The United Nations would have us believe they are making remarkable progress in reducing poverty

I can imagine why you have chosen to read this article; after all, Bitcoin is rarely associated with poverty – given that its earliest investors and enthusiasts have done so well financially. Indeed many wonder how and why Bitcoin can be considered suitable for society when some are already very wealthy thanks to it, while many could be left behind by investing in it later.

Propaganda about Bitcoin being a Ponzi scheme by influential speakers has also nurtured this view among many, particularly those who have yet to exert themselves in learning more about this new technology.

Such reasonable concerns also troubled me when I first learned about Bitcoin. It took some time to comprehend how the infrastructure of the financial system truly worked before I could tackle these issues. If you are a first-time reader, you may want to examine some of my previous newsletters, such as Government and Bitcoin and Bitcoin and Property Rights, to gain a foundation for the subject I will discuss here.

The importance of gold

Before I heard about Bitcoin, I had spent several months learning about gold and why it was considered a form of 'sound money' as it had been used as money for over 3,000 years.

It is difficult to create more gold, which can only be mined and added to the money supply slowly. As such, this scarcity provides an excellent metric when trading goods and services because it means gold doesn't lose its value. People and businesses can store economic energy for future use by holding onto it, as the slow increase in the money supply means that gold retains its value over time.

My initial interest in Bitcoin was sparked by the revelation that, as a software system, it had been programmed to mimic the economic properties of gold.

By replicating the attributes of Gold, I realised that Bitcoin could give us the advantages of its qualities as a form of sound money without the disadvantages of being heavy and therefore needing to be managed and distributed in the form of paper notes by banks.

As a result, the technology of Bitcoin could potentially allow us to return to a time when money operated on a gold standard, such as the late 1800s. A time of tremendous technological change for humanity and prosperity, one discovers when one begins to research the realities of that era.

However, my most pertinent recollection of the 1800s comes mainly from the novels of Charles Dickens, who famously illustrated a time of abject poverty.

Would returning to a 'Gold Standard' again give us the unresolvable problem of poverty? Hadn't the welfare services of the 20th century solved that issue? How would society manage if these services, supplied by the government and our taxes, no longer existed?

I worked as a dentist for twenty years and spent some time working for the National Health Service (NHS) in the UK, caring for people who relied on these services. Hence, consideration of how these people would have fared in the late nineteenth century was a matter that truly troubled me.

However, the scope of this problem is more significant than just the UK and other Western countries, so I decided to probe the issue in further detail.

The United Nations

According to the United Nations, 55 per cent of the world's population (about four billion people) did not benefit from social protection in 2016. Only 22 per cent of unemployed workers were covered by unemployment benefits. These statistics highlight that the UK has a privileged position in this respect, so arguing that society would be worse off without these benefits is a perspective that can only be considered by Western countries with these advantages. The rest of the world is in a very different position.

Digging further, I read more of what the United Nations had to say about poverty and learned they define poverty as those living at or below the ability to spend $1.90 per day. Using this measure, they state that 10 per cent of the world's population lives below this level, and they proudly proclaim that progress has been made in reducing poverty, as this level was 16 per cent in 2010 and 36 per cent in 1990.

Knowing how money works, I was aghast when I read this. Surely the United Nations understands inflation? As currently stated, their method of measuring poverty is absurdly flawed.

Given that the dollar's value was based initially on gold. Suppose we consider their measure of poverty against the value of gold. We find that although the proportion of people living below their stated poverty line of $1.90 per day reduced from 36 per cent in 1990 to 10 per cent in 2022. The purchasing power of that $1.90 has been reduced by 80 per cent. When measured realistically in this way, poverty levels are getting progressively worse, not better.

The United Nations boldly claims that ending poverty is within reach using these statistics. Their new target is to have at most three per cent of the world's population living on just $1.90 a day by 2030. Clearly, a gold price of $9,000 would eliminate world poverty.

In reality, world poverty is increasing significantly if we use a form of sound money as the metric to measure it. In the meantime, the United Nations, with their flawed statistics, continues to 'gaslight' any researcher who continues to rely on their absurd numbers without any comprehension of what they mean.

The United Nations website states that the causes of poverty include unemployment, social exclusion, high vulnerability of certain populations to disasters and diseases and other phenomena which prevent them from being productive. Nowhere do I see any mention of how the little money they have is buying them less and less, ultimately making their situation worse and worse.

The irony continues as one of their solutions for ending world poverty as stated is:

"Innovation and critical thinking are encouraged at all ages to support transformational change in people's lives and communities."

Poverty by measuring median earnings

The UK uses a more nuanced approach to measuring poverty. It sets the current measure of poverty levels at a threshold below 60 per cent of median earnings.

However, these statistics can be skewed by a cohort of individuals earning higher than the given range. Also, a high percentage of low earners can lower the median level, but still, this measurement says little about what these individuals can buy, regardless of their earnings. It also needs to be recognised that not everyone supports their lifestyle solely through income, as indicated in the above chart, by the four hundred thousand people who apparently earn nothing.

The more I investigate, the more convoluted and troublesome the subject becomes.

It is challenging to grasp a subject when data is abundant but needs to make more sense. There is also the potential when using poor data for central authorities to focus on the wrong metric to bring about solutions, causing unforeseen negative ramifications. For example, lulling the world into a false sense of security, convincing it that improvements are continuously being made to reduce poverty, when the reverse is true.

Distorted currencies

In my book, Truth Decay – How Bitcoin Fixes This, I describe how the value of our money is compromised by the amount of global debt now in circulation.

Few know that US debt has increased exponentially since the dollar was separated from the value of gold in 1971.

Numerous mechanisms are used to disguise this in the real world, which has worked for a surprisingly long time. Still, this situation is ultimately unsustainable and is why Western currencies are heading for hyperinflation, which will compound the problem of poverty.

Poverty is the scourge of our age.

While simultaneous attempts are made to obfuscate the improvement in poverty levels, the truth is poverty is with us as much as it always has been, if not more so. Granted, some technological advances have raised the general quality of life, but I wonder how much better these improvements would be if we had held onto our wealth simultaneously.

Humans are incredibly innovative and giving when they feel they can be. Unfortunately, with so many struggling to pay everyday expenses, their ability to be generous has been stolen, harming their relationships and crushing their souls.

The gold standard

Despite the distorted data, the United Nations tells us that at least seven hundred and nineteen million people live below the established poverty lines. So what can we do about it?

Given my initial concerns about a Gold Standard bringing back unmanageable poverty, I researched further into this issue.

Surprisingly and contrary to my concern, it appears there was a steep reduction in poverty among Western nations when they were operating on a Gold Standard until 1910 and then at a slower pace until 1960.

The Center for Global Development has gathered data on percentage poverty rates since the early 1800s and notes the steep decline in poverty among Western nations towards the end of the nineteenth century.

However, it is essential to note that this data was collated using the US dollar to characterise poverty levels. Suppose we use the same data points to demonstrate the value of the US dollar compared to gold. In that case, we achieve the chart below, which instantly illustrates how the data above requires further interpretation.

The chart above suggests that poverty rates gradually flatlined from 1910 to 2000. However, the truth is that poverty levels have dramatically worsened since 1960 if we use the US dollar and its devaluation against gold as the currency with which to measure these changes.

The critical point illustrated by both tables is that poverty levels drastically reduced while the US dollar was stable compared to gold.

Even when poverty is measured as a relative value compared to income, the devaluation of the currency will affect all of the metrics proportionately if it is used as the measuring tool. Also, measuring only income takes no account of those who support their lifestyles solely through the value of their assets (which tend to increase exponentially as a currency devalues). So considering currency devaluation or asset valuations is also necessary for helpful analysis and conclusions on establishing poverty levels and assessing solutions.

So what to make of all of this?

Solving poverty

I don't think it is reasonable to follow any recommendations on reducing poverty based on the flawed data we are currently given.

Solutions, as advocated by the United Nations, such as active engagement in policymaking and making sure that rights are promoted and that voices are heard, fly in the face of the shaky foundation on which our current economy is built.

Once the soundness of our money was tampered with, it was only a matter of time before these problems arose. The tragedy is that excellent progress was being made in eliminating poverty with the sound form of money we had on a gold standard.

Sure, things weren't perfect, but we receive a distorted view if all we rely on is our stories and images from the poverty of times past. Similar, if not worse, reports can also be found and focused on now, but that does not paint an accurate picture when drawing a comparison.

The truth is, under our current monetary system, any actions taken by an individual or a group to eliminate poverty are akin to a hamster on a wheel. Much energy is expended, but no progress is made. As value is constantly stolen from a currency, it doesn't matter how much innovation or talent an individual or a community expends to try and work their way out of the problematic situation; the purchase of their progress is constantly being poached from them.

With a form of sound money, on the other hand, the progress may be slower and more difficult in the beginning if you start with very little, but with dedication and effort, a bit like starting to build a snowman or riding a bicycle on a low gear up a hill. Advancement will seem tricky and slow at first, but because it is possible to make headway, eventually, the goal can be achieved, and growth will become more accessible because it is possible to store the energy gained from the effort in the form of sound money. In the process, all of society benefits as the creative output of the work can be purchased and shared.

History shows that it is possible to reduce poverty, but the correct analysis and tools are needed to make that difference. Gold was flawed as a form of money in the past due to being heavy and difficult to transact with, requiring banks as an intermediary.

However, due to the new features of Bitcoin, its potential usefulness as a form of money allows us to improve on this. As such, it provides an essential tool to achieve the remarkable possibility of reducing poverty drastically.

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.