The rich and the poor live in completely different realities, comprised of different cultures and rules. For instance, borders and nationality act only as fetters on mobility to those who are financially challenged. The wealthy go wherever they want whenever they want. Just look to golden visa programs. Those with sufficient capital are able to gain citizenship by investment. Wealth allows for personal sovereignty and escape from the control of nations. Distributed systems will open new avenues for private wealth creation outside the jurisdiction of countries.
The world is changing faster than ever, and technology is paving the way. The internet democratized access to information, but both the distribution and creation of value are controlled by the elite through central banks. In 2008, we saw the result of this control. The corruption and irresponsibility of banking institutions and regulators lead to a subprime mortgage crisis that brought the world’s economy to its knees.
Most of those responsible for the crisis never saw the inside of a jail cell and as usual, the people paid the price. Regular people lost everything, while the banks responsible were bailed out. And now, in 2022, the bankers have again, through their corruption and greed, lead us into another crisis — this time inflationary. Bailouts won’t work.
When the people tried to stand up to these corrupt institutions with movements like Occupy Wall St., they were slowly muted from public discourse by mainstream media diversion into identity politics and other distractions. Culture wars to prevent class wars.
Lucky for us, at the same time another revolution was brewing. In 2009 Bitcoin, a decentralized Proof of Work (PoW) protocol, was born. The creator Satoshi Nakamoto remains anonymous to this day. Within the genesis block there was a hidden message:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
Satoshi is anyone. Satoshi is no-one. Satoshi the enigma, a perfectly poetic start to an inevitable revolution — one that will change the very organization of society. The people, for the first time, had access to tools that can emancipate them from monetary policies created by the rich to further themselves, their power and control.
Bitcoin is a technology with a clear fixed monetary policy, free from the whims and wishes of central banks. It is an open protocol, free to be used by anyone, which allows for the transfer of value through the web seamlessly without the need of centralized intermediaries. Miners are the owners of the network. They provide security to the network by solving complex puzzles, performing computational work to validate new blocks to update the ledger with new transactions. The video below gives a nuanced look at how bitcoin actually works.
With the advent of decentralized banking, a target has been placed on the backs of centralized banks. Ever since the introduction of Bitcoin, there has been an explosion in blockchain innovation. For instance, the Ethereum network introduced smart contracts, which are programs, stored on the blockchain, that run when predetermined conditions are met.
The Ethereum network is currently also PoW, but plans to transition to a newer security model known as Proof of Stake (PoS). In PoS you lock up funds in validators and earn staking rewards for validating new blocks. In general terms, PoW based protocols give decision-making power to those who perform computational tasks, while PoS based protocols give decision-making power to those who hold stake in the system. The PoS model has its advantages such as lowered energy usage, but, used alone, is less durable than PoW and has risks of centralization. This system can lead to a plutocracy controlled by early holders and those with capital. The resultant system looks similar to the one we have now, where the rich get richer and have control over the network.
Bitcoin started this revolution, but faces issues such as scaling, privacy and the lack of smart contracts. There are also concerns of miner centralization, and the problem of permanent loss of coins, through lost wallets and bitcoin left over in wallets lower than the cost of a transaction (known as dust). These shortcomings hinder the use of Bitcoin as a currency; notwithstanding it still excels as a store of value that exists outside the control of governments and the elite.
There are thousands of cryptocurrencies now, each fitting a niche trying to solve their own problems. Most of them are either implicit or explicit scams, which is to be expected in an ecosystem outside of regulation. It is a small price to pay for freedom.
But not all new projects are hopeless. The Ergo protocol is an up-and-coming project, which stays true to the initial vision of Bitcoin, while improving on the protocol’s major shortcomings. Ergo strives to make ergonomic money with tools that make it private, resilient, censorship-resistant, secure, open and free. One of the most important innovations by Ergo are having smart contracts built on Sigma protocols, a type of zero knowledge proof. One benefit is the use of ring-signatures to obfuscate which wallet funds come from, enabling robust self-sovereign application-level privacy. The importance of privacy and anonymity cannot be understated.
Privacy protects the individual from society
For there to be free societies, the inhabitants must be free from government surveillance and control. To be sovereign means to be both independent and autonomous. Privacy is a prerequisite for both. Mainstream technology continues to trend towards being more intrusive into our personal lives. Our leaders tout that there is nothing to fear if there is nothing to hide. Amongst our leaders there is fear of privacy, because of a lack of trust and hunger for control. We are quick to point out the dystopian vibes of a social credit in a Chinese surveillance state, but let the label of democracy fool us into thing we aren’t going towards something similar.
There is a clear danger to centralized financial institutions. Just look to Canada, known to be a generally free country. During the trucker convoy protest of 2022, the federal government under Justin Trudeau enacted the Emergencies Act. Law enforcement was able to work closely with Canadian financial institutions to freeze the bank accounts of those taking part in the protests. Without financial privacy, the protestors suffered from systematic suppression by a government using authoritarian means of control.
Anonymity allows for revolutions that needn’t cower to coercion. Satoshi got the ball rolling, but privacy must be preserved to empower all the Satoshi’s to come.
Nations are consumed by corruption. Corruption breeds instability. Instability leads to collapse. And through collapse, we will build and we will rise.
Ergo is the natural successor of Bitcoin. It is a platform for contractual money created to level the playing field for regular people. The community is the heart of any organization and from taking part I know Ergo has a strong heart. Born in crypto winter, the community continues to build towards an ideal. Ergo is a distributed system with solid foundations that will not only endure, but consume the world whole.
Well written!