Should the government regulate Bitcoin or does Bitcoin in fact regulate the government?

It was 2006, and in the process of preparing the dissertation for my MBA, I was interviewing dentists about occasions when they may have ended the professional relationship they had with their clients. I remember one dentist in particular who was rather timid and uncomfortable about being interviewed. Still, he eventually divulged an instance where he considered ending his relationship with a client. But it took some digging.

He told me the story of a patient seeing him for treatment, and on the way out the door, this man took some money lying on the reception desk. The dentist blamed himself for leaving the money available to take. However, he admitted he probably would still provide treatment if the patient returned to see him.

I was astonished by this and spent some time reflecting after the interview. I was puzzled. If the same person had walked off with a car from a car dealership, it is implausible that the car dealership would do business with that person again. So, why was it different with this dentist?

Finally, I realised. As a dentist myself, I am aware we are obliged to operate by the limitations set down by the General Dental Council. A set of rules this dentist took very seriously. A main standard (Standard 1.7) of which states: "You must put patients' interests before your own or those of any colleague, business or organisation."

I pondered this. If, on the one hand, we are taught not to steal, but on the other hand, someone can make a rule implying that someone else can wrong you, but still you must put that person's interests before your own – how do we reconcile that?

Laws and rules have an essential part to play in our society; it is helpful to understand the limits of our behaviour. In general human beings love to be rewarded by being accepted and feeling like they are doing the right thing. In the main, they prefer to avoid punishment for doing something inappropriate.

Suppose we consider rules that have determined pivotal moments of history in the past. The oldest and most well-known are the Ten Commandments. Moses led the Israelites out of slavery. On their journey through the desert, society deteriorated as the Israelites, having known only life as slaves, now felt free to do whatever they wanted. The Israelites needed some structure, so Moses provided the Ten Commandments as guiding principles to promote a way forward.

In the 13th Century, the nobles of England had finally had enough of King John operating on a whim and executing their friends whenever he wanted. So the nobles gathered together and drew up the Magna Carta as a code for how they wanted things to be going forward in future.

We also have the Declaration of Independence. The Americans, unhappy at being ruled by the British, overthrew them in the American Civil War. The population required a new set of rules that would define American culture from that moment forward. A new constitution was drawn up, reflecting this, with principles to draw on should conflicts arise again in the future.

However, the problem with rules is that the longer they exist, the more they multiply and diverge from their original aim. For example, "Love your neighbour as yourself." As proposed by Jesus in the Bible, has now become, "Love your neighbour more than yourself", as shown in the dentist example above.

Multiplying and diverging rules often become more nonsensical and expensive to enforce in a national or global society.

By the beginning of the 20th century, most world leaders, influenced by the British Empire, had evolved an agreement and set of rules whereby currencies reflected a specific value of gold. Gold was inconvenient to move around the world, so the population entrusted banks with storing the gold and issuing certificates of their holdings then exchanged as 'currency'. This arrangement held for a remarkably long time, with the dollar assuring a gold price of roughly twenty dollars for over one hundred years, between 1792 and 1932.

By agreeing to tie their currencies to a specific value of gold, the world's countries prospered as their understanding established trust and promoted trade through an agreement on how their currencies would coordinate with each other.

Unfortunately, as the twentieth century opened, disagreements escalated, and World War I broke out. The ideas behind the war were so contentious; the leaders felt their arguments needed support at all costs.

Going to war is expensive. However, most of the population had, by then, learnt to trust the banks unquestioningly. Their options to choose alternatively had also gradually deteriorated with the establishment of central banks. A key one was the Federal Reserve in America – which finally consolidated many banks under one organisation. The legislation for this finally met the approval of a congress led by Woodrow Wilson in 1913 – curious timing.

To perpetuate the war, the central banks of Europe decided that it was justified to temporarily suspend the relationship of their currencies to gold to keep the war going. By doing this, governments realised additional funds to support the fight. In essence, all that it required was a simple accounting trick to create bonds secured by a promise of the government to allow this to happen. A manoeuvre that was, in truth, the beginning of the end for the gold standard.

As a result, not only did the population of Europe then have to contend with the devastation, death, and destruction resulting from this great war, but they also had to manage the collapse of their currency.

European leaders had essentially bet on who would win the war by suspending the gold standard and gambling that the loser would pay war reparations, allowing them to restore their currencies. Germany lost this bet which eventually led to the hyperinflation of the Weimar Republic.

Worldwide politics in the 1920s, characterised by ongoing discussions and failed attempts to return to the gold standard, continued to flounder. There was much unhappiness at the outcomes of the war towards the working class. The weak and vulnerable were suffering greatly. It was a tricky business because reverting to the gold standard would immediately devalue the assets of the wealthy. Still, in turn, the hesitation was crippling the productivity of companies and their ability to pay fair wages. So a new breed of economists, led by John Maynard Keynes, decided upon another strategy.

If European leaders could use accounting tricks to fund a war, why couldn't they be used to help the weak and suffering? By following through on these arguments, the welfare state was born. In Britain, Keynesianism facilitated the National Health Service and in America – the New Deal, as their respective governments decided to abandon returning to the gold standard in the early 1930s.

So began the national bribery campaign, which is still in play today. Similar to the badly behaved child, pacified by neglectful parents whilst they squander their resources. So a population campaigning for every worthy cause they believe their governments have unlimited resources to fulfil; cannot see the dysfunction behind the scenes allowing their politicians to get away with proverbial murder.

Such politicians are not only the architects of our ever-increasing rules, but they are also the artisans of our now dysfunctional finances.

If one looks around today, it is tough to find someone untouched to some degree by a welfare system, whether it's childcare benefits—services from national health care, occasional unemployment or sickness. The government even now grants loans to businesses to help support them through an unexpected crisis. We have reached a point in society where it is almost impossible to function without the government playing its part. It is hard to believe there was ever a time when such things were incomprehensible.

As more and more people require the services of the welfare state, unlimited money is a requirement to fund it, and managing the exploding behemoth becomes increasingly unwieldy. It has reached a stage where currencies are managed carefully behind the scenes to create the illusion that these services can continue unchanged. But in reality, their funding is now completely divorced from their roots in the real economy.

At the present moment, we see this playing out in the extreme. With the recent pandemic, politicians argued that it was time for extraordinary measures. But the trouble with emergencies, especially if they land on you unexpectedly, is it doesn't allow time for considered action. The misallocation of resources is rife, and ultimately it is hard to hold the government accountable for their mistakes.

At the same time, it gives governments the excuse to continue their nefarious accounting behind the scenes, as has been demonstrated by the researcher Catherine Austin Fitts in the United States.

Catherine began her career in 2000 working for the Department of Housing for the federal government. In fulfilling this role, she discovered the fraud occurring in the department, which led her to further research. In this research, she uncovered $21 trillion missing from the US government accounts. Equivalent to $65,000 per person. Almost as much as the national debt at the time of her study.

Most people continue to assume that governments know what they are doing. Many don't believe themselves capable of comprehending what is genuinely going on, or even if they do, understanding what to do about it. In the meantime, the gap between the rich and the poor and the ongoing gross mismanagement grows ever larger.

The initial idea behind the welfare system is that it would help the vulnerable. In reality, as time goes by and these services crumble under their unprecedented responsibilities, and currencies deteriorate even further. The rich learn how to manage their assets in an environment of burgeoning inflation. Those with no understanding of how the system works get weaker, and as time passes, they forget how the situation came to be in the first place.

In 1971, Richard Nixon pulled the final link to the gold standard when he refused to exchange dollars for gold—citing the need to maintain the dollar's stability and avoid ongoing currency crises.

Despite the promises that managing the economy would prevent boom and bust cycles, these cycles have become ever more significant and more catastrophic, as seen on Black Monday in the 80s, the dot com bubble at the turn of the century and the financial crisis in 2008.

So as we see, the governing bodies we live under are becoming more dysfunctional by the day. It is safe to say, similar to other pivotal points in history; we have reached a time where there is a need for a new set of guidelines.

Although many have heard of Bitcoin as a new form of money, those unfamiliar with the technology may not realise that Bitcoin ultimately establishes a new set of rules.

The intricacies of the technology are beyond the scope of this article. Still, if you are interested, I outline how the system works in my book 'Truth Decay – How Bitcoin Fixes This'. Chapter three discusses the rise of Bitcoin, the story of its creation, and provides details on the technology.

Essentially, the need for multiple actors to keep Bitcoin balanced creates a system of trust. Coordinated and monitored by computer software, it is a system that is almost impossible to corrupt.

With the rules programmed into the software, this technology is the foundation of a new economy.

It would limit funding and spending by tracking transactions and curtailing the money supply as a national currency. It allows for a government to be held more accountable and constrain regulation. Bitcoin would prevent a government from creating currency on-demand in a crisis, encouraging more creative solutions without demanding damage to a population's savings.

It would no longer be possible for a government to irresponsibly throw money at a problem and expect that to be the solution. Including endless wars in effect bullying other people into doing what they want them to do. Those who have the power to create unlimited resources and steal from others are the ultimate tyrants, even if disguised in sheep's clothing, with the promise of a fractured welfare system to the nation's population as a pacifier.

Those conditioned by fifty years working in the current financial industry maintain that government will find a way to stop Bitcoin if it becomes too powerful.

What they fail to realise is that Bitcoin is already too powerful!

If they could have stopped it, they would have by now – they have succeeded with many other attempts at currency creation.

But Bitcoin has a life of its own, like Pandora's box. It has been unleashed on the world and is now unstoppable. They might slow it down, but as the population continues to wake up to how the government needs regulating and how Bitcoin has the power to do this. Bitcoin no longer becomes just money – it is now a political movement.

One that doesn't permit, but now DEMANDS, a new set of rules.

By Dr Victoria Collette Jones MBA BDS https:www.linkedin.comcompanysatoshis-page-ltd

Victoria Collette Jones is a qualified dentist who worked in the dental industry for over twenty years. 

As part of this she has had a range of involvement in different public- and private-sector markets, from small family-owned practices to large corporate chains, from local co-operatives to international institutions. She also spent ten years starting up and building her own dental establishment into a profitable enterprise in the private sector, and successfully sold it in 2017. As a result she has extensive experience in varied business environments. 

Victoria has also earned an MBA from the University of Nottingham, and is interested in the world of commerce and economics, including new payment methods and the ways in which these will influence and profoundly affect our future. 

Her familiarization with Bitcoin came in 2016 when she introduced Bitcoin as a payment method into her own business. Victoria now works as a Bitcoin advocate, supporting individuals and businesses that are similarly interested in adopting Bitcoin as a payment method. You can learn more about her and her work at www.satoshispage.com.