How I Came To Understand Bitcoin Maxis
It took three years, but I think I finally get it.
(A video discussion of this article is available on my YouTube channel.)
I was raised in a doomsday cult that taught God was getting ready to wage the War of Armageddon and bring about the end of the current world order. The governments, all ruled by the Devil, would be replaced with the Kingdom of Heaven ruled by Jesus Christ. The cult discouraged any kind of real financial planning because of this worldview. Afterall, what was the point of investing in a system facing imminent destruction? This extreme religious upbringing--and my eventual escape from it--helped me in my path to understanding Bitcoin Maximalism.
My Bitcoin experience began with a losing trade in the summer of 2014. After reading a few articles about this “magic internet money”, I bought my first whole coin for about five hundred dollars. I wasn’t prepared for how volatile the price swings would be, though, and sold at a loss later that year. If only I had known…
The last five years have been an intense learning experience for me. At the end of 2017 I left the cult with my wife, who is currently shunned by her entire family (as required by cult doctrine). I lost all my “friends” as well. We had to learn how the real world worked and how to build a social network outside of the ready-made set of “friends” handed to us by the Church, as getting close to non-members was deeply discouraged. All non-members were going to die by God’s hand at Armageddon anyway, so there was no point in getting too familiar. Plus, their wicked ways might rub off on you, so it was best to keep your distance for fear you might get hit by a stray fireball when The End came.
After leaving the cult I embraced life with the fervor of a wrongly jailed prisoner embracing freedom upon exoneration. I studied politics for the first time, since members didn’t vote or participate in any form of campaigning due to the belief that all earthly governments were Satanic. I read books on how far humanity had advanced and how much better off we all are than in centuries past, however imperfect the current world may be. I was excited and optimistic for the future.
In 2004, I started and grew a successful business as a software developer and Internet Marketing Coach. The tools our team developed helped people compete with larger companies for getting websites to the top of the search results in Google, as well as other related use cases. For many years, searching Google for “coolest guy on the planet” returned my website as the number one result, demonstrating the importance of the Bitcoiner mantra, “Don’t trust, verify”.
During the Great Financial Crisis of 2008 to 2012 I employed dozens of people. My company didn’t need the workers, I just wanted to help families stay afloat during difficult economic times. It’s a decision I will forever be proud of. The waters of the market I worked in were full of sharks selling vaporware, however, and I eventually found myself confronted with ethical decisions that I wasn’t comfortable with in order to compete. I wanted out. On top of the moral dilemma, I was working 10 hours a day six or seven days a week. The burnout was real.
Despite making millions of dollars in successful software product launches, I lost most of it through poor financial decisions coupled with intensifying competition from much better capitalized companies. On top of that I went through a very expensive, acrimonious divorce. “Love is grand,” they say, “but divorce is a hundred grand.” I grew up poor and had little formal or personal education in how to properly manage money or what money even really was, so when I finally “made it” I didn’t know how to properly handle it.
As you might imagine, it wasn’t all bad. The money afforded me many incredible personal experiences. I traveled the world, taking first class flights across Europe and even writing code in a suave Paris Airbnb in the morning and exploring the city in the afternoon. I never worried about price tags and rented a private jet a couple of times to vacation on the Hawaiian island of Kauai. But my personal and home life were a mess, I was still a true believer in the doomsday cult praying for the end of the world, and on balance was very unhappy. I felt like the wealthy writer of Ecclesiastes, “I have seen all the works that are done under the sun; and, behold, all is vanity and vexation of spirit.”
In 2019 I was 42 years old, had escaped the cult and was remarried to a wonderful woman whom I adore. I spent much of my time studying markets to prevent repeating past mistakes and working to develop a retirement plan. I did well with stocks that year but kept hearing about Bitcoin and how it was like nothing else. After reading The Bitcoin Standard, I finally understood why sound money was important and why fiat was doomed to fail. I again bought into BTC, this time at around nine-thousand dollars.
When Covid first reared its ugly head in early 2020, I did what many people did: listen to the “experts”. My family was careful. We avoided social settings, wore masks and made sure everything was extra-clean around the house. It seemed like the sensible thing to do until there was enough data to know what the world was really up against.
When the CDC started releasing that data in the fall of 2020, I was relieved. “Great!” I thought. “The data clearly shows that Covid isn’t a threat to young or healthy people, so all of this lockdown stuff can finally come to an end.” But, of course, it didn’t. In fact, governments doubled down on the unnecessary, counterproductive restrictions. That was my wake-up call to apply “Don’t trust, verify” to the governments and medical institutions people were listening to. Thus began an intense deep dive into Covid, Allopathic medicine, Big Pharma and vaccines. Thankfully I woke up prior to the vax rollout. No one in my family is vaccinated.
As the scenes of Pandemic Theatre played out, I began to understand that politics exhibited many of the same attributes as the cult I came out of. There were leaders that could not be questioned and members who would shame and shun anyone who dared to speak up. Their god was The Science™, their Pope Anthony Fauci, their Clergy the CDC and politicians. Rights were eroded and small businesses shut down while big box chains and mega-corporations raked in record profits, including Big Pharma. Trillions of dollars were printed out of thin air, proving true the Cantillon effect that says the largest beneficiaries of changes in money supply are the people and corporations closest to the money printers.
Unlike hardcore Bitcoiners, my investment goals were purely financial, not philosophical. Like so many others in the crypto casino, I was chasing gains. Because of this I sold my Bitcoin at $45,000 and jumped into alt coins in the belief that I could multiply my investment, which I did. In fact, I did well enough to be able to stop writing software for about a year and a half, which was a much-needed hiatus and gave me even more time for the research I was doing.
Then came the market crash of 2022. With inflation clearly not “transitory”, the money printer was halted, and the Fed began to raise rates at a historically unprecedented pace. Markets reacted negatively, bringing all cryptocurrencies down with them. The price of Bitcoin cratered along with everything else. Low prices exposed the weakness of overleveraged schemes like Celsius and 3 Arrows Capital, sending them into bankruptcy. Terra collapsed along with a host of other smaller crypto operations.
The purportedly second largest centralized crypto exchange in the world, FTX, stepped in with a promise to rescue the industry, only to turn out to be the largest fraud of them all when its own balance sheet was leaked. FTX’s founder, Sam Bankman-Fried, was accused of stealing investors and user’s money and sending it to its trading arm, Alameda, where it was gambled away on high-risk trades that spectacularly failed to the tune of $10 billion. A massive “hack” of FTX followed shortly thereafter, the repercussions of which are still playing out. Evidence of political intrigue emerged, supported by the fact that most mainstream media coverage treated SBF with kid gloves, some even painting him as a victim rather than a predator. As of this writing nobody has been arrested. By way of comparison, Bernie Madoff was in handcuffs the day after his fraud was uncovered.
Bitcoin began flying off exchanges while Bitcoiners shook their damn heads at how many people had again ignored one of their most basic truths, “Not your keys, not your coins.” While I was glad to see people finally listening, the damage done was tremendous, both in financial and reputational loss. Having started with Bitcoin myself, I always self-custodied my bags and so was unaffected by any of the collapses, at least as far as losing any of my holdings.
Though I never lost my respect for Bitcoin or the principles of decentralization and sound money, these events returned them front-and-center to my consciousness. I resumed listening to Bitcoiner podcasts, reading long-form articles, watching videos and reminding myself just how bad off the current world financial system really is. “It’s just math,” say the Bitcoiners, and I believe they are correct. There’s no stopping the debt spiral now. The End is indeed coming, just not in the way I had been taught growing up.
During the time I was trading and hodling alt coins, I thought Bitcoin Maxis were too extreme. Even though I agreed with their views on sound money and decentralization and agreed that most cryptos were just vaporware rug pulls waiting to happen, I didn’t understand their disdain for every crypto that wasn’t Bitcoin. This was especially true for projects that were actively being used in the real world to seemingly beneficial effect.
As a software developer myself I am aware that there is no single tool that covers all use cases. There’s Windows or Mac OSX or Linux for computers, Android or Apple’s iOS for phones, and countless different apps that run on all those platforms that perform different functions, many of them competing for market share. This competition encourages innovation which ultimately makes all software better. That free-market principle is something Bitcoiners honor, so I didn’t understand why they jettisoned it when it came to cryptocurrencies. My assumption was they did so out of self-interest. If people invested in other projects, they wouldn’t put their money in Bitcoin, which hurt the Bitcoiner’s own portfolio.
Then there was Proof of Work. It’s power intensive and comparatively slow, even if far superior to bank technology like SWIFT in terms of speed and guaranteed settlement. Even if the “green” argument was just FUD (fear, uncertainty and doubt), why stick with Proof of Work when other tech had proven far faster and more efficient, making it much more viable for payments systems?
Today, at last, after everything that’s happened over the past three years, I finally get it.
“Don’t trust, verify.”
The whole Bitcoiner philosophy comes down to those three words. Trust has always been abused, even if only by a small minority. But all it takes is a minority of people abusing and misusing your trust to cause you, and everyone else who trusts them, grave harm. So don’t trust, verify.
How does this relate to Bitcoiner’s referring to all other cryptos as “shitcoins” and dismissing them outright? It’s simple. The entire fiat currency system is a ponzi scheme. Fiat is “money by decree” – it’s not backed by any real asset and only has value because the government says it does. Governments use fiat to rob citizens by printing money without citizens’ consent. This is, in effect, a tax that has not been approved by or voted on by the people. It’s theft.
For example, prior to fiat, governments would need actual hard currency (usually gold) to fund the wars they wanted to fight. If they didn’t have the money, they couldn’t fight the wars without raising taxes, which is never a popular proposition. With fiat, however, the government can print as much money as they want, pulling the money to fund their self-serving conflicts out of the pockets of the people who use that fiat currency. No permission necessary, and without most people realizing what’s happening.
Fiat also keeps people on a perpetual hamster wheel through inflation. If you know the money you have in the bank will be worth less next year than it is this year, you must keep trying harder to earn more money year after year just to keep your head above water. This keeps the majority of people perpetual wage slaves, never quite able to get ahead, at least not enough to stop and enjoy their lives.
Without inflation you could live beneath your means, save your extra money, and trust in the deflationary effects of technology to make your money stretch much further once you decide to retire. Afterall, with technology constantly making supply chains more efficient through improvements in transportation and automation, everything should cost less over time, not more. And yet prices keep rising. Why? Inflation.
What does fiat have to do with cryptocurrencies other than Bitcoin? All other cryptocurrencies are working within the current financial system trying to improve it, make it more efficient, provide better privacy, etc. This has some positive effects. For instance, stablecoins give access to the US Dollar to people in countries whose currency is undergoing severe inflation and whose banking systems are corrupt or unreliable. But it still requires the fiat ponzi to function.
Let me illustrate it using a highly polarizing political issue in the United States: abortion. People who are against abortion believe that life begins at conception. That means that anyone who willfully terminates a pregnancy at any time for any reason except perhaps saving the life of the mother, is murdering a child. Those who do not believe life begins at conception can argue until they’re blue in the face about women’s rights or cite the studies on the medical, social and health benefits for women thanks to legalized abortion. It won’t budge the pro-life individual one iota, because they believe you’re murdering a baby, full stop.
In this way, Bitcoiners are like the pro-lifers. They believe with absolute conviction that the current fiat system is an abomination that is responsible for the enslaving of billions of people and the destruction of the free market that would make all those people’s lives better. It’s responsible for the corruption in politics, the widening social inequality, the perpetual warfare governments engage in and a host of other terrible effects. You can talk until you’re blue in the face about how a highly efficient cryptocurrency could give access to the financial system to billions of unbanked individuals, improving their lives by helping them escape their own inflationary currencies and bypassing their corrupt governments. It doesn’t matter because you’re only providing those people access to another fiat currency, and fiat is murdering the free market. You can talk about how issuing tokens give small businesses the ability to raise money without having to pay billions to big banks to IPO. Doesn’t matter. You’re still working within the fiat system, and the fiat system is the fundamental root of all the problems to begin with.
To the Bitcoiner, cryptocurrencies are decks being built onto the Titanic as it sinks, while Bitcoin is the life raft people need to get on to save themselves. The tech of some cryptos might be great, but it only delays the inevitable demise of the sinking ship. Maxis believe that Bitcoin is destined to replace fiat, not shore it up, returning sound money to the world. As they often say, “Bitcoin fixes this”.
Fiat is very much like the vaporware that’s sold by the sharks in the industry I’ve worked in for decades. The sales pitch sounds great. Lots of grand promises are made. It even looks really good. But in the end the only beneficiary is the one who created it – and that a’int you. So for Bitcoiners, no matter how much an individual crypto’s tech might meet the “Don’t trust, verify” standard on its own, if it’s an extension of--or relies on--the fiat system, it fails the test.
Now let’s test the “green” argument against Proof of Work. The claim is that Bitcoin uses too much energy and therefore creates too much CO2, which is bad for the environment and negatively affects climate change. You could choose to “Trust” that claim, but instead you should “Verify” it, and you don’t even need to understand the data or The Science™ to do so.
How do the world leaders who are making these claims travel to the Climate Change conferences and summits they attend? Do they take mass transportation, flying coach or even first class? Or better yet, do they forego travel completely and conduct all such conferences via Zoom meetings to conserve as much energy and CO2 as possible?
No, they travel by private jet. In just one hour a private jet can burn up to 600 gallons of gas and emit two tons of CO2. Two tons. The stench of their hypocrisy makes it impossible for them to even pass the sniff test, making any further digging into The Science™ completely unnecessary. They don’t believe their own claims. They’re lying with nefarious intent, and that’s all I need to know. Of course, the data regarding Bitcoin’s actual energy use also proves them wrong, but that’s beyond the scope of this discussion and (in my opinion), is unnecessary once you see the hypocrisy of the claimants.
“Don’t trust, verify” applies to far more than just money, though. It’s a philosophy for life in general.
Don’t trust. Look at the last three years. If you thought you could trust the government to look out for your best interests, you were wrong. If you thought you could trust the CDC to be honest about Covid, you were wrong. If you thought you could trust doctors to stand up for natural immunity, you were (largely) wrong. Many who thought they could trust their local government to let them exercise bodily autonomy without repercussions were very wrong. If you thought you were protected by the Constitution and the freedoms it affords you, you were wrong. Laws are only as strong as the people who enforce them.
Verify. Do cloth masks stop airborne viruses? If you “Trust”, you believe they do, because politicians, the CDC and Anthony Fauci said they do (though Fauci flipflopped on it after clearly stating in Spring of 2020 that they do nothing at all). If you “Verify”, you go and look at all the studies that include control groups (Gold Standard, not the observational studies which are just junk science). Those studies clearly demonstrate that cloth masks afford zero protection against airborne viruses. Once you know that, you can’t “Trust” these people or institutions at all. At best, they’re incompetent because they didn’t bother to read the studies before making recommendations or passing mandates. At worst, they’re liars, telling you to do something they knew for a fact had no protective impact at all for some nefarious reason.
For Bitcoiners, this isn’t just about money. It’s a guidestone that influences every aspect of life. It’s a belief system, though I’ll stop short of calling it a religion since people of every conceivable religion also subscribe to its tenants. To those who aren’t Bitcoiners, Maxis can appear to be in some kind of cult, but it’s not a cult. Quite the opposite, in fact.
Bitcoiners are people who, like me, have escaped a cult. The Cult of Fiat. Once they were like everyone else, brainwashed into believing that the government could be trusted with control over the money printer, that the Fed was capable of central planning of the economy, and that inflation was necessary for economic growth.
Plato’s famous allegory The Cave describes a group of people who have lived chained to the wall of a cave their entire lives. All they can see is a blank wall and the shadows cast upon it from a fire burning behind them. They give the shadows names, believing them to be actual representations of the real world. One of the prisoners escapes from the cave and, having experienced the actual world, realizes that the shadows are not true representations of it. He returns to the cave to try and convince the other prisoners, but they don’t believe him because the shadows are all they have ever known. Bitcoiners are the escaped man.
The Bitcoiner tribe can be rowdy and crass and harsh, but you must consider what they’re out to achieve and what they’re up against. Their endeavor is not for the feint of heart. It’s a real David and Goliath moment. The Bitcoiner stands, golden coins in hand, looking the Giant in the eye with a defiance that onlookers usually perceive as madness. Maybe it is madness, but without that dauntless quality Bitcoin wouldn’t have come as far as it has. And I, for one, will cheer them on as the Giant collapses.