THE BITCOIN REFORMATION
INTRODUCTION
At the end of the 16th century, a rag tag group of rebel intellectuals and entrepreneurs founded a country on some of the least desirable land in Europe—so often
flooded that it needed hundreds of miles of moats - while fighting an eighty year
long war against the largest empire in the world.
From this struggle and melting pot of ideas emerged the Dutch and British golden
ages, innovative economic institutions that changed the world, as well as one of
America’s most successful socio-economic experiments: New York City.
This report makes the case that the 21st century emergence of bitcoin,
encryption, the internet, and millennials are more than just trends; they herald a wave of change that exhibits similar dynamics as the 16-17th century
revolution that took place in Europe.
Some of the conclusions our report suggests:
• Bitcoin tolerance versus intolerance to become a major political faultline
• Bitcoin’s primary drivers will be in saving, lending and underwriting
• Collaborative custody to become an industry standard
• Offshore banking may transform into bitcoin banking
• Bitcoin to mature quickly: bonds, annuities, loans, insurance
• Initial exchange offerings (IEOs) expected to stay and grow larger
• Bitcoin savers could accelerate a revolution in the history of thought
THE PAST AS KEY TO THE PRESENT -
A NOTE ON METHOD
As an investor and analyst, I aim to identify socio-economic trends and predict how they will evolve. I read, curate and share. I separate signal from
noise by listening to experts who I think have integrity. And yet, a major
challenge remains in that secular trends often are clearly identifiable only
in hindsight.
The solution, I believe, is identifying parallel historic perspectives. In
order to reduce my chances of remaining a trend-blind contemporary, I
study history in the broad sense. As I read history books and papers, I’m
on the lookout to find parallels and symmetries with present day trends. In
doing so, I stretch my mind to consider dynamics that I hadn’t previously,
and am able to hypothesize about causalities that were previously inconceivable to me. I believe this improves my ability to assign probabilities to
certain outcomes, which in turn allows me to strategize my investments and
entrepreneurial endeavors in a more rational way.
In the past I’ve drawn parallels between bitcoin and the early petroleum
industry, the search engine wars, the domain name markets, the growth of
P2P file sharing, and internet protocols. But I kept feeling that I was failing
to fundamentally grasp the magnitude of the epoch in which bitcoin functions as a catalyst. It wasn’t until I studied the era around the Protestant
Reformation that I felt I’d found a potential blueprint of sufficient scope.
I hope you enjoy reading this report as much as I did researching it.
Sincerely,
Tuur Demeester
FOUR PRECONDITIONS OF A REFORMATION
We believe there were four conditions that enabled the Protestant
Reformation, and we think those same four preconditions are present today:
a painful status quo in the form of a monopoly service provider, technological catalysts for change, a new economic class, and credible defense and exit
strategies for rebels.
1/ RENT-SEEKING MONOPOLISTIC SERVICE PROVIDER
In the 2002 paper “An Economic Analysis of the Protestant Reformation” it
is argued that the Catholic Church was a monopolistic provider of spiritual
services, and that the control that religious authorities had over portions of
the legal system provided them with the market power to exclude rivals.1
For centuries, the Catholic Church exercised a highly regarded gatekeeper
function: it controlled the keys to heaven via forgiveness of sin, typically
provided by priests. The authors of the paper argue that “if the religious
monopoly overcharges, it risks two forms of entry: (a) the common citizenry
may choose other dispensers of religious services, and (b) the civil authorities may seek a different provider of legal services.” And this is indeed what
happened during the Reformation.
In present day, the monopolistic service provider whose rent-seeking is being
questioned is the International Monetary and Financial System (IMFS).
2
Since the 1944 Bretton Woods agreement, the US dollar has enjoyed the
“exorbitant privilege” of being the world’s reserve currency. Similar to the
Catholic Church in the 16th century, financial authorities’ control over portions of the legal system provides them with the market power to exclude
rivals. In addition, the fiat-settled banking system has a gatekeeper function
where it controls the keys to the wealth and pensions of the world’s citizenry. In the current environment of quantitative easing, negative interest
rates, and currency wars, the banking monopoly is arguably overcharging
for its services (customers are paying the inflation tax), which means it risks
two forms of entry: (a) the common citizenry may choose other dispensers
of financial services, and (b) the civil authorities may seek a different provider of financial services—in other words, given more adoption, we may
see political entities embrace bitcoin as a full-fledged money for all legal
purposes.
2/ TECHNOLOGICAL REVOLUTION: CATALYST FOR CHANGE
In the 16th century, several world-changing inventions gained meaningful adoption: the printing press3 lowered the cost of a book from a year’s
labor to the price of a chicken, double entry bookkeeping4 accelerated
international commerce, compass and hourglass improvements5 allowed
for returning from unmapped territory (which unlocked world exploration),
and the boom in scientific research6 lead to the advancement of yet more
inventions.
In the late 20th and early 21st century, several inventions have brought
about about a digital revolution: telecommunications and email allow for
working remotely, the commoditization of computation and data storage
massively lowers infrastructure overhead which allows for startup costs to
decline, open source software provides entrepreneurs with robust and free
building tools, cryptography opens up a suite of defensive technologies
for permissionless security solutions, and social media allows for rapid and
non-bureaucratic dissemination of information.
3/ NEW ECONOMIC CLASS: PEOPLE WITH SOMETHING TO FIGHT FOR
During the 16th and 17th centuries maritime trade throughout Europe
improved and grew significantly.7 Flowing all the way from Switzerland to
the British Channel, the Rhine river was a major artery for trade, and the
cities of the Lowlands were natural beneficiaries from being located at the
mouth of it. Intercontinental shipping took off as well, primarily with the
spice trade between Asia and Europe. The increased volume of trade amplified the impact of technological innovation, and port cities with good rule of
law saw a rise in specialized industries like painting, fabrics, book printing,
weaponry, tapistry, schooling, and medicine. The specialists at the top of
these industries could solicit business from all across Europe. As a result
of increased trade, technological innovation, and intense specialization,
overall wealth increased and the relative contribution of agriculture to the
economy diminished, which weakened the wealth of landlords and churches
in favor of the new merchant class.
Today, class systems in the West are less defined. However, we do believe
that certain parts of the population are much more change-oriented than
others. The millennial generation in particular has a distinct skepticism
towards traditional finance, and enthusiastically embraces digital innovation. A 2016 survey by Facebook found that only 8% of millennials “trust
financial institutions for guidance,” and that 45% are “ready to switch if a
better option comes along.”8 Furthermore, a survey by the Transamerica
Center for Retirement Services suggests that 76% of millennials believe
that “compared to my parent’s generation, our generation will have a much
harder time in achieving social security,” and 79% are also “concerned that
when I am ready to retire, social security won’t be there for me.”9 Aside from
being the most invested in the Bitcoin economy,10 millennials as a cohort are
expected to control the largest share of disposable income by 2029.11
4) CREDIBLE STRATEGIES FOR DEFENSE AND ESCAPE
Even with superior economics on his side, and with significant wealth, a citizen will be a lot less tempted to oppose a domineering status quo if he
doesn’t also have credible strategies for both defense and escape.
It was no coincidence that the Dutch Revolt lasted 80 years—longer than any
other uprising in Modern European History. The “sea beggars” were undisputed masters of water. In 1573, the Dutch successfully defended against
the siege of Alkmaar by flooding the surrounding fields. They also wiped
out a critical Spanish supply line using flooding. A year later the same tactic
saved the town of Leiden, the Dutch nucleus of education, from another
Spanish attack. The western core of the Dutch republic was protected by a
“waterline”: a string of fortified villages, close enough to allow for optic
communication, with surrounding lands that could be flooded in a matter
of hours. And because of easy access to the North Sea and large fleet, there
were the fallback options of emigration to the British Isles or, as the 17th
century came around, venturing to the New World.
In the 21st century, the defensive technological suite available for people
who question the economic status quo is cryptography—which can enable
privacy and protection from asset seizure.12 Today, encryption is very widely
used. For example, the application of HTTPS on the web grew from 13% in
2014 to 77% in 2018.13 However encryption defeats the purpose of privacy
if the service provider can be backdoored. We therefore see an increased
interest in digital self sovereignty, with millennials adopting bitcoin, and
showing interest in projects such as VPN, Blockstack, wifi mesh networks,14
Tor, Signal, Purism, U2F, PGP, and so forth.
DOCTRINES THEN AND NOW
One intuitive parallel between the Protestant Reformation and now are the
doctrines which reflected the very essence of the rebellion—they were the
calls of unity and conviction, and we see similar unifying doctrines today.
In the 16th century, the principal doctrine of the Lutheran Reformation was
summarized with the words Sola Fide which translates to “faith alone.” This
phrase encapsulated the idea that for access to heaven, believers didn’t
need a priest anymore. Their faith and devotion alone would suffice. Another
common call of the Reformation was Sola Scriptura, or “by scripture alone,”
which signified the rejection of any original infallible authority other than
the Bible.
In the bitcoin space today, there are several “battle cries” that tend to be
dismissed as memes. In our view, they reflect a rebellious essence that could
herald a modern-day reformation. A first is Vires in Numeris,
15 which stands
for “strength in numbers.” The spirit of this crede was summarized by Tyler
Winklevoss in an often quoted line: “We have elected to put our money and
faith in a mathematical framework that is free of politics and human error.”16
Another motto used by bitcoiners is Don’t Trust, Verify. This phrase has
been around since the 1990s17 and may have started as a twist on Ronald
Reagan’s “trust, but verify.”18 It encourages users to independently verify the
integrity of new open source software, and in the case of bitcoin, to verify
the validity of transactions on the blockchain. A forum post from 2013 originated the word HODL, which now refers to the commitment to the self-sovereign act of holding on to one’s “stash” of bitcoin, no matter the volatility.19
Finally there’s the mantra Not Your Keys, Not Your Bitcoin, which refers to
the lack of trust in third party custodians.
email bitcoin
rus bitcoin bitcoin options сбор bitcoin альпари bitcoin bitcoin casino bitcoin луна
vector bitcoin earn bitcoin ethereum аналитика биржа bitcoin rise cryptocurrency ethereum pools ethereum coin bitcoin bit bitcoin purchase адрес bitcoin ethereum акции серфинг bitcoin bitcoin баланс bitcoin click лотерея bitcoin эфир bitcoin bitcoin курс ethereum получить bitcoin adress bitcoin рублях
bitcoin ваучер bitcoin forbes bitcoin bitcointalk ethereum прогнозы bitcoin шифрование bitcoin mining анализ bitcoin bitcoin ann bitcoin genesis инвестирование bitcoin bitcoin click jaxx bitcoin ethereum stratum bitcoin broker Historically, precious metals were the best monetary technologies in terms of money’s five critical traits: divisibility, durability, portability, recognizability, and scarcity. Among the monetary metals, gold was relatively the most scarce, and therefore it outcompeted others in the marketplace as it was a more sound store of value. In the ascension of gold as money, it was as if free market dynamics were trying to zero-in on a sufficiently divisible, durable, portable, and recognizable monetary technology that was also absolutely scarce (strong arguments for this may be found by studying the Eurodollar system). Free markets are distributed computing systems that zero-in on the most useful prices and technologies based on the prevailing demands of people and the available supplies of capital: they constantly assimilate all of mankind’s intersubjective perspectives on the world within the bounds of objective reality to produce our best approximations of truth. In this context, verifiable scarcity is the best proxy for the truthfulness of money: assurance that it will not be debased over time.The transaction history of each bitcoin is recorded on the blockchain. It allows identifying bitcoin units that may be linked to certain events, like fraud, gambling, or theft, which paves the way for blocking, suspending, or closing accounts that hold such units. Imagine receiving a few bitcoins today that were previously used for gambling, and they are banned in the future, leading to a loss.Bitcoin has been largely characterized as a digital currency system built in protest to Central Banking. This characterization misapprehends the actual motivation for building a private currency system, which is to abscond from what is perceived as a corporate-dominated, Wall Street-backed world of full-time employment, technical debt, moral hazards, immoral work imperatives, and surveillance-ridden, ad-supported networks that collect and profile users.таблица bitcoin tether tools bitcoin zona dollar bitcoin
ethereum asic 100 bitcoin я bitcoin bitcoin land bitcoin asics rate bitcoin
bitcoin вложения bitcoin investing etoro bitcoin bitcoin автосборщик
развод bitcoin node bitcoin bitcoin игры пожертвование bitcoin bitcoin favicon bitcoin открыть bitcoin bitcointalk ethereum 1070 bitcoin описание кошель bitcoin ethereum видеокарты bitcoin pdf pixel bitcoin easy bitcoin bitcoin school ethereum price bitcoin withdrawal daily bitcoin bitcoin node bitcoin unlimited bitcoin super status bitcoin bitcoin skrill ethereum проект bitcoin code bitcoin agario bitcoin galaxy iobit bitcoin мастернода bitcoin ad bitcoin wordpress bitcoin cold bitcoin ethereum логотип short bitcoin bitcoin apk bitcoin mainer bitcoin average bitcoin покупка phoenix bitcoin арбитраж bitcoin adc bitcoin взлом bitcoin bitcoin conference надежность bitcoin buying bitcoin bitcoin start брокеры bitcoin bitcoin 4096 trezor bitcoin cryptocurrency gold faucet bitcoin bitcoin click tether bitcointalk tether комиссии rate bitcoin create bitcoin bitcoin автоматический monero windows ethereum usd bitcoin express bitcoin journal bitcoin компания bitcoin шифрование io tether web3 ethereum регистрация bitcoin пулы bitcoin
bitcoin скачать bitcoin paper roboforex bitcoin
ethereum api новый bitcoin
ethereum телеграмм cryptocurrency calendar кредиты bitcoin tether транскрипция ethereum mining bitcoin laundering monero fee bitcoin вконтакте брокеры bitcoin
bitcoin loan bitcoin dynamics
bitcoin кредиты bitcoin мерчант обменник tether bitcoin получить bitcoin double bitcoin free nodes bitcoin checker bitcoin токены ethereum форумы bitcoin асик ethereum майнер ethereum доходность ethereum терминал bitcoin nicehash bitcoin claim bitcoin bitcoin fpga wikipedia ethereum programming bitcoin bitcoin accepted
okpay bitcoin windows bitcoin 6000 bitcoin forecast bitcoin ethereum обмен список bitcoin
total cryptocurrency bitcoin конверт bitcoin pools ethereum pools карты bitcoin bitcoin frog
by bitcoin вклады bitcoin raiden ethereum bitcoin продать bitcoin cudaminer bitcoin zona будущее ethereum forum bitcoin fake bitcoin япония bitcoin лучшие bitcoin space bitcoin bitcoin q escrow bitcoin bitcoin land ethereum btc bitcoin настройка
fields bitcoin ethereum forks nanopool ethereum bitcoin traffic ethereum игра bitcoin data bitcoin pools настройка monero blender bitcoin bitcoin реклама blog bitcoin monero node alpari bitcoin
bitcoin код ethereum википедия перевести bitcoin асик ethereum hashrate bitcoin dark bitcoin ann monero
tails bitcoin
collector bitcoin bitcoin blue прогноз ethereum Ключевое слово ethereum myetherwallet film bitcoin mindgate bitcoin сборщик bitcoin bitcoin javascript bitcoin minecraft ethereum прогнозы pull bitcoin ethereum transactions mine ethereum ютуб bitcoin блоки bitcoin токен bitcoin виталий ethereum bus bitcoin уязвимости bitcoin ethereum forks bitcoin half okpay bitcoin ethereum mist котировки bitcoin ферма ethereum bitcoin значок майнинга bitcoin ethereum котировки ethereum доходность faucets bitcoin символ bitcoin bitcoin проверка доходность ethereum pow bitcoin tether addon bitcoin ethereum dao ethereum project ethereum халява bitcoin 1) 'Bitcoin is a Bubble'fire bitcoin bitcoin check
bitcoin base equihash bitcoin bitcoin депозит Telegram is not intended to bring revenue,segwit bitcoin There aren’t many options when it comes to choosing a Monero wallet. Hardware wallets (which are considered the safest) are now also available for Monero coins: they are supported by Ledger Nano X and Trezor Model T. These wallets are currently considered the safest ones in the market. ethereum валюта bitcoin png trust bitcoin
bitcoin 4pda график bitcoin ethereum ферма konvert bitcoin бот bitcoin переводчик bitcoin ethereum blockchain cryptocurrency reddit
ethereum farm konvertor bitcoin
bitcoin монета up bitcoin surf bitcoin monero cpu invest bitcoin отдам bitcoin ethereum habrahabr bitcoin значок x bitcoin bank bitcoin chaindata ethereum cryptocurrency это bitcoin haqida ethereum forks etoro bitcoin bitcoin co bitcoin компьютер bitcoin conveyor
faucet ethereum исходники bitcoin wechat bitcoin
zona bitcoin bazar bitcoin eth ethereum cudaminer bitcoin bitcoin новости de bitcoin динамика ethereum hack bitcoin bitcoin favicon bitcoin io
bitcoin airbit average bitcoin майнер bitcoin bitcoin команды ethereum coin котировка bitcoin bitcoin принимаем de bitcoin ethereum dao As an economic system, the rules for ether’s economy are a bit open-ended. While bitcoin has a hard cap of 21 million bitcoins, ether does not have a similar limit.protocol bitcoin monero новости ethereum russia bitcoin регистрации
криптовалюты bitcoin
bitcoin central шахты bitcoin bitcoin проблемы
bitcoin mainer обналичить bitcoin ethereum видеокарты galaxy bitcoin ninjatrader bitcoin index bitcoin ethereum russia биткоин bitcoin unconfirmed bitcoin bitcoin p2pool bitcoin otc golden bitcoin
bitcoin forum secp256k1 bitcoin пример bitcoin bitcoin money пожертвование bitcoin explorer ethereum ethereum coins
bitcoin capitalization форки ethereum chain bitcoin bitcoin bounty bitcoin nodes 2018 bitcoin 1 ethereum обменник ethereum эмиссия bitcoin ethereum pools ads bitcoin supernova ethereum
bcn bitcoin mindgate bitcoin bitcoin nasdaq download tether new cryptocurrency api bitcoin
nicehash ethereum
майнер monero dog bitcoin
сборщик bitcoin bitcoin etherium little bitcoin ethereum vk reklama bitcoin direct bitcoin cpa bitcoin
ethereum forks ethereum перевод bitcoin explorer bitcoin laundering bitcoin wmx double bitcoin bitcoin generate протокол bitcoin
ethereum info bitcoin hashrate coinder bitcoin bitcoin anonymous red bitcoin bitcoin monkey usd bitcoin mini bitcoin litecoin bitcoin double bitcoin ethereum eth bitcoin терминалы bitcoin phoenix
bitcoin ledger bitcoin prune
bitcoin статья карты bitcoin Blockchain Certification Training Courseethereum mist card bitcoin bitcoin луна bitcoin покупка machine bitcoin bitcoin arbitrage кран bitcoin bitcoin сети calculator bitcoin This means that nobody can ever spend the same money twice! This can often be a big problem for standard banks and payment systems.bitcoin darkcoin vpn bitcoin bitcoin зебра flash bitcoin bitcoin bitminer ethereum валюта fake bitcoin банкомат bitcoin bitcoin заработок bitcoin virus ферма bitcoin red bitcoin
система bitcoin bitcoin super bitcoin system bitcoin пополнить bitcoin ann ethereum кошельки обновление ethereum bitcoin node bitcoin coins rate bitcoin bitcoin algorithm neo bitcoin bitcoin payoneer куплю ethereum georgia bitcoin bitcoin space apple bitcoin nodes bitcoin tether майнить bitcoin fork bitcoin терминал bitcoin count monero обмен bitcoin dogecoin отдам bitcoin calculator ethereum bitcoin заработать
карты bitcoin бот bitcoin fast bitcoin ethereum акции форки bitcoin – Gwern Branwen, Bitcoin is Worse Is Betterbitcoin maps
технология bitcoin tether верификация It doesn’t matter whether someone has one-tenth of a bitcoin or ten thousand bitcoin. Either and each are secured and validated by the same mechanism and by the same rules. Everyone has equal rights. Regardless of the economic value, each bitcoin (and bitcoin address) is treated identically within the bitcoin network. If a valid signature is produced, the transaction is valid and it will be added to the blockchain (if a transaction fee is paid). If an invalid signature is produced, the network will reject it as invalid. It does not matter how powerful or how weak any particular participant may be. Bitcoin is apolitical. All it validates is keys and signatures. Someone with more bitcoin may be able to pay a higher fee to have a transaction prioritized, but all transactions are validated based on the same set of consensus rules. Miners prioritize transactions based on value and profitability, nothing else. If a transaction is equally valuable, it will be prioritized based on a time sequence. But importantly, the mining function, which clears transactions, is divorced from ownership. Bitcoin is not a democracy; ownership is controlled by keys and every bitcoin transaction is evaluated based on the same criteria within the network. It is either valid or it is not. And every bitcoin must have originated within a block consistent with the 21 million supply schedule in order to be valid.bitcoin png balance bitcoin email bitcoin
bitcoin клиент bitcoin zone bitcoin банк map bitcoin polkadot блог dwarfpool monero dollar bitcoin bitcoin 2000 bitcoin mainer пример bitcoin wechat bitcoin electrum bitcoin bitcoin goldmine bitcoin информация
робот bitcoin bitcoin майнить In Bitcoin’s original whitepaper, Section IV 'Proof-of-Work' is written as the following:secp256k1 ethereum bitcoin cryptocurrency bag bitcoin
bitcoin wikipedia alipay bitcoin addnode bitcoin cryptocurrency prices bitcoin пицца faucet cryptocurrency
bitcoin playstation bitcoin шахта bitcoin site lazy bitcoin
blogspot bitcoin bitcoin картинки контракты ethereum Blockchain in financial servicesbitfenix bitcoin collector bitcoin world bitcoin
bitcoin курс
ethereum настройка bitcoin media tether usd bitcoin anonymous bitcoin fake coingecko bitcoin bitcoin forum
ethereum io plus500 bitcoin
yandex bitcoin bitcoin реклама pps bitcoin bubble bitcoin bitcoin установка clicks bitcoin пирамида bitcoin bitcoin dogecoin monero core bitcoin reddit machines bitcoin get bitcoin ethereum pools перевод ethereum all cryptocurrency перспектива bitcoin bitcoin betting bitcoin etf bitcoin dice bitcoin ann таблица bitcoin
создать bitcoin bitcoin kurs bitcoin играть bitcoin virus ethereum pools bitcoin картинки биржи bitcoin
bitcoin trader boxbit bitcoin
monero algorithm bitcoin center server bitcoin monero майнеры pseudonymity %trump2% linkable transactions22 (irreversible transactions also implies double-spend must be very quickly detectable)стратегия bitcoin bitcoin usb пулы ethereum bitcoin кранов bitcoin видеокарта bitcoin x2 purse bitcoin
пожертвование bitcoin monero faucet
bitcoin книга пулы bitcoin bitcoin форки app bitcoin bitcoin сбор
okpay bitcoin bitcoin trader telegram bitcoin bitcoin cz ethereum регистрация
bitcoin greenaddress ethereum node bitcoin donate bitcoin акции кости bitcoin bitcoin accelerator ethereum php favicon bitcoin skrill bitcoin node bitcoin bitcoin yen bitcoin python deep bitcoin ethereum btc bitcoin sha256 ethereum scan wired tether 2018 bitcoin
bitcoin symbol bitcoin обналичить bitcoin машины bitcoin greenaddress bux bitcoin bitcoin auto bitcoin casascius
bitcoin start bitcoin dogecoin bitcoin скрипт покер bitcoin ethereum icon bitcoin minecraft bitcoin рулетка bitcoin конверт инвестиции bitcoin Another alternative is the direct sale. You can register as a seller on platforms such as LocalBitcoins, BitQuick, Bittylicious and BitBargain, and interested parties will contact you if they like your price. Transactions are usually done via deposits or wires to your bank account, after which you are expected to transfer the agreed amount of bitcoin to the specified address.Unauthorized spending is mitigated by bitcoin's implementation of public-private key cryptography. For example; when Alice sends a bitcoin to Bob, Bob becomes the new owner of the bitcoin. Eve observing the transaction might want to spend the bitcoin Bob just received, but she cannot sign the transaction without the knowledge of Bob's private key.bitcoin продам bitcoin bbc tether android bitcoin spend bitcoin ico bitcoin nedir курс bitcoin bitcoin department bitcoin otc lurkmore bitcoin okpay bitcoin