Bitcoin can already address the twin problems of currency depreciation and spiraling debt, but to see it you need to step outside of the current financial paradigm, according to Jeff Booth, General Partner at Ego Death Capital.
“You have a monetary system that is 10,000 times bigger than Bitcoin today, and that relies on theft,” Booth said. “This is going to be hard to digest… because you’re measuring a system problem from the system creating the problem, and all the politics on top, no matter what side, is just theater on top of a system problem.”
Booth spoke with Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News at Bitcoin Miami earlier this month. He said our debt-based financial system cannot function without continuous currency depreciation, which makes ordinary people poorer even as real productivity skyrockets.
“Globally, there’s about 400 trillion dollars of debt,” he said. “If you try to pay back one trillion dollars at one dollar a second, it would take you approximately 32,000 years. So the debt is already insolvent, but we pretend it’s solvent because we allow governments to manipulate money to pay back the debt with cheaper dollars tomorrow, and that manipulation of money carries a huge problem throughout society, because it’s just manipulation.”
Bitcoin mirrors rise of e-commerce
Booth said today’s Bitcoin vs. fiat analysis mirrors the online vs. physical store analysis from the 1990s and 2000s, seeing opportunities as threats and failing to account for the speed of technological change.
“If you were an executive at Amazon from 1995 to 2010 versus an executive at Sears, you saw two different worlds,” he said. “You saw one getting easier and easier and easier, Amazon was providing more value to people and people were using it, it was getting stronger and stronger and stronger, and Sears was getting weaker and weaker and weaker, and your view of the world would be determined by what system you were looking through. Same world, it was just about the measure you were using to measure the world.”
He said this is exactly what’s happening in the financial system right now. “There is an open monetary network that any person on the planet can move over to, and essentially measure differently, and not have to pay for $400 trillion of debt that’s already insolvent, and not having their wages decline in real terms every year,” he said. “More and more people are moving over to it, and once they measure the world from that new system, they see truth, hope, abundance.”
AI will only magnify fiat manipulation
Booth said the reason most people can’t see the proven advantages of the Bitcoin system is because they are measuring Bitcoin’s price from within the manipulated currency system, instead of using Bitcoin’s price stability to measure the devaluation of the fiat system. “They’re saying bitcoin price is going up,” he said. “It’s the opposite.”
He added that the economic and financial distortions caused by rising productivity being stolen by increased inflation will be magnified and accelerated with the advent of AI, automation and machine learning. “If you wait a year or two or three, artificial intelligence is going to merge with machines and it’s going to bring productivity gains that we can’t even imagine right now,” he said. “And it’s going to mean that the prices will fall faster and faster and faster.”
CBDCs are about reasserting control
Booth said that governments know they must maintain absolute control of the money in order to absorb all the real gains while staying ahead of the ballooning debt, and central bank digital currencies [CBDC] are their response to the decentralized, stable and honest pricing instrument that is Bitcoin.
He believes that despite resistance from people, banks and politicians, central banks could successfully implement CBDCs by giving the digital currency to the public. “Will people fall for it? Yes,” he said.”Because you’ll give people programmable money and you’ll say, ‘here’s a hundred dollars out of UBI,’ and you’ll lock them into that system. And a lot of people will think that they’re safe when they’ve just given away every individual right and freedom.”
Booth believes, however, that CBDCs will ultimately fail for the same reason fiat itself must fail: countries will manipulate their own CBDC, but will never trust one another’s. “If you imagine every country with a CBDC, how could they trade together? How could there be global trade? Because then you’d have to manipulate every currency transition, the market rates between currencies,” he said “And this is all in parallel while Bitcoin is getting stronger and stronger and stronger. So they will fail.”
He said that once people understand that Bitcoin is actually pricing the baked-in risks of currency collapse and the debt spiral, rather than fiat pricing Bitcoin’s supposed volatility, they’ll recognize where the real value lies. “They see Bitcoin as a risk,” Booth said. “It’s the safest thing you could do right now.”