Hermetica Manifesto: Part 1
The world stands at a critical crossroad. Our financial system is being transformed, all money and all assets are in the process of digitization. The times they are a changin’.
We are being presented with two options:
- A centralized, permissioned system
- A decentralized, permissionless system
Both systems exist today in multiple forms. But only one can properly dominate as the financial system of our future. Only one will be THE global financial system.
The obvious next question is: Which one of the two is more desirable? Which one should we be cheering on to win the battle?
In order to answer this question, we believe a purely economic lens is needed. Simply put, the financial system that has the highest probability of generating the most prosperity for the human race should win out.
With that in mind, it is clear that a decentralized and permissionless system is what we should strive for.
Decentralization makes it less likely that rules will be introduced that benefit the select few over the collective. Or, in other words, a decentralized system is less likely to create economic inefficiencies.
In addition, the permissionless nature of the system allows more people to engage in more economic activity, which increases the total economic output. Giving every human equal and unfettered access to payment rails and financial services will unlock a significant increase in global GDP.
But why haven’t we created a decentralized permissionless system yet if it comes with desirable advantages? The answer is simple: Survival.
All systems are constantly evolving and fighting for survival. For a decentralized financial system, survival relies on remaining uncorrupted; having the smallest attack surface that can be exploited in order to change the rules or co-opt the system away from its intended use.
Our history is ripe with examples of financial systems birthed with moderate decentralization that were corrupted due to small but central flaws. Consider the Gold Standard of our recent past. It began as a decentralized currency but over time fell victim to its weaknesses (namely, the cost of transportation and storage) and it gradually became centralized.
Hence for longevity and survival, our next financial system must be rooted in technology that is nearly incorruptible.
Enter Bitcoin.
With its permissionless design that is run by a highly distributed node network protected by proof of work consensus, the attack surface to change the rules and corrupt the system is nearly non-existent.
This makes Bitcoin the ideal technology to build a decentralized and permissionless financial system for the digital age that will hopefully serve the human race for many centuries to come.
