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What is the Crypto Ethos? – NZ Cryptocurrency Guide (2024)

Join me in exploring the Bitcoin / crypto ethos - the fundamental principles, characteristics and guiding beliefs of the Bitcoin revolution, in contrast to the reality of crypto in 2024.

Every day, billions of dollars worth of Bitcoin and crypto are being moved by millions of people across earth – all of who are standing on the shoulders of Satoshi Nakamoto and his revolutionary vision for a decentralized, open-source, permissionless electronic cash.

But why exactly was Bitcoin created, and what are the underlying values and principles that have given life to the cryptocurrency revolution? In this guide, we’ll break down the key concepts and compare Bitcoin’s ethos to the current state of the global crypto movement.

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The Origin of Bitcoin's Creation

In the aftermath of the tumultuous Global Financial Crisis of 2007-2008, a pseudonymous developer going by the alias Satoshi Nakamoto released the Bitcoin whitepaper to the world through a cryptographic mailing list associated the with Cypherpunk movement.

Cypherpunks are individuals who advocate for the use of strong cryptography and privacy-enhancing technologies to promote individual freedoms and protect against government and corporate surveillance.

Cypherpunks emerged in the late 1980's and 1990's, gaining prominence as a loosely organized group of activists, technologists, and hackers who shared a common ethos centered around privacy, security, individual empowerment, and decentralization. They advocate for open-source technology, free expression and information flow, individual autonomy, resistance to surveillance, and cryptography as a tool for empowerment.

The Global Financial Crisis would result in trillions of dollars in losses for average working class citizens, in result of high risk mismanagement within legacy financial institutions.

Notably, the US government intervened by orchestrating mass bailouts for the very banks and institutions that created the conditions for that mess, at the expense of the taxpayer.

At the time of Bitcoin's 2009 release, traditional financial institutions and fractional reserve banking were under heavy public scrutiny and trust in centralized systems were fast eroding. During this fallout, over 50% of all wealth in the US was already owned by the top 1%; individuals were struggling to make ends meat, and the infinite money printers at the (privately owned) US Federal Reserve continued to print enormous amounts of digital money debasing the value of all currency already in existence. In fact, since the US dollar went off the gold standard in 1971, as result of endless money printing, the USD has lost 80% of it's purchasing power. 

In a direct reference to the GFC, on the 4th of January 2009, Satoshi Nakamoto himself inscribed the message “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” into the genesis block, citing a headline from the London Times from only the day before – an article detailing banks that were being bailed out by the British Government. 

Although the mysterious Satoshi never explicitly outlined his motives for creating Bitcoin, (with almost all of his communications being technical in nature), it’s very clear he created Bitcoin not only as a protest to the centralized financial system but also to return control to the people by creating a new system resistant to centralization, corruption and tyranny.

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Understanding Ethos

Now, with all of that said – what does the word ‘ethos’ in relation to Bitcoin even mean?

Ethos is a Greek word which roughly translates to “moral character” – describing the sentiment, guiding beliefs, and moral nature of a person, group, event, or organization. 

In the case of Bitcoin, the ethos is the underlying philosophical and ideological values that underpin the development and use of Bitcoin, including the views and decision making of Bitcoin developers, the Bitcoin users, Satoshi Nakamoto himself and the Bitcoin code. 

In the next section, we’ll break down the moral nature of Bitcoin’s architecture and design. From my own perspective, I find it incredibly interesting how these values are baked into the actual exoskeleton of Bitcoin’s code and superstructure. An understanding of these ideas no doubt stimulates great appreciation for just how revolutionary Bitcoin really is.  

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Bitcoin's Ethos & Principles

At the heart of Bitcoin lies a set of guiding values that form the bedrock of it’s existence. These principles, referred to as it’s ethos, embody the profound set of philosophical and technological capabilities behind Bitcoin and all cryptos that have followed in BTC’s path. 

Decentralized Governance

The fundamental characteristic of the Bitcoin network is that it is decentralized, meaning it relies on a collective decision making process that involves open collaboration, discussion and consensus among it’s community of users, developer, miners and other stakeholders. 

There is no central authority, person, institution or government in control of Bitcoin (BTC). This is highly unique in contrast to centralized financial institutions like central banks, governments and the US federal reserve. On the Bitcoin network, changes to the code are first suggested as a 'Bitcoin Improvement Proposal' (BIP), where community members then discuss and reach collective consensus on whether or not the proposal will enact.

To extract the essence of decentralized governance; Bitcoin’s ethos sees decentralization as a virtue – where transparent governance processes and community involvement is of moral value. Bitcoin’s open-source nature bakes trust and authenticity into it’s structure. 

Anti-Corruption

Bitcoin’s anti-corruption ethos is embedded into it’s core functionality and architecture.

One of the most interesting ways to look at Bitcoin is as if it's global, decentralized fungal mass of mycelium that is interconnected, reacting to it's environment in real time and making decisions independently from it's million of nodes made up of it's miners, users and developers. The Bitcoin blockchain is a living, breathing document, being altered, audited and used by all it's millions of stakeholders all at once, pulling towards many directions and interests; exchanging resources between it's eco-system to ensure it's survival and functionality as a payment system and e-cash. In the spirit of this analogy - Bitcoin is like humanities new anti-body, a natural response system to neutralize corrupt governments, authoritarian regimes and centralized power structures.   

It’s decentralized nature ensures the network can not be undemocratically shutdown, and it’s immutable and transparent ledger ensures all transactions are recorded and are visible to anyone, preventing manipulation and fostering accountability. Bitcoin’s code driven, decentralized governance model and resistance to censorship prevents network capture.

Censorship Resistance

The censorship-resistant nature of Bitcoin is deeply ingrained in it’s blockchain technology.

The Bitcoin blockchain has no comprehension of international boarders, geo-location, or the social-economic status, sex, nationality or characteristics of it's users. It is objectively politically neutral. On top of this, Bitcoin transactions are pseudonymous, so user identities are masked by default, meaning anyone can use a VPN or other privacy measures to ensure they can make payments regardless of how politically exposed they are or whatever country they happened to be born in. The Bitcoin network has never denied a valid Bitcoin transaction.

Because Bitcoin’s blockchain is a mindless, indiscriminate digital ledger, anyone can use the Bitcoin network provided they have access to a device and an internet connection. 

Financial Inclusion

Financial inclusion is at the heart of the Bitcoin blockchain and ethos, allowing users of all kinds to have a level playing field and fair access to the Bitcoin blockchain. There is no premium access for any particular class – everyone is treated equally and with neutrality.

In 2024, there are roughly 1 billion people on Earth who still don't have access to a bank account or remain underbanked. Think of people living in the Sahara, deep Africa, or parts of Asia where infrastructure is low. This means these people cannot transaction online, use e-commerce, use online financial services, or easily send money between countries without using money senders which often charge ridiculous and unethical fees. There are also many countries with track records of shutting down citizen bank accounts for political reasons, such as countries like China, Russia, Turkey, Iran, and sadly even Canada during the 2022 trucker lockdown protests.

Bitcoin, as aforementioned, has no concept of international borders, race, sex, or politics.
The network always runs, transactions are processed, nobody on Earth can be excluded.

Trustless Transactions

As the Bitcoin network is powered by an open source, self-regulating, decentralized blockchain where all wallet and transaction execution is managed in-house; on-chain, there is no requirement to place any trust in third parties or middleman intermediaries. 

In crypto, the phrase 'don't trust, verify', is a common idiom which alludes to Bitcoin's cryptographic system of verification - and how as an individual, you should gain confidence in the network by verifying it's open-source reality, track record and functionality, instead of blindly placing trust in it like we do for mainstream systems.

In Bitcoin, you can verify for yourself that you are using the correct network and that you are sending Bitcoin to the correct wallet address. The open-source, trustless, decentralized system takes care of the transaction without any requirement for third-party validation. 

Permissionless Network

Another beautiful principle of Bitcoin is that you do not have to ask anyone for permission to send or receive payments, to use the blockchain, or to set up a wallet in the first place. You also don’t have to ask permission to propose changes to the Bitcoin network code. 

This key characteristic is in sharp contrast with traditional financial systems that often involve complex onboarding processes and stringent eligibility criteria. In Bitcoin, anyone can create wallets, initiate transactions and engage in network activities without having to gain permission from some intermediary or gatekeeper.

The ethos of this characteristic is rooted in individual empowerment and sovereignty over your own financial activities. It’s about financial freedom, independence and autonomy. 

Open Source Development

Bitcoin’s ethos is deeply rooted in principles of open-source development, transparency, collaboration and genuine inclusivity – a belief that technology should be open to all. 

The Bitcoin codebase is open to the public, allowing anyone to view, contribute, and propose improvements. This open source nature ensures that the protocol's development is a collaborative effort, with a diverse range of developers, researchers, users and enthusiasts working together to enhance its robustness and security.

Bitcoin’s open source nature aligns with it’s decentralized architecture reinforcing the idea that financial technology should be accessible, adaptable and accountable to all those part of the global community, rather than just serving the shareholders and the powerful.

Limited Supply

Central to Bitcoin’s ethos is it’s limited supply, capped at 21 million BTC that will ever exist.

This supply limit is hard-wired into Bitcoin's code, and it will most likely never change. A capped supply of coins in circulation is a stark departure from traditional fiat currencies subject to inflationary pressures caused by unlimited money printing. It could be said that inflation is a secondary tax, or downright theft, depending on who you ask. Like reverse theft where your money's real value is eaten away by the result of a couple thousand elites in control of the printer. It's worth asking yourself, do we as citizens have any say over this process?

Bitcoin's finite supply serves as a safeguard against devaluation, highlighting it's capacity as a store of value and how resilient it is as an alternative to traditional monetary systems. Bitcoin's value is derived from it's scarcity, utility and principles rather than artificial inflation, which has caused many hundreds of fiat currencies to fail.

Bitcoin’s supply cap embodies a commitment to scarcity and sound monetary policy.
Bitcoin’s ethos questions the sustainability and ethics of fiat currencies tied to centralized entities who have the endless ability to create new money used to enrich only themselves. 

Mission Drift and Shitcoins

Since Bitcoin’s release in 2009, more than 30,000+ cryptocurrencies have spawned using blockchain systems stemming back to Bitcoin (BTC) and it’s open source, public code.

It’s no secret that the vast majority, 95% or more, are complete garbage, pump & dumps, shitcoins and beyond. Spiritually disconnected from Bitcoin’s original ethos and intent. 

The crypto market is also largely made up of individuals looking to speculate and make returns on their investments, simply looking at Bitcoin and crypto as an investment vehicle. Though perhaps this was always part of the deal for mass mainstream adoption.

In other countries, such as those living under authoritarian regimes, unbanked areas or where fiat currencies are unstable, there’s millions of people using Bitcoin as their money. At the end of the day, this is all part of the full expression of the crypto revolution, and we’re still in such early days – it will take decades to understand and witness it’s impact.

In my personal opinion, as someone who administrates crypto forums, community groups and meetups across New Zealand – I often find it disappointing how little understanding and regard many regular crypto users have for the actual fundaments and principles. Crypto being simply a higher risk, higher reward stock market. But again, this is nature. 

Bitcoin Maximalism

On the other side of the coin, you have the Bitcoin maximalists – individuals who advocate for the singular importance of Bitcoin and that Bitcoin alone uniquely fulfills the value proposition of digital gold. Maxi’s believe BTC should be the primary focus for investment, adoption, and development efforts. Maxi’s are generally highly critical of any alternative system, asserting that all other cryptos are mission drift diluting the original BTC ethos. 

In my personal view, I agree with much of this sentiment, but I would not consider myself a Bitcoin maximalist. Although Bitcoin is the mothership; the most decentralized, scarce, trusted, well-known, battle tested crypto in existence, there is still innovation, utility and potential in other blockchain systems such as Ethereum (ETH) and Monero (XMR). And if Bitcoin tried to do what these other systems are doing, to become a ‘supreme chain’, BTC itself would face mission drift. The crypto realm is a hot pot of open-source innovation, trial and error, disruption, iteration and value creation – the free market will decide best. 

Does the Ethos Stack up in 2024?

So, with all ethos on the table – what is the state of crypto in 2024, and how does it stack up to the original ethos of Bitcoin, Satoshi Nakamoto and his vision for societal change?

In terms of decentralized governance, this still stands true to this day. There are more contributors, miners, nodes, exchanges and users on Bitcoin than ever before, making up the fiber of Bitcoin’s decentralized governance model and decision making processes.

It should be noted however, there are massive centralized forces within the crypto space, such as the Digital Currency Group who own massive stakes in hundreds of crypto organizations across the world. On the DGC’s front page, they claim to be the ‘investor & operator’ of the crypto industry – showcasing their lack of alignment with Bitcoin’s ethos. 

In terms of anti-corruption and censorship resistance, Bitcoin’s native governance system, immutable transactions, open-source nature, publicly viewable blockchain, permissionless ability to make payments internationally without being censored, and capacity to be used to undermine tyrannical oppression stands true to this very day. 

Bitcoin’s open-source and trustless nature is still baked in to the exoskeleton of it’s code.

In terms of financial-inclusivity and permission-less nature, anyone on earth can still access the Bitcoin blockchain and leverage it’s capabilities for self-sovereign finance, but there has been a slow yet very real encroachment of government regulation and KYC requirements across almost all countries in the developed world. If you are a business or entity wishing or facilitate transactions in Bitcoin and you fall under particular framework, you are legally required to make your users hand over their personal information or they can not use your service. Essentially, here in New Zealand, the government has made it so that if you wish to use NZD to trade crypto through regulated crypto service providers, you can’t do so without handing over your personal information and exposing your identity and financial activities to the watchdogs; 5 Eyes, Police, IRD, Chainalysis – or any other third party that in reality, you have no idea what they’re doing with your own personal data. 

KYC is clearly a very serious overlap of Bitcoin’s ethos surrounding privacy, surveillance, sovereignty, autonomy, data ownership, and Bitcoin’s permissionless nature and ethos.

This is why it is extremely important that peer-to-peer transactions and exchanges live on, such as the New Zealand P2P Crypto Marketplace. It’s also worth asking if it may be if it is required for all centralized entities to ultimately fail to ensure the succession of the Bitcoin as an asset. Without the ethos, everything less than non-KYC is side show of the crypto movement in an effort to reduce it to a degenerate, speculative stock market. When the same people who advocate for KYC are running exchanges marketing ‘financial freedom’, it’s clear there are not in favour of the transformative change Bitcoin was designed for, or they have simply lost scope of the real value crypto seeks to create. 

Perhaps we are destined for a Star Wars like crypto revolution, where the empire has control over most the mainstream, populated star systems, using centralized credits. While in the outer star systems, decentralized crypto blossoms. Where self sovereignty, freedom and autonomy is valued, where centralized and oppressive control is resisted. 

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My Final Views

I hope this guide has provided value in one way or another. Without the crypto ethos and the fundamental principles, this movement is nothing. Hopefully you have a better idea of the value of crypto, why it’s revolutionary, and why the crypto markets are so much more than just a way to invest your money. What Bitcoin is doing is the first of it’s kind in all of human history, we’re living in truly unprecedented times. Bitcoin stands as a beacon of light in a world where social media, communication and information flow is becoming increasingly centralized. I hope the people of the future, if they are reading this in 100 years, can look back and know that we as a specie drew a line in the sand and took control of our own financial destiny, instead of allowing a select few to control the fates of all. 

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Disclaimer: All content in this guide is intended for educational purposes only and should not be interpreted as financial advice. As an individual, you are entirely responsible for how you conduct your investments and manage your cryptocurrency interests. It is exclusively your own responsibility to perform due diligence and Cryptocurrency NZ recommends taking extreme care and caution with crypto and are not responsible for the outcomes, management, or oversight of your activities.