Money Relationships Help Understand Bitcoin – Bitcoin Magazine
This is an opinion editorial by Mark Maraia, an entrepreneur, author of “Rainmaking Made Simple” and a Bitcoiner.
“What is your relationship with money?”
I’d argue that it’s a more intimate question for many than “Are you happily married?”
I am sure that most readers have never thought deeply about the relationship with money. Those raised with a scarcity mindset will never have enough. This is usually taught by parents and family at a very young age. It is also reinforced by fiat. Losing 7.7% of your purchasing power each year is likely to induce a mindset of scarcity. Those raised with or those who cultivated an abundance mindset were programmed differently. Regardless, your mindset around and about money is ultimately a choice; you can change or rewrite the program. For some people this is easy. For others, it is almost impossible. And there are people who have a lot of money but are still not satisfied.
In our modern world, many people believe that money is essential to life. There are some who go overboard and idolize money. They worship making it and they worship the people who make a lot of it. If you have or earn large amounts of money, count your blessings. A man or woman who has few needs lives freer and richer than the rest.
Most of us have a special – often invisible or unexamined – relationship with money. For some it gives them their entire reason for being in this world, while for others it is a means to an end. When we observe events like Prime Minister Justin Trudeau’s freezing of Canadian truckers’ bank accounts or Biden’s theft of Russian reserves, we begin to realize some frightening realities about the nature of money. If you don’t have physical possession of the monetary asset, all you have is an IOU, and that IOU is very flimsy if the governing authorities decide that your words or actions don’t align with their worldview. Usually the IOU is from the bank or credit union where you deposited “your” money. The only thing is: It is not “your” money once it is deposited in the bank.
Bitcoiners are fond of saying, “Not your keys, not your coins.” What many non-Bitcoiners don’t stop to consider is that the money in their bank account isn’t really theirs. Zoltan Pozsar, global head of short-term interest rate strategy at Credit Suisse, says we have entered a new era of Bretton Woods III, involving inside money and outside money and argues that commodities will underpin international monetary relations. Insider money is money that has an intermediary, such as a bank. All the money you have is essentially an IOU. Outside money is money that is outside the banking system. It can’t be taken away from you by denying you access to an account, nor can they inflate it.
Money you earn for the work you do is proof of the work. If you’re lucky, you earn more than you need on a daily basis. In the days of paper money, that meant exchanging your precious time, labor and life energy for green strips of paper and small metal discs. Today, you trade your precious time, labor and life energy for pixels on a computer screen. When you look at it through that lens, you begin to realize that money is just a symbol. If all we have is an IOU with a bank, all kinds of mischief is possible from governments and banks. This can include bailouts, bail-ins and outright theft. This is deeply disturbing. Our reliance on government-issued currencies means our wealth can be confiscated at the touch of a key or the stroke of a pen.
The question can initially be broken down into two very important and personal questions:
What is your relationship with the US dollar?
I grew up very lucky. I lived in a home that always had food on the table, a roof over my head and the privilege of not having to worry about money. A classic middle-class upbringing through high school. I went to a public school and a private college, where I paid for half my education and worked as a professional when I got out of school.
I was lucky enough to grow up and never thought much about money. It was low on my priority list and remains so to this day. I rarely worried about having enough and generally took money for granted. Yes, in the early days of my career I was living paycheck to paycheck, but I had savings – albeit meager – and parents who were a financial backstop. A family banker of last resort, so to speak.
That upbringing was both a blessing and a curse. Why a curse? Because I’ve never thought much about money. Aside from the unspoken values modeled by my parents, I was never taught about money, our banking system, or our financial system. Those of us who live in the United States enjoy the added privilege of having the world’s reserve currency in our pockets. That privilege is something most Americans take for granted.
While today the US dollar is still considered the world’s strongest currency, it is no longer a reliable store of value. Even the most privileged people are starting to notice after watching the Federal Reserve and our government put absurd amounts of money into circulation.
All Americans alive today grew up with the dollar as the world’s reserve currency. For most people it means nothing. Most of us can probably remember the first time someone handed us a $5 bill or some other denomination when we were young and we felt a rush and thought. “Wow, I’m rich!”
Do you have strong feelings of pride in America and its founding ideals? Could it affect how you see the dollar? Do you have feelings of shame about the perpetual wars we have been fighting since Vietnam? Although it may seem irrelevant, these feelings will dramatically affect your relationship with your country’s currency.
Are you a money manager in a hedge fund? Are you a millennial? Are you a boomer? Are you a venture capitalist? Each will shape your relationship with the world’s most sought-after fiat currency. Do you see your bank account or access to capital as a source of security, a source of safety or a source of power? Do you see having a bank account as a privilege? These are all symbols. The majority of people in the world are unbanked. As we learn in 2022, these symbols lose their luster and are highly illusory.
Enter a new child on the block that was quietly created on January 3, 2009.
What is your relationship with Bitcoin?
A large percentage of people in the Western world reject it. Like all new technology, we find it hard to trust something we don’t understand. Until we have no choice. Canadian truckers weren’t interested in bitcoin until they had to be. I believe we have now entered a period where the transgressions of the fiat system leave us with no choice but to learn more about bitcoin.
This is a guest post by Mark Maraia. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
