An Analogous Framework: The Gutenberg Printing Press
Gutenberg’s invention of the printing press was on the leading edge of technology—think the ChatGPT of the 1400s. It is often touted how the printing press greatly enabled and advanced the Protestant Reformation, as by it Luther and other reformers were able to spread their ideas more readily.
Truly, this invention did play a pivotal role, but not necessarily for this reason. After all, Gutenberg was a devoted Catholic who first used the movable-type printing press to publish indulgences long before the Bible. Moreover, the Catholic church leveraged the printing press for Anti-Reformation texts and had more resources to proliferate these materials.
The more subtle-but-profound reason this technology dramatically enabled the Protestant Reformation to have its vast impact was that the common man could read the Word of God without a designated middleman—this seemingly subtle change opened the door for a profound and empowering cultural shift.
With the option to read Scripture for oneself in one’s native language, an alternative to hearing God’s truth from the hierarchy of the Catholic Church was born, bringing a contrast to see the existing system more clearly. Before the new option, the various coercive and subtle abuses of power that crept into the Roman Catholic Church were generally tolerated, as there was little practical light to provide contrast to highlight the ways the Church had run off course from God’s design.
It is only retroactive speculation whether the Reformation could have happened without the printing press or whether it was inevitable once the printing press was invented. However, it is clear that courageous and principled Christians did leverage the technology and its logical cultural implications to highlight injustices and spread the gospel, centered on Christ alone (see the Five Solas of the Reformation).
Certainly, this did not fix church governance issues once and for all. However, this technology significantly empowered individuals to discover the truth of Scripture and stand on its authority to spark a movement, which broadly speaking, led to a proliferation of gospel-focused protestant churches along with significant reform in the Catholic Church itself.
Principled, God-fearing individuals, enabled by key technologies, can be catalysts for cultivating God’s order and goodness in the world.
Bitcoin: A Tale of Two Monetary Systems
Bitcoin is a profound technology in this era; one that if deliberately embraced by principled humans, has the potential to empower individuals against monetary manipulation and preserve human dignity in an age of big governments, big data, and AI.
Emerging naturally from the free market, Bitcoin is the first and remains the only substantive cryptocurrency that foreseeably will deliver on two fundamental elements of good money (explore other resources on how Bitcoin’s technology and network make these possible):
- Individuals can verify, possess, and transfer it freely as a “bearer asset.”
- No person or group of people can expand the supply beyond a predetermined amount, as the ability to print money is constrained by real energy, and ultimately, time itself.
The analogy to the printing press becomes relevant as the alternative system creates a contrast to see the existing system more clearly. Presumably, the vast majority has never given serious thought to what money is or how our financial system works—thus, certain assumptions are adopted without any realization they were made in the first place. This was certainly true for me, even as a finance and accounting professional.
Now people have the option to freely—without force or coercion—use a form of money that provides these two assurances that can be fully audited by any user every ten minutes on a cheap laptop.
Contrast this to our existing system by comparing the two fundamental elements noted above:
1) Bearer Asset Comparison: In the current system, the vast majority of US dollars are not “bearer assets,” meaning that instead of people physically possessing their money and having the ability to trade it with their sole authority, it is held in federally regulated banks that have visibility to see every transaction and could freeze your account and limit your ability to transact or withdraw cash.
There are some upsides to letting trusted institutions hold large sums of money (especially if the alternative is holding paper cash). However, since the US entered a new era of banking in 1913, with the creation of a centralized government bank, which then ended the ability for citizens to convert dollars to gold in 1933, it is important to recognize that nearly all of the power to monitor and control transactions—as well as to strongly incentivize where these banks invest people’s money—is held by the government.
As a result, almost every bank is incredibly indebted, since they tend to hold less than 10% of the money people entrusted to them, using most of it to buy government bonds and investment loans. There are no alternative banking options that offer to fully back people’s deposits rather than lend them out or invest the funds in a materially different strategy, as regulations disincentivize this (e.g. in 2020 the reserve ratio was set to 0%) and federal agencies have rejected institutions from providing fully-backed banking models.2
Without the ability to easily and securely hold physical money as savings, individuals give banks the majority of their (the bank’s) money. The banks are currently federally regulated and have more incentive to serve the regulators rather than their depositors since leaving a free-banking standard.
2) Money Supply Comparison: Unlike Bitcoin’s known monetary supply, the federal government has a large degree of influence, changing the monetary supply and borrowing rates on a whim, hurting people’s ability to wisely plan and make cooperative decisions for the future.
The federal government can, and does, print more dollars to finance a large degree of spending not afforded by taxation alone. This ability to spend dollars created out of thin air allows the government to spend on real goods and services even beyond what it collects in taxes.
However, since it is clear that no real value is created by simply printing dollars, who is bearing the cost? Primarily, those who earn and save in US Dollars or live in countries whose currency is backed by the US Dollar collectively fund this spending as the value of their earnings and savings becomes eroded while the supply of Dollars expands. Without any natural constraint (like a gold standard) on this powerful privilege, government spending has wildly expanded along with the supply of US Dollars increasing by 500% in the last thirty years with a 40% increase in the supply within two years COVID-19 outbreak.3
Considering just these two points, modern government money fails to provide strong property rights. For billions of people, their money is held in government proxies (regulated banks) under the authority of a handful of people. Even if funds are held in physical cash, the value can be debased at an alarming pace, as seen by the rapid expansion in the money supply in the last thirty years alone.
The existing financial system empowers a large, centralized government to exist and spend beyond the value it provides or would be naturally determined by a free market (one in which governments do not control the money system). Controlling the money conveniently bypasses the natural free-market and political constraint of raising citizens’ taxes—while subversively devaluing the citizens’ currency.
Without this constraint, there is an unfortunate benefit and incentive to centralize governing control without needing to represent or care for the desires of local constituencies. Politicians can still pass spending bills regardless of needing the support from citizens via taxation since they can merely socialize the cost by printing more dollars to accommodate the spending. Whereas a free market in money and banking would create the need for governments to listen to and value their people to avoid literal bankruptcy. Naturally, this would shrink the federal government and empower local governments as it would be easier to obtain larger degrees of funding at local and regional government levels that can better serve the specific needs and cultures with a higher degree of accountability.
Again, the analogy to the Reformation is a helpful framework, since it led to a stark decentralizing of church governance as individual congregations and a variety of denominations emerged. This has held widespread, systemic abuse of church authority at bay since a free market of printed text and the Reformation movement emerged. A monetary reformation led by principled individuals and enabled by technology like Bitcoin could lead to similar results in ending systemic financial repression.
The Call for Christians to Engage
What could this all mean for Christians today? Here are two basic reasons why Christians should potentially study Bitcoin and become relevant in the conversations around the financial systems in a digital age:
1) To protect and care for the marginalized and under-represented.
2) To build just, earthly institutions that help orient humanity toward God’s character.
To accommodate unaffordable promises, both debt and currency must expand. These are both problematic and directly juxtapose the two points relevant to Christians as noted above.
Debt: This is a semi-obvious issue, as piling up debt for future generations without any viable plan to pay it back (at least without printing the money) is effectively a modern-day form of selling children into debt slavery. While it sounds extreme, it is widely tolerated due to being an obscure and partial enslavement, growing almost undetected over time. This is much less attention-grabbing than seeing a specific child lose freedom, dignity, and hope overnight. Nevertheless, it is a similar evil and an erosion of human dignity because future generations become captive to paying off the debt and accommodating the values of the lender, as opposed to having a hope to build a future where they can express work toward their individual values.
Proverbs 31:8 (CEB) says, “Speak out on behalf of the voiceless and for the rights of all who are vulnerable.”
Currency Expansion: By no means a new phenomenon in history, time and time again, currency expansion results in benefiting those who control or support the system that can enable the expansion of currency along with those who already have assets or access to buy assets with credit, while simultaneously hurting younger generations, immigrants, working-class, and pretty much anyone marginalized in society.
Easier to see following the rapid expansion of money following the pandemic, those who own assets came out with significantly more wealth as a result of currency expansion, while those who did not already own a house, stocks, etc., are worse off. Their work and creativity in the world are actively devalued. Simultaneously, dreaming for the future becomes all but lost as the reality of starting a family, buying a home, giving money away, or even superficial desires (like owning a sports car) becomes harder to foreseeably obtain. Devaluing work and savings promotes apathy and entitlement while diminishing individual autonomy, creativity, and dignity.
Even the more privileged in the system who have protected their wealth by buying up several homes and or storing all their savings in stocks are still losing a degree of autonomy and stewardship over their resources. As a result of money that loses value combined with strong tax incentives, people funnel their hard-earned savings back into the financial system through their 401(k)s and index funds in their brokerage accounts, not into local community businesses and projects, passions, or values-aligned companies.
Although well-intentioned, and arguably financially sound, most people are readily turning over the resources and influence God gave them to a small group of financial institutions, again, highly regulated by federal agencies. Through the vast majority of investment vehicles, individuals surrender the right to not only direct the investments but also delegate their ownership voting rights to the financial institutions.
One of these institutions has the largest ownership stake in the majority of US public companies. In fact, there are only three institutions that hold a significantly large degree of ownership influence, benefiting greatly from being close to regulators and are closely intertwined with the political system.
With unsound money, it projects injustices throughout the system, largely taking advantage of the marginalized and future generations. It even perverts the incentives so subtly that the best-intentioned Christians predominately surrender the responsibility and stewardship of their assets to large institutions, who sadly (and ironically) have often influenced the government and corporations to enact values that these same believers are otherwise fighting a “culture war” against to help preserve a godly society.
The Bible is certainly not silent on this very issue, with many references to a disdain for “unequal weights” (referring to a way to manipulate commodity and precious metal monetary systems). “The Lord detests differing weights, and dishonest scales do not please him.” (Proverbs 20:23, NIV).
Bitcoin is not the perfect solution and should not be idolized by Christians. It does not solve every sly financial scheme and injustice. However, the technology and network incentives provide a hopeful alternative and opportunity to have stateless, free money even in the digital age. This alternative exposes the shortcomings, systemic injustices, and corruptions that have crept into the financial system, resulting in injustices to the marginalized in society and a diminishing of human dignity at large.
Christians have a distinct opportunity, leveraged by a significant, culturally influential technology, to bring Godly values and light into the darkness in such a foundational aspect of society.
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David McTavish, CPA, works full-time leading a small accounting team for a private equity firm in Denver. He has become especially engaged in learning about economics & monetary systems, striving to integrate Faith into these aspects of learning. David attended Colorado Christian University where he graduated with degrees in Accounting & Business & also met his lovely wife. They enjoy living in Colorado & going on evening walks with their Goldendoodle.