I've been working on a few short articles that try to tackle some of the really basic assumptions people make about money, sort of like Thomas Paine's arguments challenged assumptions about government in Common Sense. I know most people here are way beyond this sort of content, but I'd love any feedback you have about readability or the argument. The goal is to make a really basic, common sense argument for bitcoin. Thanks for giving it a read!
You probably give your money to a bank. Most people do. If your employer uses Direct Deposit, or if you are a business owner who uses a payment processor, or if you get a check from the government, you don't even get to see your money before the bank takes ownership of it.
It's not like we are under any illusions about who has the power here: your account is always a small portion of their business (things get much worse if you are at a bank where your account is a significant portion of their deposit base). They have your money. If you want it, you have to ask them for it.
If they make a mistake, it's on you to notice it and ask them to rectify it. If they charge you some unexpected fee, you can complain about it, but they've already got your money. It's you asking for it back, not them demanding you pay it. And that's the thing: when arguing with your bank, the starting line is that they already have all your money. It makes it hard for them to lose.
And in any legal battles, let's not pretend it's a fight between equals: the bank always has a bigger legal team. They're probably better connected than you are. The people on their team are getting paid--if things don't work out, they can go find another job. If you lose, your savings are on the line.
All this, and it's not even like they keep our money in a little metal safe-deposit box or something. No, the bank gives your money to other people. This is explicitly the model. In fact, they loan your money out several times over.
They don't just give your money to some guy who's got a hot plan to start a vegan dog-treat food truck, they also give it to his sister who wants to buy a shack in LA, and to his second-cousin who is refinancing the home he and his twelve dogs live in.
You don't even get any say in the terms of these loans using your money. In fact, you'll never know who they are loaning your money to or how much they are making for giving your money away to all these folks at the same time.
So why in the world does anybody give their money to a bank?
Obviously, there are reasons--it's such a bad deal, there have to be reasons. Here they are:
Cash money is hard to keep safe
Who wants to worry about keeping a pile of cash in their home? Sure, you can get a safe, and a gun, but it's easier sleeping at night when it's someone else's liability. It seems likely that burglary might increase if everyone was keeping all their savings in cash in their house. And then there is worry about fire, and hurricanes, and earthquakes, and besides, do you even know if mice eat cash? What if you hide it somewhere and forget where you put all of it? There is no question that it is easier to give your money to a bank to keep than it is to take care of it yourself.
Cash money doesn't earn interest
Another reason you might give your money to a bank is that cash money loses value every year--at least 2% every year, but at times it loses significantly more of its purchasing power than that. When you let someone else loan it out for you, you can make a return that offsets some of this loss, although most normal bank accounts don't pay you hardly any of this return on your money, every little bit counts. You can get a high-interest account and sometimes only lose a little purchasing power to inflation.
Cash money is inconvenient
Finally, and this is actually the most significant reason: cash money is really inconvenient. It's shocking, but there is still no way to actually own a US dollar other than as physical cash. It is simply impossible to use a dollar online without some business or institution facilitating the transaction. You need a bank or a credit card company or a payment processor if you want to interact with the economy online. Dollars don't work on the internet. So, if you want to participate in the economy at all, you have no choice but to give your money to a bank.
Better money
The reason we give our money to a bank is that our money isn't very easy to use. But not all money is so unwieldy. Bitcoin is money that is native the digital world. You can send it to anyone in the world with an internet connection at any time you like, and you don't need a bank or a payment processor to do it for you. Bitcoin moves in the digital economy like a fish in water.
Bitcoin is easier to keep safe, too. Because it is money that lives on the internet, you don't need to put it in a safe, or to worry about fire destroying it or that it will be eaten by mice. There are already lots of tools that help you keep your bitcoin safe without having to expose yourself to the risks of holding your own cash money.
And if you're worried about keeping up with inflation, there will only ever be 21 million bitcoin. Whatever amount you can get your hands on will be the same percentage of the total supply today and tomorrow and next year and the decade after it. The money you save in can keep it's purchasing power as the years go by, and you don't have to go out chasing risky bets just to make sure you're savings don't disappear.
So, the question isn't why do you give your money to a bank, but rather, why do you use money that only works when you give it to a bank? Why do you use a money that is more suited to the 19th century than the 21st? We stopped using whale-oil lamps and washboards and horse-drawn carriages, so what's stopping you from using a new technology with your money?