries, governments form ‘bilateral spying agreements’
    • Where everyone spies on another country and they all just exchange information

WikiLeaks and Bitcoin

  • In 2012, a financial embargo was started against WikiLeaks after publishing The Chelsea Manning cables uncovering war crimes in Iraq
    • Keep in mind this was an act of journalism by an organization not bound by any confidentiality agreement
    • No judicial action was taken against WikiLeaks – Instead, payment processors were coerced to cut WikiLeaks off the financial system

And it goes Beyond WikiLeaks

  • “Financial surveillance is one of the strongest tools for government control in free societies” Andreas M. Antonopoulos
  • Spanish government applying extrajudicial control against Catalan protesters in Barcelona
  • Hong Kong protesters subverting surveillance by paying in cash for train tickets after their location data was tracked through MetroCard transactions
  • UK government trying to ban Extinction Rebellion global environmental movement
  • Millions of Chinese people exposed to mass surveillance and denied basic transportation services or jobs based on a social credit score
    • Similar ideas are spreading to other nations, namely: scoring people based on their behavior then changing the level of freedom they have
  • In the US, Operation Choke Point attempted to cut off a list of legal industries by shutting down their access to banking services (like cannabis and gun dealers and sex workers)
    • Side effect: Businesses became cash operated which increased violence & risks of being robbed
  • This is a slippery slope – “It was WikiLeaks yesterday, can be Greenpeace tomorrow because they decided that’s a terrorist organization. But, you know, money will never stop flowing to Lockheed Martin”
    • Andreas adds: “Trust that whenever we have seen history start demonizing whole groups of people and throwing them outside of the scope of the rule of law – the circle of people affected gets wider and wider and the circle of people who can get away with it gets smaller and smaller and before long you will find yourself on the wrong end of something

The Choice You Have to Make

  • “There is a deliberate attempt to eradicate cash with the goal of having complete surveillance and control” – Andreas M. Antonopoulos
  • The choice is not between paper money and digital currency
    • 92% of currency today exists digitally in spreadsheets and databases and the future is 100% digital currency
  • You have to choose between 2 different forms of digital cash:
    • Under government control – completely centralized and surveilled end-to-end
      • One wrong election and you can simply turn off opposition’s finances
      • Imagine going to wrong a protest then not being able to buy food at the grocery store
    • Border-less, neutral, permission-less digital currencies where “You as a person and your rights can’t be turned off”

Financial Activity is at the Center of Social Activity

  • On a local level, it ties societies and communities together
    • Cash supports local businesses who thrive on your activity – Adding intermediaries and secondary costs erodes their ability to continue in favor of big chains
    • A direct consequence: You used to getting served by someone you know, now it’s a corporate employee with a checklist and a script
      • “That is basically taking away our humanity and destroying the basis of neighborhoods and societies” – Andreas M. Antonopoulos
  • On a global level, a connected world means people can export their labor directly
    • For instance: you can hire someone in another country to do web design
    • An added benefit: you inject vitality into a suffering economy and help some people out – not as charity but as employment
      • This is impossible to do with traditional financial systems

Central Banks Managing the Economy

  • Imbalances in complex and dynamic systems are fixed by small cycles of corrections
    • Like people stepping in to profit off an inefficiency, or competitors innovating new solutions, or assets of a failed business being recycled back into the economy and used by startups
      • This is a healthy economy
  • The financial system is fragile as a result of constant intervention by central banks
    • Financial services have sabotaged normal functions of open markets by preventing dynamic self-correcting mechanisms
    • The result: zombie companies that are not going out of business, tying up capital and workers
      • They can get 0% interest loan from an insolvent bank that is also not being allowed to go under
  • Instead of supporting commerce, banks and payment networks have become militarized to fight trade wars and impose sanctions
  • “Debt is getting shuffled around in this giant game of musical chairs, at first there were fewer chairs than people dancing, now we just took the chairs away entirely and we are just pretending it’s all cool because no one remembers the last time the music stopped” – Andreas M. Antonopoulos

Bitcoin as Safe Haven

  • The economic bubble has grown significantly larger than 2008 and it was partly reflected in the crypto bull run of 2017
  • “I don’t think that we should wish for a crisis so that we can see how good the life boat is” – Andreas M. Antonopoulos
  • A variety of economic standards will emerge in the long-term – probably mostly crypto
    • Within them a classic power law distribution will emerge (with 1-3 systems dominating most of the value)

A Framework for Newcomers to Bitcoin

  • Bitcoin is a fairly important new technology – it is the internet of money
    • You can gain great benefit by learning the skills and applying them early to your current profession
  • Andreas’ advice: Invest in education, not speculation
    • Knowledge is an investment that doesn’t have volatility and can’t cause bankruptcy
  • Don’t buy Bitcoin, earn it – Participate in the new economy by exchanging your labor for bitcoin (You don’t buy dollars, your earn them)
  • If you do decide to invest, remember: “Not your keys, not your coins”
    • Learn how to control digital keys – it is a fundamental new skill of the 21st century
    • Invest a small amount and find people who teach you how to use the tools, not promise you easy riches
      • A tool Podcast Notes recommends using is hardware wallets like Ledger & Trezor to securely store your digital keys – They are convenient, reliable, and support over 1000 coins & tokens
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Notes By Mostafa Khaled

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