Why Bitcoin will increase Trust

As many others, I am always keeping an ear out for a valid counter-argument to Bitcoin. Most recently, I found an interesting argument against Bitcoin proposed by Yuval Noah Harari.

The argument, paraphrased:

Bitcoin assumes distrust between parties. Existing institutions such as (central) banks, require trust from the participants. Humanity should find ways of trusting each other, instead of adopting technology that removes the need for that trust.

I both agree and disagree with Yuval here. I’m absolutely a proponent of trust between humans, but I disagree that the trust should be through institutions.

One of the primary ways we as humans have learned to succeed as a species - and indeed thrive to the point of being masters of our natural environment - is our ability and reliability in predicting what will happen next.

We do not simply trust that our crops will grow next summer, we ensure it. We have understood that there is a yearly cycle of seasons and we have learned to reliably predict and anticipate it, allowing us to plan for it. Trust didn’t fill up our grain stores and get us through famines.

We do not simply trust that if a healer puts some eels on our body it will drive out the bad spirits from our blood and heal us - we ensure that our medicine works and is reliable through the implementation of the scientific method and rigorous testing. Trust didn’t bring down child mortality to near-zero in the modern world.

We do not simply trust that if we put enough fuel in a metal cylinder and light it on fire, it will take us to the moon - we meticulously calculated every thinkable variable to ensure that the rocket will take us there. Trust didn’t get us to the moon.

Humans have sought to eliminate every single point of failure in prediction that stands between ourselves and our ability to know exactly what will happen next. Adaptability has for the most part taken the crown as what has allowed us to survive - but our ability of prediction must be what should be recognized for it’s role in ensuring our prosperity.

So I will refuse the first point: It is not as Yuval suggests our ability to trust each other that has allowed us to control the natural world. It is our ability to successfully predict and eliminate unknown factors, gaining certainty and giving us the ability to anticipate what our next move should be. Cooperation, mainly has been ensured through incentive structures. “If you help me sow grain, you will have a share of it”. Financial devices, like currencies, bonds and shares is merely an exercise in the attempt to implement this incentive structure and make it universally adaptable.

What Yuval is unfortunately missing is that the trust of the institutions which we should be able to reliably predict - have been repeatedly abused and subverted, and often fatally to the detriment of the working class. Their time is over.

What should be trustable and predictable, is now instead an instrument of speculation that reliably moves wealth from the working class to the ruling class. As a matter of fact, we have all learned to trust this natural state of things where everyone but the elite is being robbed. The institutions are no longer serving the common good of the people.

For many people, this trust in the fact that institutions will reliably subvert their needs, has resulted in the dissolution of society and the division of people everywhere. We are being misled by opaque promises of better times, a reliable inflation rate of 2%, wage growth that follows the inflation, and that our living standards will follow our increase in productivity. Instead of fulfilling these promises, we have been divided along lines of nonsensical dilemmas, blaming our brothers and neighbors for wrongthink, and forcing us to constantly choose a lesser of two evils.

Bitcoin subverts distrust between people - because Bitcoin is a predictable, reliable money that acts more like a law of nature than a human institution. Human institutions can be corrupted, co-opted for personal motives, and subverted by individual greed. Bitcoin lacks the feature for any of these things.

As for the seasons of the year, Bitcoin introduces a predictable economical cycle of halvings until the year 2140 - by which point we will hopefully have found a different, greater cycle to adapt to.

Yuval is wrong. Bitcoin does not create more distrust. Bitcoin eliminates it.