Bitcoin Brings Financial Literacy – Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides

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Bitcoin will lead to an explosion in financial literacy the same way the printing press caused an explosion in literacy in the 1400s. Although it was impossible to calculate the literacy rate before the invention of the printing press movable type, we know that literacy rates today exceed 95% in many countries.

I am convinced the same can happen with financial literacy because of bitcoin. Best-selling author and educator Robert Kiyosaki is the first person I know to explain that most of us are “financially illiterate” and he’s been a champion of financial literacy since publishing his bestseller Rich Dad Poor Dad in 1997. One of my favorite quotes on money and our banking system is by Henry Ford who said, “It’s good enough that the people of the nation don’t understand our banking and monetary system, because s ‘they were doing it, I think there would be a revolution before tomorrow morning.

After studying money, the US banking system, and bitcoin over the past several years, I have come to the surprising and mind-boggling conclusion that even though we are two decades into the 21st century, hardly anyone understands money, the finance, currency or our banking operations. system! This is the case of the captains of finance, the kingpins of Wall Street and almost all elected officials. Almost all criticism of bitcoin is based on ignorance of money, what it is, or what it is for. Or these critiques are based on a deeply flawed understanding of our banking system. This ignorance extends to our understanding of digital scarcity, cryptography, Austrian economics, game theory, and the comparison between the old rails of the US banking system and the new rails of the bitcoin protocol.

It’s fair to say that I, too, didn’t fully understand money or the banking system until I started studying bitcoin. Bitcoin is like learning a fourth or fifth dimension for money. Even today’s most seasoned silver “experts” may know three dimensions of money, but not a “fourth or fifth.” The three dimensions of money are time, space, and scale or mass. There was no fourth or fifth dimension of money until bitcoin was invented. Although this is a topic for another article, consider that until Bitcoin there was no money without mass and weight that could be sent over the internet or held in your mind.

When you start to do your bitcoin homework, you need to examine your assumptions about money. There is an old proverb that applies: “fish discover water last.” Well, the same is true of a person’s financial and money. Those who work in finance discover money last precisely because they think they understand it, and they have been professionally trained by people who have similar blind spots about money and our banking system.

Let’s take a look at some widely shared myths or assumptions about money that are tragically wrong:

“The Federal Reserve has the constitutional power to issue US dollars.”

False. Our governing documents do not give Congress, let alone a private company wholly owned by a small group of banks, the right to print money. In fact, many of our founders were very negative about the impression of money and credit.

“The government has always issued our currency.

This is completely wrong but that does not mean that it is not widely shared, repeated and believed. There was a period during the 1800s when banks issued their own notes. In other words, there was competition rather than monopoly money. It was also at a time when we rarely saw ups and downs in our economy. See George A. Selgin’s 1998 book “The Theory of Free Banking: Money Supply Under Competitive Note Issue”. It is only since the creation of the Fed in 1913 that we have seen highs and lows and runaway inflation in our economy.

“The Fed is a quasi-government entity.”

False, this is a private company owned by a small number of banks and not accountable to anyone. They make decisions in secret, behind closed doors, and only tell you what they want you to know. Plus, when they start printing, they get seigniorage, which is a hidden way of saying they get a certain percentage of every dollar printed! This fact alone should make you shudder.

“Money is king.”

In the age of uncontrolled money printing; money is a garbage can. Every dollar the Fed puts into circulation (or worse, delivers it to the bank in the hope that it will lend it) reduces the value of the dollar in every person’s pocket or bank account. And the small handful of banks get richer at the expense of the citizens. It is not unfair to say that the Fed takes from the poor and gives to the rich. 1 / infinity = zero.

“The Fed’s 2% target inflation rate is to our advantage.”

False. Again, inflation is a hidden form of taxation or theft. Do not believe me ? Since 1913, the US dollar has lost 98% of its purchasing power and is falling faster and faster! And smart money in business and on Wall Street says our government’s monetary response to COVID 19 in 2020 means the inflation rate is closer to 15-20%. A better name for inflation is “theft”.

“Deflation is bad.”

Still wrong. Deflation is an incredible asset to our economy, although you will never hear anyone in government admit it. See this article by Jeff Booth titled “The Greatest Game”. Deflation means we all get more for less. Considering the impact of technology on almost every industry, including money, we now have a computer in our hands that has the capacity to send money around the world for next to nothing.

“The American banking system is based on free markets.

Again, this is 100% wrong. The US dollar is a monopoly currency of the worst kind. The American banking system is fundamentally flawed because it is based on socialism. We allow private gains and socialized losses. See Robert Breedlove’s article “Masters and Slaves of Money”. The Fed has been central planning and setting interest rates since Alan Greenspan in the 1980s. We all learned very quickly in 2008 that the US banking system allows “private gains” to banks and socializes losses. . Heck, we even now have the most socialist politics of them all as the predominant narrative of our time, we now have banks that are “too big to fail”. Karl Marx would be proud.

The good news is that those who are willing to do their homework can level the playing field. It does not matter whether you are poor, of modest means, or otherwise disadvantaged, because everyone can understand money if it is open to money. minded and eager to learn. This means that people can have an understanding of money that surpasses those in the billionaire class just by doing their research. The best time to start educating yourself about money and bitcoin was 10 years ago. The next best time is now. And don’t stop until you’ve spent 1000 hours on it.

This is a guest article by Mark Maraia. The opinions expressed are entirely theirs and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

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