Lots of people are getting “Bitcoin rich”, but money isn’t everything. Before you jump into buying bitcoin, you may want to know if Bitcoin is an ethical investment. You’ve probably heard some negative things about it, but for now, you haven’t accepted those rumors as fact. There are just so many people that are into bitcoin, they can’t all be unethical people, can they? You just want to get the facts straight.
The thing about “ethics” as I see it, is that two different people can look at the same situation and come away with two different viewpoints. Two lawyers could interpret the same law differently using different historical precedents, and two scientists could come up with different solutions to a problem. Experts in any field could disagree.
Similarly, bitcoin is one thing that two different people may come to different conclusions about it.
All of that is to say that what I’m presenting in this article is just my opinion based on my own life experiences, and what I’ve learned about bitcoin. There’s no right answer to whether bitcoin is ethical or not.
If you believe, as I do, that bitcoin is money, then the question of whether or not it’s “ethical” has to be rejected. Bitcoin cannot be ethical or unethical because money must be neutral to be good money. I
In a world of physical money, this is accepted. A dollar is a dollar, regardless of whether you are buying bullets or butter. The same should be true of digital money.
6 Reasons It’s Ethical To Buy And Hold Bitcoin
1. Bitcoin Monetizes Cheap, Local Energy
Bitcoin is energy agnostic and location agnostic, meaning that you can use any type of energy, in any location in the world to mine for bitcoin. You can use a giant solar farm in the Arizona desert, or a creek turning a water wheel at your private mountain property. As long as you can connect to the internet in any way (satellite works fine, so Starlink is going to be awesome), you can generate money.
This means that many stranded, underdeveloped communities will have a new source of revenue through bitcoin mining. Obtaining bitcoin mining equipment is much easier than before and will continue to get easier as more ASIC manufacturers jump into the market. New ASICS will continually get more efficient and old ASICS will get sold on the secondary market. In 2022, people are still using 2017-gen S9s to mine bitcoin. That’s a 6-year lifespan!
Local communities can mine bitcoin with whatever energy is locally abundant, whether that be wind, solar, hydro, or natural gas. They can then sell their bitcoin on the global market for local currency. Bitcoin also helps monetize the buildout of energy generation facilities, meaning more people get access to cheap, abundant energy.
This is a very interesting solution to lifting forgotten communities out of poverty.
2. Bitcoin Allows People To Save Money Instead of Investing
Whatever happened to putting money in a savings account? These days, it’s dumb to leave cash in a savings account because you’re losing 2-8% per year, assuming you live in the US. Outside of the US, the situation is often worse, with billions of people living in countries with double-digit inflation. In the modern financial landscape, it’s simply impossible to save money and rely on a savings account for financial security.
Investing requires risk, no matter how you spin it. It’s standard practice in the US these days to simply use the S&P500 or a Total Stock Market Index Fund as a savings account. Put your money in an index fund so you aren’t losing purchasing power due to inflation. What this philosophy fails to acknowledge is that now your savings are at risk. The stock market doesn’t always go up. Sure, the US stock market as a whole has a good track record as an investment, but investing is not the same thing as savings.
An investment gets returns because it has risk. A savings account is supposed to be risk-free.
Only about 50% of Americans own stocks, and 90% of stocks are owned by just 10% of investors. The numbers are worse when you look globally and include nations outside of The West. In other words, in our current system, poor people can’t save their way to wealth, and they aren’t benefiting from the economic growth reflected in the stock market.
Bitcoin brings back the power of saving by having a global money that does not include the risk of investing in US companies. Even better, its money supply cannot be inflated away by any government.
3. Bitcoin’s Distribution Was (And Is) Fair
If there’s going to be a global monetary revolution, it should be fair, right? The great thing about bitcoin is that its launch and early days were as fair as they could have been, and even to this day, the only way to get bitcoin is through fair methods.
Many people have the impression that early bitcoiners are rich, so it’s not fair for the rest of us. Mainstream media loves to run stories about how whales (large bitcoin holders) own too many coins in the network, so bitcoin wealth is too unequal to be a fair system. This is, of course, not exactly the truth.
Firstly, in the Bitcoin network, more coins don’t mean more power over the network. Unlike other systems like Proof-of-Stake, which gives voting power to high net worth entities holding a large amount of coins in the system, this is not the case with bitcoin. Bitcoin doesn’t even have a “voting system”. Each individual user chooses to run the code they want, and as long as the code in consensus with other nodes on the network, they can transact with others.
More coins do not mean you get any kind of special treatment in the network.
Even on the mining landscape, all miners must equally compete for the block reward. More bitcoin wealth doesn’t mean easier mining! There is literally no advantage gained in the network by having more bitcoin. Of course, more coins mean more monetary wealth, but that is spent outside the network.
The great thing about bitcoin’s original distribution is that Satoshi didn’t raise any venture capital to start the Bitcoin project. He bootstrapped the code, then the community worked on it (for free) for several years. Bitcoin was worth nothing for the first year, and yet enthusiasts and hobbyists continued to work on the code to improve the network for ideological reasons, or maybe they just enjoyed the challenge. The point is that there was very little monetary incentive to do the work they did.
During the early years when people began to speculate on the price, 99% of people, including the mainstream news, would just laugh when you mentioned bitcoin. It was magic internet money backed by nothing, remember?
Plus, even those people who had fat stacks of bitcoin when it was $1 or $100 probably sold a significant portion of their stack during the 2013 or 2017 bull markets, so although they got rich at that moment, now they don’t have any bitcoin (or much less bitcoin). Many others lost money investing in failed altcoins or left the market to invest in other things like stocks or real estate. Being rich and being bitcoin rich are two different things.
Even to this day there is no central point of issuance, issuance rate is transparent and fixed. Anyone can mine bitcoin, and nobody can mine more than the code allows for.
4. Bitcoin Is Permissionless In All Aspects
There are no gatekeepers in Bitcoin. Bitcoin is not a company, organization, group, or brand. If you want to contribute to bitcoin’s code, you do not need to ask for permission. You simply write the code and make your case, and it will be judged on its merits.
You may need permission from local jurisdictions depending on the nature of what you build (e.g. money transmitter license, banking license, business license, etc.), but you do not need permission from any Bitcoin organization to build any product or service that uses Bitcoin. You can’t just build an iOS app without Apple’s permission. You can’t just use Amazon’s code and build your own eCommerce store.
Bitcoin is different. Bitcoin is open source and anyone can build on it, or with it.
Neutral money is ethical money. It means nobody can push their own ideas of what’s right and wrong on you. With bitcoin, you don’t need anyone’s permission to acquire, hold, or send bitcoin. Bitcoin doesn’t discriminate. Bitcoin doesn’t care.
You don’t need an ID to use bitcoin. There are no borders in bitcoin. There is no approval process. Bitcoin doesn’t care what you buy. There are no back door deals or private discussions in bitcoin. The only law in bitcoin is written in the code and is open for anyone to plainly view.
5. Bitcoin Makes War More Costly To Governments
The current endless American wars are not financed by taxes. They are financed by inflation. The government borrows money to do “military action” in foreign countries under the guise of spreading democracy (spending billions of dollars to tell people how to live, killing millions of innocent people in the process). Wars like the one in Afghanistan would have potentially ended much earlier if Congress had to get together and raise taxes every year to pay for it.
Instead, the cost of war is hidden in inflation. The government first borrows money, which creates more dollars in the system. Then, the effects of the expansion of the money supply ripple through society as things get more expensive for the average person. The cost of living goes up, and the purchasing power of our savings accounts goes down.
You Can’t Vote For More Bitcoin
The supply of bitcoin cannot be expanded through political means. You can’t “vote” for more bitcoin just because it’s super-duper important this time and you’ll totally be responsible next time around. You don’t get to borrow bitcoin and then replace it with different bitcoin that you printed yourself and is just as good. There will only ever be 21 million bitcoin, and the only way to get some is through voluntary trade or coercion (including taxation, under threat of imprisonment).
Of course, it’s just speculation that living on hard money, bitcoin standard would make the cost of war more untenable for governments. Wars have happened throughout history, regardless of the money used. One could argue that in the past, the main reason for war was actually to plunder gold (hard money), so would anything change at all under a bitcoin standard?
I think many bitcoiners would respond by saying that information-based money changes the logic of violence. You can kill a king and grab his gold, but you can’t just kill someone and grab their bitcoin if it’s properly stored.
Again, pure speculation, but I think these are ideas worth considering.
6. Bitcoin Free Speech In The Digital Landscape
Money is a type of unspoken language. It’s how we communicate our values across time, space, and culture. How I choose to store my money expresses which systems I trust. What I choose to spend my money on expresses where my values lie. Spending money on gardening equipment says something different than spending money on a big screen TV. Money is speech.
Code is also speech. Code is literally protected by free speech laws in the US. Of course, that doesn’t include many other countries around the world. Even many western nations do not have free speech laws. So, let’s just focus on the US here, which is globally known for its expansive free speech protections. Bitcoin is code, and code is free speech.
Why is free speech so important? It allows for the expression of ideas without the threat of violence from the government. It means you have the freedom to express your ideas without worrying about being put in prison for those ideas.
Your Online Speech Is Limited By Terms of Service
Even if you aren’t worried about your government cracking down on your freedom of monetary expression, there’s still the problem of corporate surveillance and discrimination. Currently, to send digital money, you MUST use a third party. There’s literally no way to send “digital dollars” without using an intermediary like PayPal, Venmo, CashApp, or a bank. With the exception of Bitcoin, all digital money requires a corporation to facilitate the transaction.
This means your speech is limited by their terms of service. Every company has the right to stop your transaction or even close your account based on criteria they lay out. Don’t like it? You have other options on the market.
Bitcoin prevents speech discrimination by being a neutral money derived from censorship-resistant code. Bitcoin is ethical because it allows for the most freedom of money expression in a digital world.
Ultimately, I believe bitcoin is ethical because it’s a neutral, censorship-resistant money. In the past, this role was occupied by gold, but in the modern, globalized, digital world, gold is near-impossible to use without centralizing control into the hands of corporations and governments. Bitcoin allows for a truly fair asset on the global, digital landscape. Bitcoin can be traded freely between people in a transparent, permissionless way.
There will always be arguments about ethics, and these problems can be solved with traditional methods of social pressure and law enforcement. I’m not an anarchist. I’m not a sociopath. I’m not making the argument that there shouldn’t be any societal constraints on people. I’m just making the case that those problems need to be solved separately from money. Freedom of money is freedom of speech, and when we start saying who is allowed or not allowed to use money in certain ways, it’s a short hop to saying who is or isn’t allowed to say certain things.