That is an opinion editorial by Thomas Turek, a local of the Czech Republic and economics pupil based mostly in Prague. A model of this text was initially revealed on Substack.
Creator’s word: This matter is one that’s near my coronary heart. As a Czech, the harm that socialism inflicted upon our society is one of a big wound spanning generations. Czechoslovakia, from 1948 to 1989, was turned from a thriving democracy within the coronary heart of Europe to a rustic of fear-driven residents and financial stagnation. I hope that this text can enlighten the reader’s data of our historical past in addition to how digitally-distributed ledgers like Bitcoin might act as a protection of particular person privateness and finance.
Nearly 70 years in the past, in 1953, a demonstration against failed monetary policy began in Pilsen, Czechoslovakia, the primary of many which might come to represent Czech resistance to the Communist regime.
Historical past is stuffed with occasions from world wide just like the Pilsen rebellion. If the same scenario had been to happen right this moment, nevertheless, would the end result be the identical? Are we nonetheless as susceptible to dictatorship as we had been 70 years in the past?
With the adoption of the web, a dictatorship’s management of society is probably not as easy because it as soon as was. The twenty first century is the primary time in human historical past when every of us individually possesses a method to defend ourselves in opposition to totalitarianism and turn into the custodians of our personal cash, all in our very personal pockets — with Bitcoin.
Constructing Socialist Finance
When the Communists, below Klement Gottwald and with the help of Joseph Stalin, launched a coup d’etat of the Czechoslovakian government in 1948, an enormous sequence of financial, social and political adjustments took maintain throughout the nation. The democratic traditions of Czech politics and society had been unwound, purges occurred throughout the nation, and a Soviet-style dictatorship was put in.
Residents’ freedom of speech was restricted, media censorship was enacted, financial reforms (such because the forced seizure of property and collectivization of agriculture) was dictated, letter by letter from the occasion.
Inflation climbed to an astonishing 20% by my estimates. Consumer goods, especially food, ran in short supply. As general strikes began to organize across the country, the Communist Celebration of Czechoslovakia didn’t hesitate to proceed. Though denying it formally to the general public, the following step within the harmful creation of its utopia was an entire devaluation of the nationwide foreign money.
The reforms were announced on May 31, 1953 at 10 p.m. — punishing those with savings but also deeply hurting workers. All savings were devalued at a ratio of 50 to one and all salaries at a ratio of five to one. Work quotas for workers increased.
This means that, for example, if I had been a worker at the nearby Skoda plant in Pilsen, with 10,000 Czech crowns (CZK) in savings and a 50 CZK hourly wage, I would have, overnight, seen my savings devalue to only 2% of their original worth (200 CZK), and my wage would have diminished by 80%.
It was a turning point for many, who saw this as the final straw with totalitarianism — the government had instigated total control over their lives and now they rightfully felt that they had been robbed.
Thunder Is Heard In Pilsen
The following morning, on June 1, a massive general strike of 20,000 people was planned. Ironically, these dissidents were not what the party considered bourgeoisie capitalists, but ordinary workers, whom the regime sought to model itself upon.
Protesters began marching towards the city center, and eventually a rebellion began — barricades were built on the streets and symbols of Communism were torn down by workers. Slogans, chants and posters demanded the end to totalitarian single party rule in Czechoslovakia.
The Communist Party leadership was infuriated. It berated these citizens as “agents of imperialism” who had been instigating violence in Pilsen, and it deployed the Czechoslovakian military, the Folks’s Militia and the key police to instantly suppress the rise up. Tanks and troopers rapidly overwhelmed the town — 220 individuals had been injured and 650 arrested.
Elsewhere throughout the nation, staff adopted, an estimated whole of 360,000 staff in
Czechoslovakia would strike in opposition to the regime that week.
What speaks volumes about this story of Pilsen is the reflection it casts on human nature. The staff had their civil liberties taken away, their rights, they labored more durable and obtained much less each day, nevertheless it was when the state infringed upon their core financial freedoms that they rebelled.
So, how might such a disaster be averted sooner or later? How can individuals defend their saved worth in opposition to tyranny in a significant method, if in any method in any respect? Properly, first we have to talk about what worth truly is.
What Actually Is Value?
The textbook definition of value is: “The regard that something is held to deserve; the importance, worth, or usefulness of something.”
However, value is a far more abstract concept than just monetary worth, or usefulness. When we look at the history of value, and how it has been stored, a fascinating tale and evolution of money unfolds, one that ends with what is likely the most sophisticated store of value that mankind has engineered to date: Bitcoin.
When our ancestors 100,000 years ago began making jewelry from shells and stones, it was perhaps the first time that value was being created and stored by us. Jewelry looks nice, you can carry it around with you, it doesn’t break easily or expire, maybe you could even trade it for some food later?
The Egyptians discovered gold around 2450 BC. Gold, in terms of its properties, is really great as a store of value, even better than jewelry, and our ancestors quickly realized this.
I can move gold around with me, I can divide it into smaller pieces, it’s durable, looks nice and, most importantly, it’s scarce — unlike that jewelry I’ve been carrying around, there’s only so much gold on the entire planet. We as a species admire that, and we derive value from scarcity. This is why gold and other metals began to be mass adopted as currency across the world.
But to be honest with you, gold has its problems too. It’s heavy and not too portable, if I have a lot of it, I have to store it somewhere or with someone (where it could be stolen), the government can take it away from me, it’s not that easily divisible, it can be mixed with other metals and diluted, and actually, it’s not that rare: we can mine more here on Earth and there is a ton of it in space.
As humanity digitalizes every aspect of society, money has been no exception. Which is why, when we fast forward about 4,500 years from the first discovery of gold, we reach 2022 — Bitcoin’s 13th year of existence. As a decentralized, censorship resistant, non-custodial, portable, divisible, durable, hard to confiscate and finite form of money, it ticks all of the boxes for a good store of value.
Bitcoin is a relatively new invention. With the first “genesis” block being mined in 2009, widespread public knowledge of what Bitcoin actually is and its real power has not yet occurred. It’s still seen as a speculative asset by many, loved by some and hated by almost every grandfather in America.
I can’t send gold easily to people, but I can send bitcoin at the speed of light at any divisible amount. My gold can be stolen, but my bitcoin is cryptographically secure . The government can confiscate my gold, but it can’t take my bitcoin on the blockchain. Gold has an approximate 1.5% yearly inflation rate, while bitcoin is truly finite, capped at 21,000,000 to be in digital existence. I can cross international borders with millions of dollars’ worth of bitcoin in my pocket without anyone batting an eye — try doing that with millions of dollars’ worth of gold bars, the TSA probably won’t be too happy.
Perhaps more important are the applications that can be run on top of blockchains like Bitcoin’s — does gold allow you to borrow and lend it within seconds internationally? Or create groups of people who can work together in decentralized governance structures? I don’t think so.
If, for some reason in the future, I need to send monetary value to Elon Musk on Mars (if he gets there, I’m rooting for you, Elon!) I can’t do so with gold. Martians might not find value in U.S. dollars or euros, but bitcoin is bitcoin, and we have yet to realize it but this is a really powerful piece of technology when compared to past historical assets that we have stored value with as a species.
Bitcoin In 1953?
Economics and politics are intertwined.
Communism, for example, is as much of an economic theory as it is a political ideology. The same is true for free societies — without free money there cannot be a free society.
Freedom, as an abstract concept, is often described in the individual’s rights to speech, movement or a fair trial, and while these social and political components of freedom are widely understood and important, what is not is the component of free money.
Historically, we have observed a pattern of totalitarian dictatorships controlling currency, just as much as other components of freedom, like in Czechoslovakia. The digital age has made this all the more complicated. In our century we stand at a crossroads: use the digital information age to reinforce freedom or to reinforce totalitarianism. Engineer and innovate our way into greater freedom, or into digital surveillance and slavery, repeating the mistakes of the last century.
With the internet, free social media has defended citizens’ speech against dictatorship, like in Hong Kong. It is free money, like bitcoin, that will ensure that totalitarianism’s control over currency is never allowed to happen again. Which is why regimes like China are so keen on banning it and controlling it, but they can’t, no matter how hard they seem to try.
As the world moves to a more decentralized political and economic system, every individual for the first time in history has a cryptographic shield to protect themselves against totalitarianism. A bank in their very own pocket.
We take democracy and freedom for granted in the West, but billions globally reside their lives in dictatorship each day. More than one billion don’t have access to banking or reliable financial infrastructure. Billions extra shall be victims sooner or later, and they’re arrange for failure. Bitcoin is an financial and digital answer.
Had Bitcoin existed in Pilsen in 1953, a whole nation’s financial savings and wages might have been shielded from the fingers of totalitarianism. So is the ability of laptop science and economics when mixed. Residents of the regime would have had a passive method to withstand and defend themselves in opposition to the failures of socialist finance.
As loud as they’d chanted, as excessive as they’d constructed their barricades within the streets, as onerous as they fought the military, nothing would have been more practical than to bypass socialism totally. How? By way of economics, by means of freedom and thru Bitcoin. Which is strictly why the dictators of the twenty first century are petrified of it.
This can be a visitor put up by Thomas Turek. Opinions expressed are totally their very own and don’t essentially mirror these of BTC Inc or Bitcoin Journal.
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