In his latest blog post, “Bitcoin’s model of Capitalism,” Dr. Craig Wright explores a topic that is often discussed in regard to digital currency business endeavors—capitalism.
According to Dr. Wright, many people have the wrong idea when it comes to capitalism.
“Some people think that Bitcoin is a system designed to act outside of state and society,” he said. “Others believe that it is a system designed to control business and to reign power into their particular social agendas. Neither case captures the reasoning behind Bitcoin.”
Bitcoin capitalism vs. flawed capitalism
“Bitcoin is a financial system, and it is designed to return capitalism to the system that individuals such as Adam Smith promoted. Capitalism is a system that allows the free action of the baker or the candle maker or the software developer seeking to trade fairly, without exploitation,” said Dr. Wright.
One reason that Bitcoin facilitates true capitalism is because it is peer-to-peer. This allows the market to truly value the good or service that is at hand since no third-party intermediary is skewing the value of the good or service via their service fee. Subsequently, Dr. Wright went on to explain the shift we have seen in capitalism over the past few decades.
“In the last 30 to 40 years, we have seen a seismic shift in the nature of how corporations are managed. Individuals who seek to exploit by making short-term gains at the expense of the business have become the norm…few seem to understand that a long-term path to profitability and sustainable business practice present something different from an increase in the short-term share price.”
Which reminds me a lot of the Ethereum network. On Ethereum, nearly every project on the platform is interested in making short term gains, especially when it comes to DeFi projects.
there's nothing wrong with making money
the problem is a market problem that makes building short term hype projects more valuable than building long term businesses
— mark (@mwilcox) August 14, 2020
Nearly all of the DeFi projects were created from individuals continuously forking code to make meme coins that rocket in value because they are Ponzi schemes. Regardless, these Ponzi schemes are popular because they net their creators almost guaranteed short-term gains.
However, these meme coins have no real utility, use, or future. In other words, Ethereum and DeFi have no long-term path to profitability because the way Ethereum is managed and marketed does not encourage a productive or progressive capitalist mindset.
Capitalism done right
According to Dr. Wright, when capitalism is done correctly, it
…creates a workplace where people can work as a team, creates an environment that delivers more than a mere job; it can become a calling. It can become something that people will do because they believe in it—and not because they earn a pay cheque.
Capitalism is a topic that is not taken lightly across blockchain communities. Just as often as the word capitalism gets thrown around, you will hear the word communism thrown around. Digital currency communities take each of these words, their meanings, and their mindsets to heart.
To learn more about Dr. Wright’s thoughts on the model of capitalism that Bitcoin creates, allows, and facilitates, you are going to want to read his latest blog post Bitcoin’s Model of Capitalism. On the flipside, to learn more about the model that is in stark contrast to Bitcoin Capitalism—communism—you are going to want to read Dr. Wright’s Techno-Communism and the Desire for Socialism through Code.
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