14 - 06/Mar/2021
The importance of electronic cash, aka ecash
Store of value, or medium of exchange?
It's often presented like we have to choose one or the other, like it's an either or, but in reality that's not the case at all.
For the first time in history we can have money that's excellent at being both a store of value and a medium of exchange, even if this is no longer true for Bitcoin.
That ship has sailed for BTC, which is probably why Bitcoiners tell themselves store of value is all that matters. They say who needs electronic cash when we already have digital dollars? Why does anyone need a crypto wallet on their phone when they already have Venmo, Paypal, and Apple Pay?
Unfortunately, the people who think Bitcoin is only supposed to be digital gold have totally missed the plot. The same applies to anyone who thinks it's fine that Bitcoin only be used through custodial solutions like Paypal, Coinbase, and Cash App.
The whitepaper says Bitcoin is:
"A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution."
Satoshi created Bitcoin for us to use it without going through any financial institutions, not just to change which financial institutions we use. The point wasn't to find better custodians for our money, the point was to have the ability to not have any custodians at all.
This is important because so long as our money is under someone else's control, we will remain under their control. In other words, none of us will ever truly be free until we set our money free.
The only problem is the opposite is what's been happening. It's clear that the world is moving increasingly towards becoming a cashless society. And it doesn't even have to be because of some grand conspiracy orchestrated by the state. The fact is that the convenience of using credit cards and Venmo and Apple Pay is making cash obsolete. In fact credit card users are incentivized to use them because unlike using cash they're offered money back on every purchase.
But the more we rely on companies to control our money, the less control we have ourselves. Take what happened to the citizens of Cyprus in 2012 when the government took 6.75% of all the money siting in citizens' savings accounts (or 9.9% for anyone who had more than 100,000 euros).
The point is that taking your money is a lot easier when everyone relies on the same financial institutions to take custody of their funds. Rather than having to knock on every door to try and confiscate your money, the state just calls the banks and have them do it for them.
If you're saying to yourself that may have happened in Cyprus, but I live in the US and that will never happen to me, I have news for you. It's already happening. What do you think is being done to the value of your money when your government prints trillions of dollars out of thin air and gives it away to everyone but you? The methods might be different, but the results are the same.
This is why we need a new electronic cash system that isn't reliant on any states or corporations to function. A new form of money that no longer requires centralized solutions to hold our money for us but makes it easy for us to take custody of that which belongs to us.
I believe none of us will ever truly be free so long as the state controls our money, and even if you do control your Bitcoins, if you can't use it as electronic cash to pay your bills, or buy your coffee, you will always be just another rat in a cage.
That's why we need a form of electronic cash that isn't merely the greatest store of value the world has ever known, but also the greatest medium of exchange. A new kind of money that you control, that no one can take from you so long as they don't have your private keys, and you can use to buy your groceries, or buy an entire company.
So the next time someone asks what's more important, store of value or medium of exchange, know that the right answer is you need both if you want a world where we no longer have to rely on central banks, or credit card companies, or any other financial institutions. You need money that is both if you want a world where we have the opportunity to attain true financial freedom, where we don't have to be afraid of waking up one day to find our money has been taken by the powers that be through no fault of our own.
I support the ecash project because I want to see what this new technology is capable of achieving. How our lives will be changed when we no longer have to ask for permission to use our money, and our money is no longer bound by the technological limitations of the past. I want a world where people use their money to pursue their passions, to build businesses and create jobs rather than merely hodling it until the day they die. I want a world where our money is a tool, a means to an end rather than the end itself. But what I want more than anything, is for the first time in my life, to feel what it means to truly be free and that will only be possible when our money is set free.