Why Bitcoin Is Not Like PayPal or Venmo – Bitcoin Magazine
This is an opinion editorial by Mark Maraia, an entrepreneur, author of “Rainmaking Made Simple” and a Bitcoiner.
Bitcoin is not like PayPal or Venmo. This will be obvious to anyone who understands money. As Shakespeare might say, “Yes, there’s the spark.” Almost no one understands money. We are never taught how fiat money actually works at home or school or work…even when you work on Wall Street or run the country. I’m sure very few politicians could pass a simple exam in money. I’m almost certain none of our federal employees could. And I would guess that very few CEOs or CFOs of Fortune 500 companies can either.
I am not aware of any surveys that assess the general population’s understanding of money or our banking system. We definitely don’t learn that in school. Simple questions like:
- “What is fractional reserve banking?”
- “What was the base layer of the global monetary system until 1971?”
- “What is the base layer of the US money supply now?”
…are complete mysteries to 99% of the population. But not to Bitcoiners.
Bitcoin is the base layer of a new digital and decentralized money system that favors no. It allows two parties armed with nothing more than a cell phone to send value via the digital rails of Bitcoin from the United States to anywhere in the world, almost instantly, without intermediaries. That’s why governments hate it so much!! Venmo and PayPal are not and will never be the foundation of a new digital and decentralized money system. Venmo and PayPal are second or third tiers in our centralized fiat money system. They make life easier for many, but they come at the cost of centralized control and state economic surveillance and repression. All this talk about CBDC makes me sick. Why? Because a CBDC is nothing more than a surveillance coin.
At one point in history, gold was the base layer of the analog and centralized monetary system. Government currencies – now all fiat – were built as second layers on top of gold. Then in 1971, Richard Nixon pulled a monetary magic trick that we still feel the effects of today. He unilaterally severed the remaining link to the dollar that could be redeemed for gold. (Note: This ability had been taken away from American citizens in the early 1900s. What Nixon broke was another country’s ability to receive gold in exchange for US dollars.) So began a monetary experiment that continues to this day.
Why was it a magic trick? Because, presto chango, the dollar—not gold—was suddenly the new foundation of our monetary system at that moment. Everything in our money and banking system today is built on top of it. I’m sure no other country would have approved the idea of an “unbacked dollar” becoming the world’s reserve currency at Bretton Woods if they knew the link to gold would be broken after 27 years. It was a classic bait and switch or as most bitcoiners call it – a rug pull.
The final example of why it is important to distinguish between the payment use case comparing bitcoin to PayPal and Venmo, and the true narrative about money that bitcoin is actually about, is the collapse of FTX.
Too many people are misled by claims that there are “superior” unhealthy cryptocurrencies that promise faster and cheaper payments. What they may not realize is that these promises are only made based on the centralization and lack of security that these altcoins are built upon. Many who fell for this invested on exchanges like FTX and may have ignored the Bitcoin Maximalist mantra of self-preservation. Had one been aware of the real underlying promise of bitcoin – that it is sound money that cannot be controlled by anyone, given self-custody – it is highly unlikely that they would have held assets on a cryptocurrency exchange like FTX.
As my favorite spiritual text likes to remind me, “We are in a prison of our own making.” What is the get out of jail free card? Buy or get paid in bitcoin. Switch to a bitcoin standard.
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.
