This is an editorial by Leon Wancome, one of the first students of financial economics to write a thesis on Bitcoin in 2015.
This article is the second in series I aim to explain some of the benefits of using Bitcoin as a ‘tool’. The possibilities are endless. I chose three areas where Bitcoin helped me. This article shows how Bitcoin made me more optimistic about the future because it allowed me to manage my money efficiently and build savings. You have developed a lower preference for time, Which means I value the future more, which leads me to act more vigilantly in the present. All of this had a positive effect on my mental health.
The horrors of inflation
When money loses its value, it negatively affects the society. This process can be observed in countries with high inflation. A tragic historical example of hyperinflation in the Weimar Republic, the government of Germany from 1918 to 1933. Germany lost the First World War and was forced to pay huge reparations. Then Germany plunged into a financial crisis. In order to stimulate the economy and pay off compensation debts, the German national bank, Reichsbank, printed huge sums of money. Their money was devalued so much that people lost all their savings and the country plunged into an economic crisis. In 1922, the price of a loaf of bread was about 160 marks, and by the end of 1923, its price was 200,000,000,000,000. By November 1923, a dollar was worth one 4,210,500,000,000 German marks.
As a result of inflation, the Germans went into despair. The population was demoralized, and the resulting inequality led to a rise in populism. Adolf Hitler took advantage of this ordeal and manipulated the masses to believe that he and his Nazi followers could restore Germany to its former glory. His reign in Germany was marked by atrocities and ended in one of the most brutal wars of extermination in human history. This shows that the devaluation of money leads to the devaluation of society and ultimately to the devaluation of everything – including human lives as demonstrated by the crimes in Germany and the horrors of World War II and the Holocaust.
Monetary inflation leads to the decay of society.
This was the case in the Weimar Republic and remains the case today. Worldwide financial uncertainty and monetary inflation are making it more difficult to save, build wealth, and plan for the future. An epidemic of despair and fear is sweeping the world. One might think that central banks have learned from the past, but this is unfortunately not the case. A good and tragic example is Lebanon: Banque du Liban, Lebanon’s central bank, has distributed a surplus of Lebanese currency in recent years in response to the deepening economic crisis that has plagued the country since 2019, and has plunged three-quarters of its population into poverty. As expected, excessive money printing made matters worse. Inflation rate in 2021 154%. Inflation forecast for 2022 is 178%. Even though people have more money at their disposal, everything is getting more and more expensive in real terms.
With the state running out of money and fearful of running the banks, it restricted citizens’ access to the banking system. In response, on September 14, 2022, Sally Hafez, a young Lebanese activist, Robbed a bank in Beirut to demand its own savings So she could pay for treatment for her sick sister, which the bank apparently refused to hand over to her. This begs the question: How can a young woman in the prime of her life be forced to rob a bank? Fear of the future torments the mind.
Bitcoin and mental health
The cause of the problem is the state’s monopoly on money. Historically, when governments or central banks fail in their monetary policy, they cling to power by printing money to continue financing their activities. The population then suffers from currency devaluation, price inflation and the resulting uncertainty. Bitcoin works differently. Bitcoin is produced at a rate that was determined when the system was created and is known to the public. There will never be more than 21,000,000 bitcoins. This certainty carries over to other aspects of life, for example, you can be certain that if you choose to save the fruits of your labor in bitcoin, you will be rewarded in the future because bitcoin is designed to be anti-inflationary. With Bitcoin, you can provide for your future needs, your children and your loved ones. When you are old and less productive, you have savings to live on. Most importantly, no authority can stop you from owning, storing or sending bitcoins. The Absolute property What we have in Bitcoin is unprecedented and a reason for great hope.
Bitcoin is a monetary constant. Like other constants in the universe Creates the foundation On the basis of which humanity can interpret the information to look to the future with confidence. Ideally, money should give a sense of certainty about the future. Bitcoin does that. Yes, the price of Bitcoin is volatile, but accepting more uncertainty in the short term is acceptable Worth having more certainty at the long term. Bitcoin can make us optimistic about the future.
Dr.. Seif El Din Amous Books on the Effect of Soft and Hard Money In time and how this basic critical instinct can spread to other behaviors such as choosing what to eat, how to build, and the value of art and culture. A society that uses soft money is subconsciously filled with the realization that value is melting away and must be spent quickly. He will prefer immediacy, sacrificing the future in search of gratification now. For example, since its inception, the euro’s business philosophy has been Predictably lose 2% of its annual purchasing value.
Bitcoin offers an alternative because it is inherently scalable. Money that cannot be inflated at will rewards good behaviour, low time preference, high savings, planning and responsibility. Bitcoin offers a world that encourages saving for yourself and your family for the future; A world that allows you, your family, and your community to plan for generations. “Bitcoin empowers human potential Through his emotionless application of consensus-based rules that give us predictability, and therefore reliability.”
More importantly, as John Vallis so eloquently described it in a conversation with Peter McCormack about “What did bitcoin do?The podcast, Bitcoin makes us have a more optimistic view of the future. Vallis explains how many people are more optimistic “a greater sense of freedom because of the qualities of Bitcoin and what its use allows people to: 1. take more responsibility and 2. see a future on the horizon different from what they are.” I’ve seen it before “.
Later in the episode, Vallis said:
“How much anxiety in life comes from a job and a job and money and all of these things? For most people… when you are in relative disadvantage, you are more likely to be corrupted by your needs, by your desires, by all that kind of thing. But if you are in A state of less deprivation, and that could be financial deprivation, or spiritual deprivation, or psychological deprivation, or all of those things. If you are healthy, on a larger scale, I think you are less likely to be injured. There is less potential for damage.
Bitcoin allows us to rise to a higher version of ourselves, because we feel a level or certainty and are less afraid of the future. With the Bitcoin standard, these traits will change society.
Most of the bitcoin clients that I know, including myself, have seen a transformation since the adoption of bitcoin. Like most people around me, I worried about the future. Today, I feel optimistic about my future self because I know Bitcoin will reward me. I can now focus on doing what I love, which allows me to bring the most value to the outside world. Learning how to tap into the potential of bitcoin has allowed me to focus on what I think is really important. This has brought a new level of consistency into my life that keeps me grounded and energized.
Dr. Amos explained how Bitcoin has the power to change people in his podcast “The Bitcoin Standard” in conversation With Tariq Al-Diwani and Allen Farrington in a way that resonates with me as it reflects my personal Bitcoin journey:
The value of bitcoin allowed me to appreciate myself more. For years now, I haven’t been drinking or signing up and have instead put that money into bitcoin. With this refocus, my time preference completely changed. Instead of evaluating the things that bring satisfaction in the short term, I value the things that will make me happy in the long term. Instead of partying every weekend, I understand the value of using my time during the week. I don’t use the weekend to escape from my week, I use it now as an extension of my goals. As Dr. Amos says in the podcast, bitcoin customers have great insights into ruling dynasties and building wealth for generations.
Many people with compulsive mindsets don’t think this far. Interestingly, those with a fiat mindset do not understand Bitcoin. They have a very short time preference and only see daily price fluctuations and not long-term gains. The people at Fiat are running on a treadmill that doesn’t allow them to see past next weekend because there is no easy way for them to save the future. With bitcoin, there is. With Bitcoin, time preferences are lengthened and people can appreciate the future, allowing us to appreciate the present. Whether you agree or disagree with this, I have met quite a few bitcoiners who have gone through major mental changes after holding bitcoin for at least five years.
Bitcoin can be a tool for finding optimism, if we are willing to use it accordingly. This self-responsibility is at the core of Bitcoin’s philosophy. The first step is to accept that the current economic model we live in is not the best possible model. The next step is to actively use and research Bitcoin. This causes you to confront yourself as you begin to actively engage in the reality in which you live and begin to question your own actions. The start of Bitcoin’s journey could be challenging, due to Bitcoin’s volatility, which contrasts with the perceived safety of the current system and may be worrisome at first. However, over time (and the price of bitcoin increases), satisfaction and security begin. This can have a positive effect on mental health as there is less stress and anxiety, which can lead to a more optimistic view of the future.
With bitcoin, you have to learn to deal with uncertainty. Something that actually belongs to man, but the current system considers it bad. We are used to time preference. Everything has to happen quickly. A system like Bitcoin, which takes time to develop, is cause for concern. However, this is a lesson that teaches you how to be more patient, financially responsible, self-reported and independent – virtues that we don’t necessarily learn through our current financial system.
Currency crises and political turmoil will sooner or later force everyone to get involved with Bitcoin, as it offers a better alternative. I hope this article inspires you to get involved with bitcoin before you have to.
This is a guest post by Leon Wancom. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc. Or Bitcoin Magazine.