I often write with a research based theme. Today that is not the case. This article is opinion only. An opinion which is likely to annoy a lot of people in the cryptospace...Grab a coffee, I am off on a rant today!
DOWN WITH THE BANKS!! DOWN WITH GOVERNMENTS!!
LET THE PEOPLE BE FREE AND OWN THEIR OWN MONEY!!
It's an oft spoken or implied sentiment in the world of cryptocurrency and particularly that of Bitcoin. People are slaves to the system. Government and taxation is nothing but theft. The political elite have condemned society to a life of servitude. We are but worker ants in a hive where the queen actually doesn't really give a shit. Owning our own money will free everyone!
How much of this is truth? How much of this is hyperbole?
Government is never perfect. In fact it is often far from perfect. That is true whether you are talking about democratic systems, sovereign states or totalitarian regimes across the world. There is not a single country on the planet that represents some idyllic utopia where everyone is rich, healthy, happy and lives till one hundred and eleventy-seven, dying only in their sleep from natural causes. Some governments are worse than others, however without getting into the likes of rogue nations who impose abject misery on the majority of their population, it would be a fair statement to say that a large percentage of the people on this planet do depend on government and the day to day infrastructure of modern day financial systems. So what would happen if it came to all....stop?
I was a big fan of the Die Hard movies. The fourth installment in the franchise saw our hero, John Maclaine played by Bruce Willis as an analogue cop in a digital world. The villain orchestrates an insane plan to literally "reset" America. Killing off power stations, utilities, traffic systems and finally aiming to destroy a central server that holds the master backup of all American debt and credit. Resetting everyone "back to zero". What ensues is chaos, a great movie and carries a philosophical undertone that quietly whispers "what if?". Now, I am under no illusions that the theory of an aggressive terrorist destroying money, credit and debt as we know is utterly preposterous. But the reality is, if governing and financial institutions ceased to exist tomorrow, the results would be nothing short of catastrophic.
Does anyone need a history lesson of what happened after the fallout of the cold war? Black market arms dealers purchasing masses of stockpiled weapons by the kilo at a fraction of the cost with no oversight directly out of Russian military bases? Russian helicopters sold to Latin American drug cartels at 1/20th the price of what it would cost to buy them in America? All because there was simply no one and no structure to stop the corruption that flowed freely. It was quite literally a black market free for all. Who was in charge at the time in Russia? Quite simply...no one!
I should digress a little. Let's step back a moment and take a real world current example of being sold an ideological dream.
Two years ago, the United Kingdom voted to leave the European Union after two opposing campaigns which both sold the public on a set of lies. It was either "peace and prosperity under the banner of the EU" or "taking back control" under sovereign British rule. Both campaigns used fear attempting to deride opponents, much like crypto purists do today. They iterated everything that was wrong with "the other side". Crucially, The two choices both had the same fatal mistake in their campaign - Not laying out the reality of what a cast vote for them might actually deliver in the real world.
the now infamous Brexit bus which toured the UK. The statement on the side of the bus was proven to be a lie within hours of the vote count coming in and immediately recanted by those leading the "leave" side of the British referendum.
Today, the United Kingdom is in a terrible position financially and politically with the pound having dived in value, the country completely divided along political lines and its international trade relationships teetering on the edge. Multiple large corporations are on the verge of exiting the country at a cost of potentially hundreds of thousands of jobs and billions of pounds in cost to its economy. This is no longer "project fear". It is a distinct and absolute looming reality. Airbus will not shoulder the tax cost of £1billion per week to their company by being outside the EU so they are planning to move their HQ out of the UK in the event of a no-deal Brexit. Sony has moved its European legal base out of the UK to Amsterdam. Land Rover are halting production for a week specifically due to Brexit. The New Look retail chain may well go bust as a result of its heavy borrowing or have to sell the chain to satisfy its shareholders. AIG are planning to relocate their European base from the UK to Luxembourg. Dyson is moving from the UK to Singapore. The list goes on and on.
The point I am making with all this doom and gloom is just as libertarian anarchists in crypto promise a freer, fairer and more equal world through the implementation of mass adoption and destruction of "the banks/the man", they are identical to the political elite in their short sightedness.
Just like the politicians who sold an ideology for/against Brexit, evangelists present no plan or even an an inkling what this new age might look like or how it might function in a political vacuum without government in ANY country.
If proof of work is anything to go by, it has got us off to a terrible start. The few being enriched at the cost of the many being manipulated through the likes of old school bitcoiners like Barry Silbert and Ryan Selkis. Or the processed manipulation of the market in the 2017 parabolic spike through collusion of Bitfinex and Tether who have the same leadership team and artificially inflated the market through printing vast amounts of USDT... JL Van der-Velte, I see you for what you are! Not to mention the vast amount of damage done to our planet through the excessive energy use it takes to allow Betty in Las Vegas being able to pay for her skinny caramel latte from Starbucks at a transaction fee of 0.0028 btc. How about the general narrow focus of those that sling mud at Ripple because they seek to work in harmony with a system rather than obliterate it? No. This is not liberty. It is closer to right wing populism to take, take and take some more while putting the body in a frock with a big shouty flag that makes us think of some rose tinted notion of freedom that really doesn't exist.
Just Imagine. In the moment that governments shut down and stop being able to pay the millions they employ directly. Who is going to pick up the tab? Who picks up the rubbish on our streets? Who stamps the planning application for a new home? Who makes sure plutonium doesn't cross one border to another? Who ensures that some bored teenager doesn't go off on a raged tangent with a semi automatic rifle through the Trafalgar Square or in front of the Washington Monument just because they might have the burning desire to do so...and there are no national police to protect everyone around because there is no government to pay them?
Think this is limited to big cities? No. What about when regulators are not covered by government pay packets forcing fuel, communication and food prices through the roof? How does the farmer in a rural corner in Wales support his family when evangelism has removed his protections through fair trade regulation and government oversight? That of course assumes that these utilities even exist or operate if companies are not ransacked for personal gain. Human beings... we really aren't the nicest species.
Come to think of it, you don't even need to imagine. After 35 days of government shut down in America, Laguardia airport began redirecting flights as a direct result of workers calling in sick. Obviously they weren't sick...they just weren't being paid so they sought alternative income as any logical person would expect. Some TSA workers took to driving for Uber to support their families. The FBI stated in a 72 page report that the shut down represents a direct threat to national security. Since when do honest hardworking individuals have to rely on food-stamps to feed their kids? Are we really so naive to believe that crytocurrency is the solution to this in a society where infrastructure and commerce ALREADY exist? (If you truly believe that, please send me the number to your drug dealer as I would like a bit of whatever it is you are high on...)*what you smokin' bro?*
It might sound crazy and I will admit of course I am theorising perhaps extreme examples to illustrate the point. That said, its easy enough to simplify this into a more relatable context. Personally, I don't want to pay for my nougat bar or washing up liquid in crypto. Seriously. I genuinely couldn't care less. Particularly as in the event a transaction goes awry, I don't like the idea of manually hunting down my 0.00028 BTC on the blockchain that I attempted to transact with because a payment provider I am using couldn't get through the network traffic in time. Do you think Edna who is 73 years old wants to muck about with a ledger nano S or a QR code at the checkout or figure out the conversion rate from BTC to GBP while trying to buy a bag of oranges??! Please!
Decentralisation has its place, but it isn't in commerce from the perspective of the end customer...yet. At this point, centralised methods of commerce and control have their uses. I want to phone my bank and call the customer service person an idiot when they are rude but ultimately realise that there is a human being there to support and rectify the issue. Who would I speak to on an open source ledger? I am not exactly fluent in binary...
I want to be able to carry on using my credit card and not have to use QR codes. I don't want to have to have my entire life's savings on a cold storage device that could get chewed up by a dog or burned in a house fire and then have to recover my funds on the ledger using 8 of 20 keywords. I want efficiency. I want progress. I want change...but I don't want to have to change my own direction or convenience because of it. The BEST progress is almost invisible to the consumer but benefits them hugely (As David Schwartz has mentioned on several occasions "deep down in the plumbing"). I would also be willing to bet that 90% of those who live by using todays banking systems would probably say the same thing at the point realisation sets in that some things, whilst not always pretty, are necessary. Don't forget, cypto investors whether they sit on the right or left of the "holy" spectrum are all fringe investors. Those from the older generation in an aging world will be resistant to change of this sort of scale, and those from the newer generation...will they really care?
These are points that the cypherpunk movement and crypto anarchism choose to actively ignore. Whilst dressed as the basis of creating liberty, in reality they have the potential to cause established society to delve into carnage resulting in further isolation for those unbanked that so many scream about being the target of bringing INTO society. This isn't liberty. It's downright fucking selfish and ignorant!
These are also only a fraction of the issues that come with wanting to decentralise the entire world. Along with it being a dream and fringe thought, in reality it is also incredibly impractical. Forget the holy wars for a moment, just on the basis of logic it makes very little sense. I realise these arguments might make me sound both like a conformist and a selfish arsehole. I also realise that there are hundreds of millions of people that do not have the advantage I do and billions who are unbanked for whom blockchain can make significant life affirming change.
Let me be clear, in that SPECIFIC arena? I am ALL for disruption! Where the cost or logistics of banking are prohibitive, Or in states where governance doesn't exist/is so oppressive it stifles even those who are below the poverty line or in danger for their lives, the difference cryptocurrency and a state or institutionally disruptive approach can make in impoverished communities is enormous. For example the 2017 effort by Gavin Woods which sent aid to 10'000+ Syrian refugees in a Jordanian refugee camp through the Ethereum blockchain? Brilliant. Mohammed Noor and what he is doing to create a digital identity platform for those Rohingiya expelled from Myanmar at the behest of a genocidal Junta government? Excellent stuff! He has offered a path for up to 700'000 people to be able to prove who they are within Bangladesh, India and Saudi Arabia as a result of most of them being stateless, many of whom had their personal documents destroyed when villages were burned to the ground. In these instances the requirement to think outside usual channels (i.e. use case) is not only paramount, but the outcome has the potential to positively impact change all around.
But do we really need to bulldoze the house to the ground to fix a broken plug socket? Using the same analogy, would it not be wiser to simply revamp and extend the home so that more value is accessible in more space for more people to participate simultaneously? It would seem I am not alone in this thinking:
I'm not in favor of abolishing the state, I just want to make it light-client-friendly enough that we can achieve security guarantees about it from inside a browser extension.— Vitalik Non-giver of Ether (@VitalikButerin) December 31, 2018
In the aftermath of the 2008 financial crash and the collapse of Lehman Brothers, people were angry. Frankly, they had every right to be. Wealthy bankers had made incredibly risky decisions with money that did not belong to them. They then had the fucking audacity to go to the government powers that be and ask to be bailed out. Bailed out that is, using the money you and I pay in taxes to have schools, hospitals and general infrastructure in society built and maintained. Bastards. How dare they!
After Lehman Brothers collapsed, the famous sign above its doors went up for auction at Christie's auction house. The lot estimate was between £2'000 and £3'000. It sold for over £42'000.
The cause for the fallout has widely been pointed in the direction of deregulation of the banks that allowed them to use the sub-prime mortgage market as an underpin for hedge funds and other financial activities. When that collapsed, everything above it came tumbling down like a deck of cards. This isn't just the fault of the banks themselves, but you and I. We elected those who made the decisions that regulate our finances. If you give a toddler no rules and tell him to play with matches and paper, will you be surprised if he burns himself?
The problem with making the assumption that crypto and blockchain will solve the issues behind trust, governance and financial control is ultimately, even open source ledgers whether they are based in proof of work or consensus return to one thing: algorithms and maths. Both of which whilst based in structure are still written by human beings. Human beings have agendas and even those with the purest of intentions can (and often do...) make mistakes. Did you know Einstein made no less than seven major mistakes in the formulation of his "energy equals mass times the speed of light squared" theory? Those mistakes took him more than forty years to locate and perfect between 1905 and 1946 before he was finally able to give us that most beautifully simple and famous of equations: E=Mc2.
Hypothetically if Satoshi had stayed in the public eye, I wonder what would he/she/they might feel about the state of the bitcoin network as it currently stands today. Would they be proud? Did the state of the bitcoin network move in the direction they anticipated at inception? Or would they be horrified that a pure notion of decentralised and fair equality within a network had all but been captured by large entities through gaming the very system they designed?
Its happened before, don't forget. Robert Oppenheimer gave us the atomic bomb as a result of the Manhattan project during World War Two. Only after it was dropped on Hiroshima and Nagasaki did he realise the implications of what his scientific discovery meant for humanity and he lived with that torment for the rest of his life. Not only that, he became a symbol in the scientific community for folly. One who thought that he could control how his research and applications would be used.
The fact that genius can be so naive is somewhat of a cruel irony.
The Bitcoin whitepaper, whilst it recognises issues with the worlds financial systems does not lambaste the institutions that run them. Nor does it call for a worldwide revolution. It simply presents an alternative that may or may not work to what are seen as technical problems that could do with being improved on. The evangelism in the crypto space arose not from Bitcoin, Satoshi or the whitepaper itself, rather the cypherpunk and anarchist movement that adopted the open source nature and created a culture around it. Ten years from its inception, there are fundamental problems with the network architecture that Satoshi would likely not have been able to foresee. The main one being its power hungry nature and the severe damage it is doing to our planet. The electrical problem feeding proof of work is very real and with China's state-subsidised electricity fueled by its vast coal reserves, the damage it is causing is categorically undeniable. Even if you are a dinosaur petrol head like myself, it is impossible to deny the scale at which this network devours energy at a cost to our planets resources.
Whilst the Bitcoin network itself cannot be stopped, we know that it doesn't work in the context of global wealth distribution (or indeed as a functioning daily currency). Why? Quite simply, the entire network and its method of ordering transactions has resulted in over 80% of its value process capture being owned out of the borders of one country, with over 50% under mass influence of just one individual (Jihan Wu, the owner of Bitmain who also owns Antpool which controls 16% of BTC hashrate as well as his personal significant influence over two other major Chinese pools as well.) Again...why? Because it is financially rewarding to TAKE control in a proof of work system. Once you have done so, its virtually impossible for anyone else to stop you. Gain over 51%? Toast the network at will...or rape it, as we saw not more than a couple of weeks ago with Ethereum Classic.
This finite difference is where consensus has the potential to positively change the world WITHOUT the need or want to destroy it. Critically, it is USER centric rather than OPERATOR centric. It is also why it is incredibly difficult to get off the ground as a concept. Let's face it, with only altruism as an incentive to build and maintain a sequencing node on the XRP ledger, attracting individuals or entities to do so is far more difficult than the draw of running a mining rig and potentially getting fiscal reward to do so. I myself am guilty of repeatedly saying "I plan to run an XRP node soon!". Have I done anything to actually make that happen yet? Nope. (I still hope to get to it at some point when reality stops biting me in the arse and I am not on a airplane ten times a year but thats for another article...)
All this negativity around culture has finally bought us to the alternative which the XRP community know and understand very well. It is somewhat paradoxical that a token which has garnered a strong support network with an immense knowledge base around it and a large developer following is perceived as the underdog/"evil" token in the cryptospace. Particularly when it is actually the most apt application for mainstream adoption proven by the real world companies already using it. It has the most balanced approach to market integration with speed, insignificant cost and tech that is light years ahead of proof of work which anyone can see real world benefits in cross border transactions through their own existing financial network without the end user knowing or caring its been used. Transfer through an Xrapid client and see up to 80% savings on your transfer cost whilst being able to see that the receiver has received your payment anywhere on the planet in real time and instantly? That's a game changer.
The technical side of proof of work and consensus can be argued back and forth for hours/days, but the fact is 99.99% of people on this planet and outside the cryptospace really don't give a shit about the tech....just like most things in life:
- Most people don't care how sausages are made. They just want to eat them.
- Most people aren't interested in how planes fly. They just want to get somewhere quickly and safely.
- Most people don't care about the inner workings of a lever tumbler locking mechanism. They only want to make sure their house is safe and can lock/unlock it to get in and out of it.
- Most people are not bothered about the inner workings of an internal combustion engine. They just want to drive the car.
- Most people really couldn't give a damn about who handles their transaction... so long as it costs them as little as possible and is done in the quickest possible time...so they can move on past the other things in life they also don't care about!
The main thing that matters to the average Joe in the real world in the context of this conversation? The fact that they have saved money and time. In the real world...life really is THAT simple.
To achieve simplicity however can be the most difficult thing of all. The work that is being constantly pushed by Ripple for regulatory clarity and forging a path to legal and clear usage in a world where there are plenty of barriers should not be underestimated. Ryan Zagone summed it up exceptionally well in a recent panel discussion at the IMF where he rightly commented that the technical challenges have all but been overcome already. Now, it is challenging the system from the inside to allow the space to flourish which matters:
-The only problem that holds XRP back is regulatory certainty, not technical issues.— Steven Diep (@DiepSanh) January 16, 2019
-We need to have a level playing field for XRP so that the market can pick which one they want to use.
Ryan Zagone, Ripple
Nov18 at IMF event#Ripple #Blockchain #XRP pic.twitter.com/dLsoqrRF34
To put the value of Ryan's comments into perspective, it's worth considering the advice of Richard Tafel. Graduated from both Cambridge and Harvard university with a history of seeking the best in humanity through both founding and working for profit and non-profit organisations throughout his career. In an interview with Bigthink.com he posed five steps in advocating change:
- Find a focus. Tafel is fond of referring to the "trim tab, the little rudder on a boat that when you change it can change a whole system. " The first question activists should ask themselves is, what one rule could we change that would change the whole system?
- Embrace the status quo. Sometimes. A little bit. It's a paradox, he admits, but "insider" status and connections will help you get things done.
- Ask the system how it can be changed. "Very often, I’ll go right to the bureaucrat and say I want to change this system, how would I do it, and they give me a strategy I would have never come up with in my most wild fantasies. Talk to these people and they can do it."
- Appeal to the "better angels" of those in power. "Every success that I’ve had in changing a system is at some point I’ve said to somebody look, you know this is the right thing to do and this is why you’re really here and could you help me. It’s not going to help you politically, it’s not going to get you any votes, it’s not going to get you any money, but you as a person, will you help me in changing this thing. And invariably people really rise up to do that."
- Be tenacious. This is something we all struggle with, non-profits as well as individuals, but it's the most important thing you can do. Get an idea, figure out your strategy, and hold on to your vision.
The above finally brings us to a conclusion that I suspect most XRP investors already fully understand. With the companies working on the XRP Ledger and in particular Ripples push for regulatory clarity from inside the system, all the points above are already covered and done so in quite significant level on a global scale through engagement of government, central banks, charitable donations, political lobbying, education and far more. What Ripple are doing not just for XRP, but for the entire crypto space as a whole should be cause for celebration. Not ridicule.
Crypto does have the potential to create a lot of change for good. But we don't have to the burn the fucking planet to the ground to do it.
But hey...I'm just another XRP bot. So what do I know...