Bitcoin is bringing financial education back to the forefront of people's thoughts in a world that has lost interest in it.
This opinion editorial is by Pierre Corbin. He was the director and producer of "The Great Reset and The Rise of Bitcoin".
William N. Goetzmann, author of the book, explains that there were periods in history when people had more financial education than today's general population. This was especially true during the great period of Ancient Greece, especially in Athens.
400 BCE, Athens was a special place. It is also where democracy was born. However, their democracy was very different from modern democracy. Particularly when it came to citizen participation in government's day-to-day activities. Athens had established a complex system with bankers and insurance companies to facilitate grain trade and increase investor security. Many ships were lost in the Aegan Sea during this time. These financial instruments enabled them to protect their investment and share the risks of the industry through insurance.
These topics often led to disputes that had to be resolved in court. This particular issue was accommodated in Athens' court system. It was also used for all other topics. Goetzmann explains the workings of their court system in his book 1.
- Each trial had 500 jurors, who were randomly selected from the community.
- The trial lasted for one day, and the matter was resolved at the end.
- The jury did not meet together to deliberate, but they voted.
- Both the plaintiff and defendant represented themselves. However, they were sometimes assisted by well-known orators to write their speeches.
Athens had around 30,000 male citizens who were eligible to vote at the assembly. There were also 70,000 women, children, and other citizens who were not permitted to vote. The city also had 150,000 slaves and aliens who lived within its walls, but they were not included in the count of citizens and were not allowed to take part in the city's decisions. Thus 500 people were involved in each trial. This represented 1.6%.
This is how it would look in the modern world. Each jury would need to have 5.3 million Americans. 22 million Chinese citizens could be involved. Although it sounds impossible, we have one technology that wasn't available in Athens and could make the process easier: the internet. Perhaps this type of jury could be re-adapted to today's needs. Because 1.6% of random individuals can be considered large enough to represent the entire society in a given trial, the outcome of trials would not be the subject of such debate. It not only ensures fair trials, but also makes it easier to see the whole picture and reduces the influence of those who are involved in important trials.
The average Athenian went through multiple trials during his lifetime. These included complex ones that dealt with topics like finance, risk, compounding, long-term investment, compounding, and others. We still have records from such trials today. Demosthenes is an example of such a case. He was too young to have his father's inheritance taken by his uncles. He took his uncles to court as an adult. Here's a sample of his account of the situation.
My father, men on the jury, left two factories. Both were large businesses. The other was a sword-manufactory that employed thirty-two or three hundred slaves. Most of them were worth five to six minae each, and none less than three. My father earned thirty minae per year from these. One was a sofa-manufactory that employed twenty slaves. It was given to my father as security against a forty-minae debt. They brought him a clear income of 12 minae. He left as much money as he could borrow at the rate of one drachma per month. The interest on this loan was more than seven years. Now, add the interest over ten years at a single drachma and you'll see that the total principal and interest amount to eight talents and four million drachmae. 1
What percentage of modern citizens would be able follow such an argument? It refers to two businesses: loans and interest rates, as well as their compounding effects. Most people don't know what compound interest is. It is one of the most basic concepts in finance and long-term thinking.
The financial system is complex and multilayered. Personal finance is also a complicated topic. This is what I believe has happened over time to the industry because of two reasons.
- If people believe that it is complex, they will hire professionals who can manage and custodian their money.
- The government can make it appear that they have complete control over our financial system and force citizens to rely upon their expertise. This could lower their personal engagement.
People are beginning to see the effects inflation has on their lives. Although they don't always understand the source of inflation, they do know that they must make changes to their finances in order to avoid losing their savings. This inflationary mindset has been around for a long time. This is why so many people are now investing in real estate. It has also pushed up the prices. It is pushing people to make even more risky investments today. This is why cryptocurrency has experienced such a boom. It seems attractive to many because it offers high rewards but also high risks.
At some point, people who enter the cryptocurrency space will begin to distinguish between bitcoin and other altcoins. This is often due to a shitcoin losing 99 percent of its value or hackers causing them to lose their funds. This topic will be the subject of a follow-up article: Bitcoin is not cryptocurrency.
People can achieve financial independence because of how Bitcoin works. Your assets are yours alone. No one can take them away from you unless they give you access. This can be very empowering but also scary as it opens users up to greater risk. People must take full responsibility for their financial decisions. Everyone makes their own decisions. To avoid making mistakes, it is important to be educated.
This education begins with understanding bitcoin wallets and quickly moves to more complicated topics.
- What is the Bitcoin blockchain?
- What is the secret to it?
- What is money?
- What does store value actually mean?
- What is modern monetary theory?
- What is quantitative easing?
- Who is in control of the system and who benefits?
Many more, one by one, open up your mind to how our financial system works. These points can be understood by many of the great thinkers and contributors to the space.
Now, people are forced to manage their finances and take full responsibility. Slowly, the veil that was once placed on finance is being lifted. What used to be complex topics are now commonplace topics. Because of decades of abuse of customers, bailouts, and other factors, the trust we once had in central financial institutions has been lost.
The Athenian system could not scale up with the increasing population of cities and countries. Given our current technology, is it so difficult to imagine a similar system? Bitcoin could be the asset that points the way in this direction. This is due to its cryptographic capabilities, but also because of its passive properties. Users need to learn, which can only benefit them as well as society.
Sources:
- William N Goetzmann
Pierre Corbin contributed this guest post. These opinions are not necessarily those of Bitcoin Magazine or BTC Inc.
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By: Pierre Corbin
Title: How Bitcoin Educates The World About Finance
Sourced From: bitcoinmagazine.com/culture/how-bitcoin-educates-about-finance
Published Date: Wed, 07 Sep 2022 00:00:00 GMT
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