Why Bitcoin Is Generational Wealth
The short film “Bitcoin Is Generational Wealth” by Matt Hornick and Tomer Strolight premiered on November 1, 2021, to shed light on the true value proposition of Bitcoin. While many projects in the world today seek to enrich their founding members and provide palpable profits in U.S. dollars for anyone who joins, the world’s most secure and robust monetary network aims to propel humanity forward based on the fundamental rights to property and freedom.
As people around the world watched the film, many different reactions emerged. Bitcoiners, aware of the goal for which Bitcoin was brought to the world in 2009 as a direct response to the bailouts of central banks to financial institutions the year before, got emotive when seeing the future reality that proper sound money could enable.
“The film stirred many emotions within the community, Twitter exploded with feedback and people sharing that they had been moved to tears,” Daniel Prince, host of the “Once BITten” podcast, said. “Hope was the main emotion shared in our home, a feeling so devoid in that place we call “normie” land.”
Driven by the desire to change the world, Bitcoin evangelists already preach that hopeful reality today; however, skeptics often fall for fallacious narratives instead and dismiss the nascent monetary network for some characteristics inherent to its early monetization stage.
“Few understand the gravity of Bitcoin and the problems that it solves,” Christian Keroles, managing director at Bitcoin Magazine, commented after watching the film.
Robert Breedlove, host of the “What is Money?” show, echoed Keroles’ comments by remarking that the film posed “a trenchant critique on the prevailing fiat currency paradigm and a hopeful look into a more harmonious future for humanity through the monetization of Bitcoin.”
In contrast, people who don’t understand the Bitcoin revolution, and thus don’t hold any bitcoin, experienced a mix of awe and confusion as the film progressed to show what the 22nd century could look like if humanity adopted bitcoin as its money. An extensive gap between the reality of the here and now and that of the depicted future led many to wonder how Bitcoin could bridge that difference.
“Bitcoin is Generational Wealth” portrays different epochs of humanity, starting from the war and hunger dominant in 1948, just a few years after the end of World War II, when a significant portion of human society had endured lengthy conflict and extensive loss. People then had to rebuild everything from scratch while passing warnings to future generations of what tyrants and the fall of individual rights could lead to. However, they didn’t have the means to defend themselves from similar occurrences in the future –– they could only hope such chaos wouldn’t be repeated.
Fast-forward 50 years to 2008, and society had reconstructed itself. Information flowed globally, and trading networks evolved to encompass nearly every edge of the planet while entrepreneurship flourished. However, the subprime mortgage crisis ensued, wreaking havoc on businesses across the U.S. and leaving millions of people without a job. However, the Federal Reserve Board rescued the most prominent players, bailing them out with soft money freshly printed through cheap debt. The principle of fairness had been thrown out of the window, and amid chaos, Bitcoin was born while the system got addicted to easy wealth.
At a time of unequal treatment by the government and its monetary policies, Bitcoin promised the establishment of an incorruptible financial system in which users wouldn’t be favored or discriminated against based on their credentials, status, power, or wealth. All participants are equal in the Bitcoin network, and anyone who participates can store or transfer value without needing permission. Compared to the then 37-year-old petrodollar system, which firmly applied double standards based on a political agenda and still does, the new system envisioned by Bitcoin challenged many established beliefs.
The film moves to 2021, the year this article is being written, a time that proved Bitcoin’s value proposition to be even more relevant. Mandates and decrees enforced by authorities suppressed the freedom of many, leading to fear, hysteria, and division. A war over property and money began, and soft fiat currencies started to debase quickly. Society divided between those who believed in easy rewards and those who fought for freedom and honest work. The former proved very seductive, and leaders enacted laws to increase the money printing and make empty promises that things would get better if people complied.
Despite the barriers, Bitcoin began to flourish even more as El Salvador became the first country in the world to make BTC a legal tender. The antifragility of Bitcoin would be demonstrated through the protection of wealth, property, and freedom.
The shift Bitcoin enables society to make, and the point nocoiners don’t yet grasp relates to incentives. The fiat system is based on the premise that high time preference decisions are conducive to economic growth. As people spend more, the economy grows further, and more money is created, and more money is needed in the now-more-productive economy.
Bitcoin challenges that status quo by reintroducing the values of hard, honest work and corresponding rewards. The analogy made from the network’s consensus protocol, proof-of-work (PoW), is that participants are incentivized to behave honestly through economic incentives and game theory dynamics. By standing by honest work, compensation follows, and every participant benefits. This dynamic isn’t valid with the current fiat system because the closer one is to the money printer, the more they benefit. Therefore, rewards are based on each participant’s status and position in the system, rather than their proven work.
Furthermore, by reestablishing incentives, Bitcoin allows people to save and invest for the future –– a stance that contrasts the “spend” mentality that reigns in the fiat currency system. Bitcoin is generational wealth because it allows individuals, families, companies, and governments to have a low-time preference and to think long term, resting assured that their money will preserve their purchasing power and enable more significant, multigenerational investments to be made.
Time preference is central because it underpins all decisions in society –– from choosing what you want to eat for breakfast to the more complex investment in a new house. With distorted incentives, society fluctuates without constancy, forever seeking out the most gratifying purchase now instead of focusing on the long term. Many of the changes this simple shift would enable are depicted in the film, including agriculture, food, enterprises, education, and basic needs such as water, bureaucracy, and energy.
A prosperous society focuses on the small actions that can be done now to bring about a better future instead of focusing on what they can do now for instant gratification. Since most of a society’s decisions are based on monetary trade-offs, money is central to establishing the proper incentives, and people act accordingly. By restoring sound money and ending the addictive, easy money culture, Bitcoin enables humanity to march together to achieve a second renaissance and achieve hope, productivity, creativity, and optimism.
“The world is building wealth that is no longer measured in the quantity of currency, since the amount of currency is hardly changing. What has wealth become? It is now the sustainable, expanding, uncorrupted productivity of all humanity, enjoyed by all. It is measured in the quality of life of all mankind,” Strolight narrated in the film.
Ultimately, by restoring proper incentives and freeing society from worrying about outperforming the inflation rate through paper investments, that’s what Bitcoin enables.
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