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Almost 20 year ago Bitcoin was Predicted

James Dale Davidson, an American and a much younger man, is renown for making predictions, not all of which came about. He’s famously a Bill Clinton hater, but Mr. Davidson is best known for making the consistent prediction of the US economy being just this close to disaster. In 2008, of course, he was right. He’s a founder of the National Taxpayers Union, and is a frequent contributor to Newsmax.

Mr. Davidson met Lord Rees-Mogg while at Oxford nearly forty years ago. A chance encounter over antiquarian book searches ended up in a friendship and a working relationship lasting decades. It first evolved into newsletters, which then became books such as Blood in the StreetsThe Great Reckoning, and, of course, The Sovereign Individual, the subject to which we return.

bitcoin

“Inevitably, this new cybermoney will be denationalized. When Sovereign Individuals can deal across borders in a realm with no physical reality, they will no longer need to tolerate the long-rehearsed practice of governments degrading the value of their money through inflation. Why should they? Control over money will migrate from the halls of power to the global marketplace,” the claim, again twenty years ago.

The Sovereign Individual is an argument, and a great deal of it presupposes an inchoate sense of American libertarianism upon the rest of the world. That’s problematic for a host of reasons, not least of which is, well, most of the world worships governance at various forms of state levels. Talk is incessant about what government should be doing, not how less of it should exist, and this has been a trend for as long as anyone can remember.

Free Money, Free People

That aside, Mr. Davidson and Lord Rees-Mogg believe a kind of 21st century clash of Western Civilization to be coming. Governments are inherently parasitical, taking from the productive classes and redistributing based upon favored groups. Governments are able to be this perverse middle-person, picking winners and losers, because of the power of its purse. A kind of borderless, untethered digital currency would be, if popularly adopted, its sure demise. The Atlas shrugging, if you will, of the world will begin as more of the productive sectors take their lives online, the book insists, and away from landed government.

All of human life will radically change under the rubric of encrypted technologies. Free from governmentalism, state nannies, and minders, the productive will be free to streamline goods and services and labor in ways previously not considered. Even government’s main reason for existence, the monopoly on violence, will be virtually done away with as a result.

 

Mr. Davidson and Lord Rees-Mogg make no bones about what might happen in the wake of government services, the welfare and warfare states, being diminished. It will not be pretty. At least the engine of society, its movers and shakers, the natural aristocracy, will be able to start civilization anew, going where they’re appreciated rather than being chained to ethnic or political country-persons.

Freeing money means freeing people. They explain, “Each transaction will involve the transfer of encrypted multi-hundred-digit prime number sequences. Unlike the paper-money receipts issued by governments during the gold-standard era, which could be duplicated at will, the new digital gold standard or its barter equivalents will be almost impossible to counterfeit for the fundamental mathematical reason that it is all but impossible to unravel the product of multi-hundred-digit prime numbers. All receipts will be verifiably unique,” which is so exactly spot-on it can take a reader’s breath.

“The verifiability of the digital receipts rules out this classic expedient for expropriating wealth through inflation. The new digital money of the Information Age will return control over the medium of exchange to the owners of wealth, who wish to preserve it, rather than to nation-states that wish to spirit it away.”

Plausibility

“Use of this new cybermoney will substantially free you from the power of the state,” becomes their almost anarchic thesis, though they do allow for government in pockets.

 

Bitcoin doesn’t require all of the above to work. It works on several levels, as governments could just as easily adopt a version and restrict pathways and physical transacting in any number of procedures. I do not believe it will snuff out fiat currency nor bring down governments. So on that score, I disagree with TSI, though I root for much of its conclusions.

Governments are unnecessary as they are evil, and they exist solely on their ability to bully and cajole. Try leaving. Try not paying taxes. Try to live just a tad outside of its vast laws. You’ll find quaint notions like consent of the governed to be grave myths right up there with Santa Claus.

Bitcoin can a be a way to escape some of government’s machinations, for sure. However, governments are proficient in exactly two areas: expropriation and killing. The latter enforces the former. That a great many, perhaps the vast majority, of humans believe their very lives are the result of government policies also does not bode well for predicting its demise. Whatever the case, TSI borders on the brilliant, and as a thought experiment is well worth your time.

What do you think?

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Written by Ravi Gupat

Ravi grew up in India and graduated in Economics. He is a serial entrepreneur who has founded and exited several companies in tech and media over the past 15 years. He is also an early stage investor and advisor in various blockchain-based companies.

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