The Bitcoin Newsletter #11 - Self Sovereignty and Liberty in the Digital Age
Welcome to the 11th edition of The Bitcoin Newsletter
Throughout history, the concept of property rights has shaped social structures and economic models. Prevailing economic ideologies often overlook the concept of natural property rights and assume that authorities must grant these rights. This idea is centuries, even millennia, old. One example is mediaeval feudalism, in which people were largely legally and personally dependent on a landowner. Even though we are better off today, property is still primarily seen as something that must be legally defined and assigned.
This perspective is at odds with the Austrian School of Economics, which asserts the intrinsic connection between property rights and human agency. In this edition of The Bitcoin Newsletter, we examine the principles of property rights, explore the significance of Bitcoin's control structure, and discuss how Bitcoin protects individual freedom in the digital age. This is part of an extended article I published on EuropeanBitcoiners.com earlier this week.
You'll also find a few highlights where I share my take on Bitcoin and real estate investing across multiple podcasts and events. Overall I am curious about your perspective on these topics. Feel free to share your thoughts and questions with me via email, twitter or nostr.
Best regards,
Leon
DEEP DIVE
Bitcoin: Self Sovereignty and Liberty in the Digital Age
The Austrian School of Economics, originating in the late 19th century in Vienna, emphasises natural property rights rooted in the essence of human agency. This would consider a person the rightful owner of an object if she has interacted with nature to make it or acquired it from someone else through the most common way to acquire property - through trade (Svanholm, 2023).
Property arises naturally, through labour (transforming matter) and through the peaceful exchange of individuals. It is a foundational concept that enables human action by allowing individuals to satisfy needs and navigate uncertainty.
This results in resources being used most effectively as individuals who own them have a strong interest in doing so. In contrast, the need for a legal definition of property by a central authority such as the state may result in resources being controlled by individuals who do not have a strong interest in using them effectively. This can lead to inefficiencies and abuse, as we can observe worldwide.
When discussing the nature of bitcoin, it's important to address its classification as property. Unlike traditional assets, bitcoin as a digital asset, cannot be classified as property, because digital "property" is a concept that paradoxically excludes itself.
Digital "things” do not exist, they are information. So one can never own the “thing” itself. While one can be in possession of bitcoin and have complete control over it by being in control of the private key or seed that enables the initiation of bitcoin transactions, one can never own bitcoin. Possession is not ownership, and vice-versa.
In political and legal philosophy, a distinction is made between possession (control), which Ludwig von Mises calls "catallactic" or "sociological" "ownership", and ownership, a normative concept, which Mises calls "juristic ownership". One is factual, and one is normative. In addition, the digital nature of Bitcoin complicates the definition of ownership when multiple individuals possess the same seed. In such cases, legal frameworks are required to define ownership, underlining the need for a reassessment of the notion of digital property.
Property is fundamentally a construct of the physical world and cannot be copied digitally. Bitcoin’s significance lies in establishing a paradigm of digital self-sovereignty that does not rely on authorities or legal systems. It centres around cryptographic control. This provides protection against invasions of privacy and ensures the protection of individual freedom. When stored in cold storage (offline), those bitcoin are the holder’s alone and are not at risk of confiscation or inflation by third parties. In addition, little can stop you from selling or taking bitcoin with you.
Bitcoin's portability distinguishes it from physical assets such as gold, real estate or art. While physical assets can be easily confiscated, destroyed, or taxed, Bitcoin's digital nature renders it highly mobile. In times of conflict or flight, bitcoin holders can securely relocate with their wealth by memorising a seed phrase. This portability empowers individuals to preserve their assets independently and escape the vulnerabilities of legal ownership.
Satoshi Nakamoto explaining the power of Bitcoin at $0.07, exactly 13 years ago.
Bitcoin is creating a paradigm of digital self-sovereignty, empowering individuals with full control over their wealth. Its inherent qualities, including portability, absolute scarcity, and cryptographic control, position it as a formidable store of value. It offers a new standard that aligns with the principles of the Austrian School of Economics. As societies navigate an evolving economic landscape, Bitcoin's role in securing wealth and promoting individual freedom becomes increasingly vital.
The ability to store value separate from the physical world is just as important as the separation of money and the state, because it guarantees everyone in the world with internet access the opportunity to build and protect wealth, which is one of the most important foundations for a free and self-determined life.
Bitcoin cannot be created arbitrarily or taken easily by force, but through proof-of-work and cooperation. This establishes the basis for peaceful coexistence and efficient resource allocation between market participants.
You can read a full version of this article on EuropeanBitcoiners.com. READ
I would like to thank Scala for his valuable feedback on the article.
WORTH TO KNOW
Bitcoin strategies for real estate investors article
On July 27th, I published my most personal and comprehensive essay to date, titled "Real Estate Investors Should Consider Strategies for Bitcoin, a Superior Store of Wealth," in Bitcoin Magazine. In the essay, I explain why real estate has become so expensive, why bitcoin as a digital and mobile store of value is superior to real estate in this function, what this means for individual freedom, and why real estate investors need to develop Bitcoin strategies if they want to remain competitive. The article was very well received and was trending on LinkedIn. READ | LESEN
Event Bitcoin Block Plochingen
Earlier this month, I participated in the second installation of Bitcoin Block, a free and open Bitcoin education initiative in Germany. I also attended their launch event in Munich. This 2nd edition took place at the Bitcoin-themed Hotel Princess in Plochingen, Germany, where I gave a talk titled "Is it still worth buying a house?" comparing the store of value function of real estate with that of Bitcoin, as well as an interview with Marc Guilliard, the charismatic owner of the hotel (and Bitcoiner).
The interview with Marc about real estate, Bitcoin, freedom and prosperity will be available on YouTube in the fall. Already now you can find my talk in German via the recorded livestream on YouTube (starts at 3:14:15). WATCH
Bitcoin verstehen Podcast - Die Immobilie 2.0? Mit Leon Wankum
Two weeks ago I was invited on the German podcast "Bitcoin verstehen", a popular Bitcoin podcast for beginners, where I talked at length about the function of real estate in our current economic system and why Bitcoin will take over that function, what this could translate into for the individual and for a society. I had a lot of fun recording this German episode. WATCH | LISTEN
IDEAS OF INTEREST
Selling Does Not Imply Ownership, and Vice-Versa: A Dissection (PFS 2022) LISTEN
If you want to support me. Feel free. You can send me some satoshi/bitcoin.
My lightning address is: law@getalby.com
My bitcoin address is: bc1qyc9q89wjzmvaw729tj3wsrsfhft53mjycrjxdk
Nostr PubKey
npub1v5k43t905yz6lpr4crlgq2d99e7ahsehk27eex9mz7s3rhzvmesqum8rd9
Resources
Carl Menger - Principles of Economics READ
Knut Svanholm - Praxeology: The invisible hand that feeds you READ
Ludwig von Mises - Human Action READ
Robert. C Murphy - Choice (Book) READ
Robert. C Murphy - Choice (Talk) WATCH
Photo Credit: Matrix Reloaded
Disclaimer: the content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Make sure you do your own research before making any investment and be aware of your own risk tolerance. If you like to build on my thoughts, feel free, but please cite me as the source. 2023 - Leon A. Wankum.