The Fiat Wears No Clothes
Louis Rossmann, a YouTuber with about 1.14 million subscribers, streamed a YouTube video on April 4, 2020, pointing out the serious deficiencies with the $349 Billion Paycheck Protection Program rollout in America. Bank of America, the nation’s largest bank with 57 million customers originally announced that they would only accept applications from customers that have pre-existing loans and accounts with their Bank. Against a backdrop of a brown sofa, a brick wall and boxes of Instant Ramen, Louis Rossman correctly points out:
“Banks are adding prerequisites that were not originally included in the CARES Act.”
As America and the rest of the world grapples with the fallout of COVID-19, the cracks and structural deficiencies in the Fiat-based systems are laid bare. The entire Fiat-based infrastructure has been shaken to its’ core and is unable to withstand the assault of the logical inconsistencies. The failure did not occur all at once. Rather, it was an evolutionary failure that even Satoshi Nakamoto recognized in 2008. He realized that our world was one disaster away from a system-wide failure. Against this horrific backdrop, Satoshi encoded in the first block is Satoshi’s message and warning:
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”
Since this time, the systemic flaws have only increased. As tracked by the “US Debt Clock” website, Crypto’s ratio to the dollar has increased from 9,802 to 84 to $1. In direct response to the COVID-19 Pandemic, the US Federal Reserve slashed rates to zero and issued around $10 trillion worth of purchases. The exact amount is not known because they do not disclose their entire balance sheet. The US legislators issued a $2 Trillion rescue package that covers approximately 8-10 weeks of domestic payroll. They also rushed to cover the uninsured Americans and attempted to backstop the looming medical supply crisis. All these massive moves do little to alter the inertia that has built up over a millennia.
Since the invention of money, there have been those that equate the accumulation of it as a source of power. Against that backdrop, economist from Hesiod through Keynesian have all enforced the main tenant of Economic Scarcity within their design. This reinforces the power aspect of the Fiat currency and requires the unlimited accumulation of it to maintain such power. These theories have the unfortunate consequence of causing unlimited grief and deaths among the global population. As evidenced by a recent Trump statement on March 24, 2020:
“You have suicides over things like this, when you have terrible economies,” the president said, adding that “the cure has been very tough.”
Those that have the largest balances of Fiat-based currencies are faced with the stark choices of either losing all their power or continuing to accumulate their power. They are unable to imagine a different reality. As a stop-gap measure, some former Presidential candidates such as Andrew Yang have suggested a Universal Basic Income measure. Some economists are wary of such an approach as they rightly state that this will do little to solve the problem of reinforced scarcity. The reason being, if the money supply is inflated, the ratio will ultimately remain the same. The resources and power will continue to flow to those that have the most.
When an event such as COVID-19 causes serious cracks and breakdowns in the economy, the economic leaders are completely paralyzed as to how to properly solve the problems. The tools that they have relied upon for everything suddenly do not work. Even giving banks 5% of $350 billion to give the money to small business payroll employees is seemingly not enough.
Mnuchin said on April 2, 2020:
“I’ve told these bankers they should take all their traders and put them in the branches. There’ll never be another opportunity to earn five points on a 90-day fully government-guaranteed loan.”
Small business employees struggling without money for rent, health care and food is just one aspect of the entire global economic meltdown. As the entire world battles each other over masks, ventilators and possible cures, no one is looking forward at the upcoming economic derailment. COVID-19 is just the latest disaster and there are likely several more disasters coming.
There are solutions within the cryptocurrency community that could stave off the worse effects of a global depression. To consider the problem logically, cryptocurrency can be utilized as the backbone of a system to convey information about resources. A layer built on top of cryptocurrency could easily connect people that have resources to people that need resources.
Gitcoin.co is a system that has already been proven to be extremely efficient. Bounties are offered for any coder to complete an assignment. Proven completed assignments are rewarded instantly in the currency of choice. Anyone anywhere can complete the specified assignment and there is no interview process, no middle management, no CEO, no board of directors or any of that. There is only the work and that is it.
An expanded construct could easily handle the global ventilator shortage. There are already three different open-source designs for ventilators. There is already a list of hospitals needing tens of thousands of these devices. Here’s how a Gitcoin-evolved system could handle such a challenge:
- The Medical Institution could post a request for ventilators.
- Funding can be opened to anyone that wants to fund it – like Kickstarter. But with blockchain, anyone can do it and it would be provably fair.
- A portion of the funding goes to the blockchain engineers to design a flow that works. Anyone can post a design to acquire resources and to assemble those resources.
- Only proven designs will be approved by the community at large through voting.
- Anyone can contribute the resources required for the project and be rewarded.
- Completed ventilators that are delivered to the Medical Institution are then issued the rewards for the project.
And, that is it. Just about anything could be built with this model. From food to housing to…just about anything.
Scaling up…anyone could propose a project, such as acquiring resources from the asteroid belt to solving water problems. This would open funding, engineering and work talent from anywhere in the world to anywhere in the world. The rewards can be paid in the currency of choice by using systems such as centralized systems such as Coinbase or decentralized ones such as Jellyswap. Such a system could only be done through blockchain-enabled technology.
As tens of millions of businesses struggle with the new post-COVID-19 reality and billions of people remain unemployed, we should take advantage of this unique opportunity to unite behind a common goal for the future of humankind. Those that seek to divide us do so out of the desire to remain entrenched in the Fiat-based system that has been proven to be flawed and dangerous to the health and welfare of human beings. As they continue to use 1984 as a manual, we should heed the warnings and realize that the future is DAO.