Bitcoin May Help Mend Fiat Exchanges – Bitcoin Magazine

Bitcoin May Help Mend Fiat Exchanges - Bitcoin Magazine

This editorial is the personal opinion of Jimmy Song, who has worked in the Bitcoin ecosystem as a developer, lecturer, entrepreneur, and programmer for over twenty years.

There is an unwelcome visitor in our personal lives, and its name is the government.

Relationships between individuals make up the fabric of a society. Both sides of an advantage, and the connections between them, ought to be equal, but in the current fiat economy, neither is the case. There is typically one person in charge of the direction of a relationship. And that’s not necessarily a terrible thing. A neutral party who can mediate disputes and establish fair terms or agreed-upon norms is desirable. When there is no tension present, centralization becomes problematic when it limits people’s ability to form relationships as they see fit.

I don’t think I need to stress the significance of having positive relationships in your life. That’s obvious, and everybody knows it. As the hit Netflix show “Alone” shows, even the most self-reliant individuals require the support of others to thrive. As a general rule, it’s not fun to go without interacting with other people. Even if you consider yourself an introvert, you likely still care about a select group of people. For the most part, it is the people you meet and the bonds you form with them that make life exciting and worthwhile. Civilization is a web of interconnected relationships.

Regrettably, our connections with one another—the nodes in the social web—have been degraded. Authorities’ involvement into bilateral relationships has resulted in the development of bureaucracy and the introduction of credible third parties. While I’ve focused on marriage in this piece, the principles at play here are applicable to a wide variety of partnerships. Having fiat currency around has drastically lowered the standard of living for everyone.

It’s something we all know deep inside. The depth of relationships and the value placed on time are both strikingly low. Is there a reason why people put so much stock on first impressions these days? This inability to form meaningful relationships with other people begs the question: why? Is real life becoming more like Facebook, where we learn a lot about people on the surface but learn very little about who they really are? Do the majority of individuals even want serious relationships? The purpose of this essay is to go into the reasons why partnerships seem so off.

Strong preferences in terms of both time and other variables

Fiat currency, by its very nature, encourages actions with a high time preference. When the currency we use is constantly being devalued, there’s no point in trying to save or plan for the future. Since the government guarantees us various sorts of long-term safety nets, we might as well enjoy ourselves in the here and now. The incentives are shifted from long-term planning to indulgence with fiat currency.

Because of this, people rarely invest in their relationships for the long haul. Relationships of all kinds, whether professional or personal or even familial, are entered into with a very limited view of the long term. People in a fiat economy count on the support of their connections in the here and now. If this is the case, then it is not surprising that birth rates are falling all around the world. The investment in a parent-child connection is one that pays off for a very long time. Twenty to thirty years is a very long time to wait, especially in a fiat economy.

Sad to say, but exploitative behavior is encouraged by a short-term mindset. So long as you’re not in it for the long haul, it’s probably best to just cut all ties.

Furthermore, connections are superficial because of their transient nature. Character, loyalty, and dependability are less important to people than having a good time, gaining access, and making life easier for themselves. Relationships with a high time-preference are more prone to instability and demand more upkeep. Your connection to one another will only survive as long as your most recent exchange, so make sure it was something positive and enjoyable. If you tell the truth, even if it hurts, you may end a friendship or a romantic relationship.

People with a high preference for the passage of time are notoriously undisciplined in a fiat currency economy. As a result, individuals will likely make hasty decisions based on their immediate feelings rather than their ability to foresee the consequences of their actions. It’s common for people to burn bridges when they haven’t invested much in the relationship to begin with. Particularly true of those who don’t require anything from you. One of the most detrimental aspects of modern society is the prevalence of rent-seekers.

With Fiat, Reputation Isn’t As Important.

There was a time when one’s reputation was crucial to one’s financial success. In the past, if you wanted to be respected in your community, you needed to prove yourself as a skilled baker, cobbler, or lawyer. A terrible name could spell disaster for a person, Fiat currency shifted that.

In a fiat currency system, there are many opportunities for rent-seeking that require little in the way of credibility. Rent-seekers are immune to supply-and-demand pressures and instead need only appease the money printer. Relationship maintenance is limited to that with the salary provider. Naturally, the wage payer typically has standards and expectations, but ensuring them are met requires oversight. The wage provider steps into the role of neutral third party in the two-way exchange. Tenants who are only concerned with saving money on rent will take the bare minimum of care to comply. The presence and judgment of an outsider devalues the partnership.

Let us compare this to a normal market exchange. In general, customers that actively seek you out are more likely to keep tabs on themselves and put effort into the relationship. As their primary goal is making money rather than pleasing a superior, they can afford to take a more patient approach.

With the advent of Fiat jobs, it is becoming increasingly rare to cultivate meaningful, long-term connections with consumers. Relationships are not the only thing that fiat has contaminated and debased.

Third Party Implied

The most glaring example of fiat infection is in the relationship between an employer and an employee. The two parties are subject to government oversight via employment legislation. Compensation is subject to taxation, and both parties are obligated to provide certain benefits and meet other legal standards. The government’s presence as an outsider in the relationship is a major source of tension.

It’s not just a financial hit to the relationship; there’s also an emotional and psychological cost. The government defines how the relationship between employers and employees must be, rather than the two parties coming up with a solution that works for them. As a result, there are common practices for dealing with employees and employers. Since these features are standard worldwide, there is no incentive for either innovation or competition.

That is why working for a company can feel so distant and uncaring. Since fiat corporations are effectively government proxies, they develop a rent-seeking mentality and lose sight of the big picture. How committed are modern workers to their employers? It’s become the norm for employees to quit and then return to a company in order to advance their careers. Because of the financial and time costs to the company and the employee that could be avoided with an amicable working relationship, all parties involved are acting in high time-preference.

The government regulates even the relationships between businesses and their customers. The laws were allegedly enacted to safeguard one of the parties, but they had the unintended consequence of stifling creativity and innovation. Some sectors of the economy, like the airline industry, have stagnated because of excessive government oversight; this is the case for the vast majority of the economy today.

Everything is dominated by politics.

Fiat currency has ramifications beyond the monetary ties we typically think of, such as the employer-employee dynamic or the producer-consumer nexus. In a fiat-money system, politics seeps into every aspect of life, including private interactions.

People compete for the privilege of printing money because it is seen as so valuable. Since rent-seeking is less of a challenge than meeting market demands, political intervention is of paramount importance. In politics, as in all other areas of life, there is always someone who has to win so that you can win. Consequently, advocating for your group’s needs will inevitably pit those needs against those of another.

There is now a moral undertone to the political debates. Every dispute over money boils down to a question of ethics. As the moral case for financial compensation strengthens, the motivation to claim victimhood grows substantially. More victims equals more of a justifiable need for freshly created currency.

Nowadays, all relationships have a whiff of victimization and are ultimately based on money. The debt owed for being a victim is settled with real money. Therefore, a third party is implicit in your contact with members of a different political group when using fiat currency.

When you’re surrounded by people who share your political views, it can feel like you’re in an echo chamber where speaking up could get you shunned. Because you’re a drain on their finances. As a result of fiat currency, our connections with one another have been dumbed down to the level of facilitating political goals. Because they are shallow, they perceive themselves to be shallow.

Rank-Based Games

Relationships take on a highly political and rent-seeking character, elevating the importance of one’s social standing. Making money in a fiat economy requires advancing in social standing. If you want to succeed in a fiat economy, you need to have the correct opinions, the right political abilities, and the ability to make a good first impression with the money printer, as opposed to the market economy, where innovation, creativity, and practical goods and services are what make you money.

The bonds between us demonstrate this truth. Many people are vying for your approval within your social circle in the hope of advancing their social standing. There is just as much backstabbing, gossiping, and superficiality in organizations as there is in middle school. What’s worse is that ties are cut as soon as they are no longer useful politically. Therefore, their lifespan is typically short.

In market economies, on the other hand, the importance of goods and services is greatly emphasized. In the end, it is the quality of the goods and services offered that stands out, not the seller’s or buyer’s political clout. Additionally, market deals are typically made for significantly longer periods of time. There are genuine switching costs, and over time, consumers typically desire higher quality. Temporary partnerships don’t cut it in a market economy. Cutting ties with a person or organization will almost always result in financial loss.


Unfortunately, this kind of political maneuvering is all too prevalent among groups of friends, and it often results in a marked increase in the value placed on individual time. Because of the political nature of a group of friends, members come and go at a much higher rate than with a random group of strangers. Because, really, nobody wants to start out at the bottom of a social ladder if there’s another option.

One of the most disheartening trends I’ve noticed over the years is the rise of multi-level marketing (MLM) scams on Facebook, in which users sell products to their friends in exchange for a commission. In today’s society, people are willing to use their connections as a means to an end—making money. Most individuals are too polite to call out such behavior since it debases the relationship by bringing money into the discussion. Many relationships are damaged or destroyed as a direct result of this rent-seeking behavior.

Relationships of Power and Obligation

Democracy’s peculiarity lies in the fact that, ostensibly, the government can’t rule without the approval of its citizens. The consent of the governed is a positive thing. The introduction of fiat currency, however, always leads to corrupt administration.

We are now continuously inundated with propaganda telling us that everything is fine, or at least that the authorities are doing a decent job, although this is not the case. Government officials are incentivized to win our support by the promise of a windfall of freshly created currency. Even if it means alienating half of the population in order to win our votes, they will resort to dishonest means. The truth is unpleasant, thus there is an incentive to conceal it. This is not a solid basis for a committed partnership. This is reflected in the widespread cynicism, skepticism, and even animosity towards the political system.

Problem Solved, Thanks to Bitcoin

The remarkable aspect of my Bitcoin experience has been the caliber of the friendships I’ve built along the way. I’ve made some wonderful and fascinating pals in this community.

Bitcoin’s incentives are considerably different from those of traditional currency. Those with a strong emphasis on time will tend to emerge, in my experience. Many people have indeed ruined relationships by publicly rejecting Bitcoin Optimists and their uncompromising views. In my opinion, these individuals are still susceptible to the effects of the fiat currency system. However, there are still quite a few people who have stayed, and they are not likely to go anytime soon. This is because there is greater loyalty and character in the remaining members of the group.

Bitcoin is unique and alters the incentives in interactions. Since we have funds, we can focus more on the future and make deliberate plans for it. Weeding out the poor relationships is equally as crucial as retaining the good ones. Many altcoin users prey on Bitcoin users’ natural affinities, thus Bitcoin users know this only too well. Persistent connections tend to pick themselves. It is a lovely model for how interpersonal connections should work.

Restore depth to our connections.

Orizu Augustine
Orizu Augustine is an experienced crypto writer working for Alltechcraft. Having passion for writing, he covers news articles from blockchain to cryptocurrency and iPhone and Samsung related articles.