The need for a free money market

The first obvious conclusion is that alternatives are required. People will only be able to choose their preferred money when widely accepted alternatives are available. The phrase ‘competition is good for business’ applies not only to the commercial world, but also to the free market in general, which includes exchange and payment methods. However, not allowing people to choose their preferred money and forcing a specific money system on them is coercion, and hence unethical and immoral, as particularised above.

This is why Satoshi’s goal with Bitcoin is to provide an alternative to the state’s monopoly on currency.

By allowing people to develop their own money systems and freely choose their preferred one, the best money system will win in the long term. And, as long as the money market is free and fair, the money that delivers us humans closest to the aim of less poverty and more wealth for all will win (which will undoubtedly be the hardest form of money). This would then redistribute power back to the people.

The issuing power of currency shall be taken from the banks and restored to the people, to whom it properly belongs.Thomas Jefferson

Brian P. Simpson discusses the benefits of a free monetary and banking system in detail in chapter 5 of his book Money, Banking, and the Business Cycle (Ch.5: The Characteristics and Effects of a Free Market in Money and Banking).

Its main message is well summarised in the abstract of this chapter:

This chapter shows that a free monetary and banking system means absolutely no government interference in money and banking. It discusses what is meant by “no government interference.” Such a system is unprecedented in history, except for possibly the very first banks in ancient Greece or fourteenth-century Italy. From the very beginning, or very shortly thereafter, governments interfered in monetary and banking systems to gain advantage for themselves and those they wanted to favor. This interference existed in the form of minting coins, debasing the currency, allowing banks to suspend payment when payment was contractually required on demand, raiding bank vaults, and so on. A free market in money and banking will lead to a level of stability in the economy that will make the economic system seem boring compared to today, since it will virtually eliminate monetary induced financial crises, recessions, and depressions. Developments in the economy will still be exciting; however, the excitement will be confined to rapid rates of economic progress; innovations in products and methods of production; the development of new technologies; the exploration of space and the colonization of moons, planets and other solar systems by private individuals; and a rapidly rising standard of living.

And, unlike the incumbent monetary system, the standard of living would not rapidly rise for just a few people, but for everyone!

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If you want to learn more, we highly recommend the money and banking works on the Satoshi Nakamoto Institute’s Literature page, particularly What Has Government Done to Our Money? and The Mystery of Banking by Murray N. Rothbard.

Despite all this, some people are concerned that a money system that is not regulated by their government may encourage crime and so result in a greater crime rate. This concern, however, is unfounded for two reasons:

The growth of legitimate cryptocurrency usage is far outpacing the growth of criminal usage. Or to quote from the “_Crypto is Bad for (Bad) Business_” section of the Messari Report for 2022:

The whole “crypto is for criminals” schtick is categorically false - a myth perpetuated only by the ignorant and the willfully misleading. As mentioned earlier, illicit activity comprises just 0.34% of crypto transactions according to Chainalysis, lower than incidence of illicit activity in “regulated” financial services, where banks have been notoriously effective money launderers for cartels and ultra-rich tax evaders.

It is clearly much more difficult to establish a link between the crime rate and the feasibility of crime than it is to establish a link between the crime rate and the policies of the individual government. A study on the relationship between quality of governance and occurrence of crime comes to the following conclusion:
The findings suggest that different indicators of governance are significantly related with different categories of crime such as homicides, robbery, kidnapping and burglaries. Almost all four types of crime are affected equally by the governance indicators. Socioeconomic conditions, corruption, law and order, external conflict, investment profile and ethnic tensions are significantly related with crime. Among all the economic variables, only per capita GDP and income inequality had a significant impact on homicide.
Consequently, combating crime with a centralised monetary system would only address the symptoms and not the underlying cause.

And even if a government-controlled monetary system made it simpler for law enforcement to crack down on criminals, we still believe that defending the following is far more important:

Human and property rights;
developing countries; and
the environment.

Hand grabbing band that has 'Human Rights' written on it

In fact, not those who are opposed to concentration of power (as in the example of central banking) struggle to justify their position, but those who continue to support central banking and power concentration despite being aware of the human rights violations, environmental degradation and tyranny of entire nations that come along with it.

Or as Alex Gladstein puts it:

Maybe you don’t need Bitcoin and maybe you don’t understand Bitcoin and maybe PayPal, Venmo or your bank account serve your needs just fine. But don’t write off Bitcoin as simply a vehicle for financial speculation [or a tool for criminals]. For millions of people around the world it’s an escape hatch from tyranny and nothing less than freedom money.

… and:

If we keep growing this… and if Bitcoin thrives, humans will have a money:
that can’t be censored by authorities;
that can’t be devalued by governments;
that can’t be monopolised by corporations;
that can’t be easily mass surveilled;
that can’t be stopped by borders; and
that can be accessed by anyone.
And that’s why Bitcoin matters for human rights.

Does this settle the question of the raison d’être of cryptocurrencies (or decentralised money systems in general) once and for all?

One thing is for certain: In the coming years, we will be forced to endure the negative impacts of centrally controlled currencies. This will result in a growing need for alternative money systems. It was precisely for this reason, Satoshi created Bitcoin during the last financial crisis.