For centuries it has been privileged knowledge that whoever controls the people’s means of exchange, controls the people. Luckily, that power dynamic is being challenged by an open-source math equation known as Bitcoin. For the first time in the modern history, the power over centrally issued money and physical control over money is being shifted from the ruling class to the people.
What Is A Means Of Exchange?
First and foremost, in order to understand how control over a means of exchange functions, you must first understand what money is and why it represents so much more than pieces of paper in your wallet or a number in your bank account. Money is a tool and it happens to be one of society’s most remarkable yet poorly understood inventions.
Money is how humans store, exchange, and account for the value of our labor. It is the basis of every prosperous and organized society. Without money, we would not be able to advance beyond what we could produce in a single day. We would not be able to enjoy the goods/services produced by others. We would not be able to assign different amounts of value to different things. Life without money would be much less comfortable and probably much less fulfilling.
There’s an old saying “time is money”. It’s a great saying but perhaps a better way of saying that is “money is time” because money is merely a representation of the time that we spend to produce goods and services that enrich the lives of human beings.
In short, money represents our time spent working. Each unit of money that we earn literally represents a tiny fraction of our lives that we spend to earn it.
It takes time for a farmer to grow food.
It takes time for machinists and engineers to build a farmer’s tractor.
It takes time for a refinery worker to produce the steel for machinists.
It takes time for miners to extract ore from the ground in order to refine the steel.
It takes time to produce every single thing that humans need and want.
Without a system to store, exchange, and account for the time that we spend working, we simply could not organize solutions to life’s most complex problems.
Since money = our time, it’s incredibly important that we are the ones in control of our money but that’s not how the current financial system works.
Who Controls Your Money?
Due to the nature of modern banking, your personal bank is in control of your physical deposits and the central bank that creates your money is in control of the amount that you can ever possibly own in relation to the total supply.
There are 2 primary ways that banks control you via your money.
– Your money is physically under the custody of your bank.
– Your money’s purchasing power is under the control of the central bank that prints it.
Let’s look at each of these in more detail.
Your Bank Controls Your Physical Money
When you open an account with your bank and deposit money, the bank assignes you an account number and offers you a shiny debit card so you can conveniently spend your money at all sorts of brick and mortar stores as well as online retailers. You can even withdraw money at thousands of ATMs across your country (possibly the world). They will almost certainly offer you a shiny new credit card in case you need it for Christmas shopping or for “emergencies”. They will probably even give you a lollipop for your kids and maybe even a treat for your dog. You’ll leave the bank feeling great with your new bank account that earns interest and your new credit card in case you need it for emergency spending.
They keep your money nice and safe in the bank and you can go and spend it wherever you like all over the world, right? …right?
Well, no. Modern banking doesn’t quite work like that.
When you open a bank account and deposit money, you think that your account is yours but the reality is that everything I just mentioned belongs to the bank and they give you permission to use it.
It’s not your bank account. It’s the bank’s account and they let you use it …for a fee.
It’s not your debit card or credit card. It’s the bank’s and they let you use it …for a fee.
Technically, it’s not even your money once you deposit it. It legally belongs to the bank and they simply owe you based on your deposit. They become the legal guardian of your money and lend it out to earn interest and share some of that interest with you.
Remember that new credit card that they offered you? Well, it comes with some absurd interest rate like 10-20% APR so for every dollar that you accrue on your card, they will charge you more to pay it back in a year …or 5 years. What essentially happens is that the bank lends out your money to people just like you and then charges you like 20-30x the amount of interest that they pay you.
Not only that, if you ever decide that you’re no longer satisfied with their services, they can prevent you from withdrawing your own money at their discretion. They can even seize it if law enforcement so much as suspects that you are doing something illegal with your money. They don’t even need any proof of wrongdoing.
It’s not just banks that do this. The same is true for any sort of electronic payment service such as PayPal, Venmo, Western Union, etc. They all have control of your money when you use their services and they give you permission to use your money within their system.
If you want to actually own and have control of your own money, you’ll need to withdraw all of your money from your bank and not use any of their services. It’s easy to say “don’t use the banking system” but in today’s modern and hyper-connected world, it’s next to impossible to function without a bank account or some sort of modern banking services.
The only way to avoid your money being under the control of a bank or financial third party is to withdraw all of your money, close your account, and cut yourself off from modern finance and all of the benefits that come with it.
Even if you are able to withdraw from the banking system and live a comfortable life on just cash, the central bank can still rob you of the value of your actual money by increasing the total money supply.
Your Central Bank Controls The Supply Of Your Money
It’s relatively easy to understand how money is under the control of a bank when they have physical custody of it but it requires a greater understanding of money to truly realize how the value of your money is controlled by the central bank that prints it.
The simplest way to explain the value of your money is that each and every time that the total supply of money increases, the amount that you own becomes a smaller portion of the total.
The more money that they print, the less you own of the total. Over time, your money is able to purchase fewer and fewer goods and services as the money supply continues to increase. This process is called inflation and it typically means “an inflation in the supply of money”. With no end in sight for modern money printing, that means that there is no end in sight of the devaluation of your money.
If the government increases the money supply by 1%, then your money will end up purchasing 1% less than before the money was printed. If they increase the money supply by 10%, your money will end up buying 10% less than before they printed the money and so on. The end result is the value of your time spent working is severely diluted which makes it more difficult for you to pay your bills, live your life, and plan for the future. In order to offset this time dilution, you have to take on additional work or some sort of increased risk (via investing) to “beat inflation” and maintain the same standard of living. Meanwhile, the ruling class is rewarded for taking on too much debt/risk and get bailed out by the government time and time again.
To put it simply, the rich get richer and everyone else gets a little bit poorer. This is particularly troublesome for the poorest people on the planet since they might be barely getting by as it is.
Don’t worry though. Bitcoin fixes this.
Take Back Control Of Your Own Money
So, where does Bitcoin fit into all of this? Well, as the title of this article suggests, whoever controls the people’s means of exchange, controls the people. Bitcoin is the solution to both the problem of your money being under the physical control of your local bank as well as the central bank being in control of the total supply of your money.
Even if you withdraw all of your money and are able to live well using just cash, the total amount of money that you own can still be reduced in relation to the total supply through endless money printing. If you want to take physical control of your money as well as protect your money from becoming a smaller and smaller portion of the total supply, you need money that you physically control and that is immune from runaway inflation.
Bitcoin is the only money in the world that is capable of offering you solutions to both problems.
Exit Your Fiat Currency
Once you’ve come to the conclusion that your money is being devalued by endless money printing and you need need an alternative to store your net worth, it’s time to use bitcoin. The first step is to buy your first fraction of a bitcoin from a bitcoin exchange.
Since the total amount of bitcoin that will ever be produced is hard-capped at 21 million, there is nothing that anyone can do to dilute the amount of bitcoin that you can own in relation to the total supply.
1 bitcoin will always equal 1/21,000,000 of the total supply. If you own 1 bitcoin, then you own 1 of 21 million (1/21,000,000) bitcoin that will ever exist. Period.
This is a truly amazing concept that has never been possible in the digital age. Once you begin to exit your fiat currency by storing your net worth in bitcoin, you no longer have to worry about the value of your labor being devalued by endless inflation.
Exiting your fiat currency is an important first step but you also need to take physical control of your bitcoin by withdrawing it to your own wallet.
Exit The Banking System
Once you have purchased your first fraction of a Bitcoin from an exchange or “Bitcoin bank”, you still need to withdraw it to your own bitcoin wallet so that you physically control it. After all, whoever has control over your means of exchange, has control over you.
When you’re first starting out, either a mobile wallet or desktop wallet offers enough security and convenience for learning how to send and receive bitcoin. After your bitcoin holdings are large enough for you to consider more security, a hardware wallet is the best option for long term storage.
Taking the leap from your fiat bank to a bitcoin standard to controlling your own bitcoin is an incredible journey.
Use Bitcoin
For centuries those who rule have had some sort of control over the people’s means of exchange. For the first time in modern history, the people have the means to not only exit the banking system but also to exit centrally issued money itself. When you truly use bitcoin, you are the one in physical control of your own money and nobody in the world has the ability to dilute the amount of bitcoin that you own in relation to the total.
Bitcoin is not some get rich quick scheme. It is a paradigm shift from a centrally controlled model to one that puts us in control of our own money and financial future.
If you want to regain physical control of your own money while also making your savings immune from the perils of endless money printing, you simply must use bitcoin.