An Improved System:
One of the most important issues in that is talked about in the world today is climate change. Humans are over consuming resources and causing damage to the world. I originally thought about “going green” as the solution, but realized that this is not enough. The problem runs deeper. Some would argue that the earth is overpopulated and whether or not that’s true, reducing life is never an option on the table. Human desires and needs would be the next logical option to reduce.
Why do we consume so much?
The definition of necessity differs from person to person.
What is the meaning of necessity?
-something necessary or indispensable: food, shelter, and other necessities of life. the fact of being necessary or indispensable; indispensability: the necessity of adequate housing. an imperative requirement or need for something: the necessity for a quick decision.
This definition is probably much different compared to someone in a first world country that perceives “necessities” as all this, plus internet access, one or more vehicles, many personal belongings, and many other things. This difference in perspective is the cause of over consumption. Let’s dig deeper into why this perception exists to see how it could be solved. I’m not saying wants and desires are only bad, but that how they are fulfilled could be an issue.
Human psychology determines wants and desires. The best theory I’ve come across to describe this is called mimetic theory (Rene Girard’s theory).
This theory explains why humans end up in violent struggles over scarce resources, as they always want whatever other people have. Even if they have their basic necessities to live. I would say that deep down, humans are naturally good and have always been drawn towards methods of peace. These systems are what determine how much violence we experience. When systems that have contradicting rules overlap, violence ensues. Systems that aren’t designed to accomplish our intended outcomes cause violence as well.
As Yuval Harari explains in “Sapiens”, humans have evolved to use language systems, economic systems, religious systems, and others to achieve cooperation. Language systems are basic rules to communicate that allow less misunderstanding, which prevent violence. Economic systems are basic rules to communicate trading value, that allow less misunderstanding. Religious systems (religions) are basic rules to communicate leadership hierarchy with morals, to avoid violence. All these systems are basic rules that allow improved cooperation in some way. Every person falls into using systems of rules in every part of their life. These systems form beliefs. Everyone believes that certain things have values because of psychology.
Here is someone’s description of how environmentalism can be compared to a religious system:
Here is how Bitcoin can be compared:
This description shows the comparisons to religious systems in extreme ways (some traits are exaggerated but it proves the point).
Every system can be compared to each other in this way as they are all just organized rules that humans choose to believe. All beliefs can relate to each other as they are all just systems. This is why Yuval is able to use logic to summarize our history, present, and future. He makes one of the greatest claims in history. “Humans are algorithms”. What is an algorithm?
In simple terms, it is a step-by-step solution or system. Each step has clear instructions. Like a recipe. Long Division is another example of an algorithm: when you follow the steps you get the answer.
Essentially humans are algorithms that adopt or create other algorithms (systems) to evolve and cooperate. We create the most efficient ones that we can use to get a desired result. From this point of view we can break down the ones that we use today and decide if they are accomplishing our desired result.
All the systems that we use today like your appliances, phones, vehicles, and everything else are designed by engineers (experts at understanding and creating systems). Every time you learn something you create a new algorithm and store it in your mind as a habit. Experts in every field form specialized algorithms to repeat certain tasks (surgeons, lawyers, scientists, etc). If you learn from experts then you don’t need to redesign the algorithms. This is why humans created an algorithm for learning (the education system). Breaking these systems down to optimize them is the process of applying science and engineering, which would seem to be the most effective way to get what we want.
Redesigning a better system:
Let’s assume that humans want to accomplish these tasks:
- Maintain human rights while maintaining a sustainable earth
I have to point out that redesigning the system that we use today wouldn’t be necessary if all these tasks were already achieved.
We first need to consider that the system needs to be based things that humans all can agree on:
- must be based on a shared belief like science and logic (as humans rely on these to survive)
“Large numbers of strangers can cooperate successfully by believing in common myths. Any large-scale human cooperation — whether a modern state, a medieval church, an ancient city or an archaic tribe — is rooted in common myths that exist only in people’s collective imagination.”
― Yuval Noah Harari, Sapiens: A Brief History of Humankind
- must be scalable and available(every human should be able to take part)
“Each year the US population spends more money on diets than the amount needed to feed all the hungry people in the rest of the world.”
― Yuval Noah Harari, Sapiens: A Brief History of Humankind
- must be based on fair rules and trust that humans cannot corrupt so it may remain balanced
“Money is the most universal and most efficient system of mutual trust ever devised.”
― Yuval Noah Harari, Sapiens: A Brief History of Humankind
- must incentivise human rights and sustainability for outcomes
“Biology enables, Culture forbids.”
― Yuval Noah Harari, Sapiens: A Brief History of Humankind
- must be created in a way that humans can adopt (Built on something like the internet that everyone can get access to)
“By 2021, more members of the global population will be using mobile phones (5.5 billion) than bank accounts (5.4 billion), running water (5.3 billion), or landlines (2.9 billion), according to the 11th annual Cisco Visual Networking Index (VNI) Global Mobile Data Traffic Forecast for 2016 to 2021.”
- must be adaptable in a democratic way that people need a consensus choice over
From an engineering point of view there are two types of systems. These are built around centralized control of the system and decentralized control of the system.
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As a system with centralized control does not provide incorruptible rules, trust, democracy, availability, sustainability, etc, it should not be used. If we break down most of the systems in use today like governments, economies, and religions, we can see that they are built around centralized control. This has lead to most of our problems today, as they tend to end up corrupted.
Our new system must therefore be decentralized. It must be based on things humans can all trust (science, logic, and sound money). It must be available and scalable (internet based and open sourced so everyone can trust it while provide suggestions for improvements). It must be adoptable, using the systems in use today. It must incentivise human rights and sustainability as well. This system must also fulfill the needs of mimetic theory. It must provide a scapegoat or common “enemy”. Because science is the belief in trust (repeatability), measurement, and natural laws, the inverse would be the “enemy”. It would seem much better for humans to align their faith in science to aim their greedy energy towards combating lies and misunderstanding and producing innovation that everyone can experience. This would make competitive innovation the goal instead of violence. It would also incentivise more collaboration and merging of companies if a finite currency is used. This is what the economic system claims to do but fails at in many ways because of its’ centralized control structure, ending in violence. This forces a misalignment of incentives that manipulates humans into becoming a commodity, instead of a customer that should be served. When systems are decentralized, they mimic the natural environment and promote competition instead of monopolies. If humans were put into cages or zoos, this would mimic a centralized system where the zoo keepers are monopolists with central control. Decentralized control mimics free wildlife and competition so those that provide more trusted and desired innovation are proportionally rewarded. This is comparable to socialism and capitalism, respectively.
Capitalism has made a bad name for itself as people can only imagine what they think is capitalism. What we are used to is centralized capitalism, which is corruptible and unfair. Most of us have never experienced decentralized capitalism as it’s never been an option because of the system design. The closest thing we can compare it to is before the systems became corrupt (currency not backed by a scarce commodity and susceptible to debasement). The other times are in history where small villages/tribes use scarce currencies for trade, before they were manipulated from outsiders. The flaw is centralization.
These centralized systems miss align human rights and sustainability. To understand why, we need to imagine a world with only one currency like bitcoin (finite and can be sent over the internet). In this world all the bitcoin in circulation represents all other perceived value available to humans. This is because every good or service could be exchanged for some amount of bitcoin. Because bitcoin is finite (only 21 million ever to be produced), it will always represent the value of everything else available to humans. This means that everyone that provides a good or service in the world, will be able to earn some bitcoin. The value of their bitcoin/satoshis will increase whenever other people create something valuable that people will exchange for bitcoin. The benefit of bitcoin is that it forces pure price communication and displays real value. This means that everyone will experience more abundance as the purchasing power of bitcoin increases when innovation happens (creates a positive sum game). This is what creates incentive for collaboration between people and businesses. This is called deflation (increase in purchasing power). This is something humans don’t get to experience much of because the government has centralized control of the money printer. Real market value would also cause any corrupt businesses to be out competed by honest ones (any business that tries to sell or create something for less than its true value will be exploited).
The governments claim that because they’ve decided to borrow from the future, through a ponzi scheme called fractional reserve banking and bond/treasury bill creation, that now we are indebted to pay off our ancestors debt. The government makes borrowing available to everyone and usually necessary to afford all the overinflated assets that we all are told that we need in life to survive. Housing, certain companies/stocks, education, retirement, and others. This system is built by allowing banks to lend more money than actually exists (fractional lending). This is why during economic collapses, banks cannot afford to return money to their customers (bail outs from the government by creating more debt for taxpayers to payoff in the future or bail ins from taking money right from their customers). This all happens because it happens slow enough for humans to ignore and mainly because of centralized control. The people at the top or in politics receive the most benefits from money printing.
By manipulating the system, it distorts the real value of goods and services. This is because money is a form of language. When kids on a playground play, they usually end up creating a language network of value. Marbles, Pogs, crazy bones, or any other toys or scarce items become currencies and language protocols. This works well but often gets violent when value is manipulated (distorted in some way). When a kid gets angry because another kid has a piece of candy, they think they won’t get a candy because it’s scarce or unavailable. As soon as an adult gives the neglected kid a piece of candy as well, all chaos becomes order quickly. This works in the opposite as well. If a stocked bowl of candy is available to the kids, eventually they will become accustomed to this type of candy and it loses its value. The government works very hard to maintain their scheme because of this. It helps to keep the vast population uninformed and uneducated. I’ve always wondered why finances are not taught in schools. Financial schools are designed in a way to provide only curious students with rules that they can use to benefit from the system in a way to pacify them with a better life (Keynesian economics). Why would they worry, if they benefit and think it’s because they are experts in their field. Ignorance is bliss.
Psychology plays a large part in maintaining the scheme. They allow layers of monopolies and regulations to keep distance from the truth. Any monopolized company like Facebook or Google is a benefit to them. It keeps people addicted to social media or information by abusing dopamine loops. It turns our time and attention into a commodity for advertisements. It hacks our psychological vulnerabilities. It uses mimetic theory against us and causes depression, when we don’t have the same life that other people our age portray on social media. Suicide rates have been increasing since internet company monopolies were formed.
Centralized control uses incentives to manipulate our psychology:
Because this system uses our psychology against us for their benefits, it also creates over consumption. This causes a world that is unsustainable. Think of a child that you want to teach the value of saving. How would you teach this?
You would probably need to explain what scarcity is in some way. Maybe in the form of a restricted allowance. The restriction creates scarcity. Many people grow up never learning what saving is. They are usually considered spoiled or just financially uneducated. Another name for the habit of saving is time preference. Someone with a low time preference saves for the future and thinks ahead. High time preference is the opposite (takes on debt and thinks only of the present). This trait (like all traits) is taught from childhood, but it also depends largely on environment as well. If a child is given some food and told that they will not receive dessert until they finish what’s on their plate, they will learn high time preference as there is incentive to consume in the present. The same goes for when you give an allowance and then say you will not give them more because they still have money saved. Another way is by over providing value. If you give kids many toys, most of them become less valuable because they are abundant.
This happens with adults as well. When you see companies like De Beers. De Beers is known for largely controlling the $80 billion diamond industry, creating artificial scarcity in diamonds to drive up prices and control the sense of a diamond’s allure. This is distorting value to scam customers into buying what they think is scarce. The same goes with the government. They do this by artificially creating systems based on debt that financially illiterate people are told is good, to create demand for printed money that isn’t backed by anything scarce. Once people are indebted, they now need to work the widely normalized 40 hrs a week until retirement. The system is strategically set up to keep large items in life inflated. It starts with education costs, or sometimes new vehicles. Then housing and renting costs. Insurance costs (mostly monopolized). Retirement costs. At the very end they have kept most people uneducated and take back most of the accumulated assets back to the government through tax schemes. The rich families pass on education and tricks to avoid taxes like using tax shelters and corporations. How to leverage debt and what assets to accumulate. Generational wealth and knowledge becomes relied upon to stay at the top of the pyramid.
Time preference plays a large role in explaining how adopting bitcoin causes a chain reaction that solves many of the problems humans face today. If we want to save in the present because our savings naturally grow instead of shrink, it forces innovation and engineering to adapt. Everything created, needs to become sustainable and reliable in order to compete for our energy. This means companies use less resources to do more in a fiercer environment. It forces the world to become more efficient. The incentive system is inverted at a base level to consume less instead of always more. When you consider most fossil fuels are used to make petroleum products like plastics that are used everywhere, imagine when we stop over consuming these because they are made to last many times longer. The system would solve these “unsolvable problems" we are facing. We just need to wake up and think differently about our belief system and money.
Here is an article from a very successful entrepreneur and investor (Anthony Pompliano) talking about his concern for hyperinflation:
Inflation Is Killing The American Dream
Listen now (6 min) | This installment of The Pomp Letter is free for everyone. I send this email to our investors…
The whole system is failing as more information becomes available and the efforts to counteract exponential deflation from technology with exponential inflation of the currency. People are becoming aware and aren’t happy about it. Usually this ends in a revolution or war but maybe this time it could be more peaceful. Bitcoin can help this. Today it’s not considered a conspiracy as even people that worked for the government are concerned.
When the population stops being manipulated by centralized control, they will become aware that they can stop climate change buy reducing consumption as they will experience deflation (abundance) from lack of exponential inflation. If people consume and buy less in a competitively innovative environment, then they will only buy something when it drastically outperforms what they would be replacing. This is why we saw things built to last when before the systems became manipulated. Most older people will assure you about this (“back in my day, tools were built better"). Incentives were different then and competition was encouraged. Now everyone gets a participation reward and offending someone is a crime. Less work and more purchasing power sounds counter intuitive, but the governments have been working very hard to convince you that it is impossible. This is all because most people don’t understand the compound effect. Jeff Booth explains this well.
The Greatest Game
“You never change things by fighting the existing reality. To change something, build a new model that makes the…
I was lucky enough to grow up with savers as parents that believed in spending within your means and that debt was bad. I was always confused when every single financial “advisor” told me that credit was good and everyone needs a credit rating to get through life. This forced me to educate myself and read many books. I never wanted a mortgage so I spent a year learning and reading about how they work to avoid front end loading. This all took a large amount of learning and sacrifice as I would work overtime along with shift work to save money. I sacrificed most of my twenties for what I have now. This is ridiculous that anything to do with money isn’t taught in school, even though everyone spends their whole life working for money. I’ve never stopped self learning and I eventually found out why and how the system is more broken than I thought.
A system has already been designed to solve these problems and it’s called Bitcoin. Bitcoin is an off ramp from the failing system.
Bitcoin was engineered to fix these things but is constantly being written off as a scam or ponzi scheme by the people with the most incentive for maintaining our failing system. Whether or not the people in control of the centralized power and information are intentionally abusing it, the system needs to be replaced.
How bitcoin incentivises human rights and sustainability are often the most questioned traits. When you realize that “green energies" aren’t going to scale quick enough to sustain the large population, you will realize incentives for less consumption is necessary. The corrupt system we are using doesn’t want to let that happen, as it means a massive loss of control to them. To best understand this I would suggest reading a few books. If bitcoin has the potential to fix any one of these issues, then it is well worth your time to learn about it.
- The Price of Tomorrow by Jeff Booth
- The Bitcoin Standard By Saifedean Ammous
- Inventing Bitcoin by Yan Pritzker
I try to summarize how bitcoin would create incentives for human rights and sustainability in my other articles and attached informational links.
I also suggest watching videos by these people that are trying to improve the world: