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The rich aren’t the problem. Thieves are.

Let’s talk for a moment about what wealth actually is.

If I have a dollar (that I didn’t steal) then it means that I have provided a dollar’s worth of value into the economy. In return, I was given a dollar to redeem that value I added at a letter date.

If I spend a dollar, then I am extracting a dollar’s worth of value out of the economy.

If I have enormous wealth, then I have done the economy a great service by providing tons of value and taking very little, comparatively.

By taxing the rich, there is a perverse incentive for entrepreneurs to provide value to the economy.

There are many many ways to legally steal money from other people today (taxes are just one example). Therefore, not every rich person has provided value to society proportional to his wealth.

I’m arguing that instead of attacking rich people, we instead attack the methods and loopholes that thieves use to become rich.

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Sapiens: The Protocol Animal

A protocol is a system of rules. And, boy, do we as a species seem to love rules. Our religions are protocols for how to think and behave, our languages are protocols for transferring ideas. Protocols have allowed our species to scale beyond fragmented tribes no larger than Dunbar’s Number to nation states and a global economy.

Our society today has been built by protocols, so much so that we spend the first 10 years of life learning the alphabet, how to spell, vocabulary, how to write, and so on. We must learn these basic protocols to function in our protocol-driven society.

We often think of money as a measure of value. But a standard measurement like centimeters is just another protocol: a rule that everyone agrees on. Just like language allowed sapiens to scale their tribe to conquer continents, money also played its part. Like language, money gives everyone a common ground: it is a commodity that everyone wants.

It’s not intuitive to separate “price” from “money”. After all, a higher price means more money. But “pure” price is a separate protocol formed when money exists in a free market. Time for an example:

I want to add a second deck to my house. I’m going to need wood. Normally, this isn’t a problem, I’ve budgeted the cost and saved the money to buy enough wood. However, a huge hurricane devastated North Carolina and now thousands of people also need wood. Not to add a second deck, but to fix the hole in their roof.

There is more demand for wood, so the price for wood goes up. Suddenly, my second deck is unaffordable. I guess, I’ll just wait until the price goes back down.

Resources are finite. Therefore, there is a cost to produce a resource. Price, in its purest form, will measure that cost exactly.

I didn’t have to negotiate my use of resources with the hurricane victims, I didn’t even have to know that there even was a hurricane. The price protocol communicated to everyone that wood is in short supply.

The beauty of protocols is that they stack and evolve.

Protocols are like onions — they have layers. From language we get songs and writing, from money we get price and investments.

We know that languages evolve. Just read some Shakespeare, then open Twitter and see the difference a few hundred years can make. The medium that protocols operate in also changes. Language existed only as spoken word for thousands of years. Then language started to be written down. Then it printed in books and widely distributed so as to influence culture.

“Protocol” is often used in the context of computers. This is because computers are protocol machines. The birth of The Information Age was when we created two machines that shared a common protocol. Now, we are discovering clever ways to represent our human protocols in the digital realm.

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Linux and Bitcoin

The open source OS, Linux turned 27 just 2 days ago and today its involved in nearly everone’s computer experience.

The open source sound money, Bitcoin is just 10 years old. Imagine where it will be in another 17. I’m betting it’ll be the settlement layer behind nearly every transaction. But even if I’m wrong, Bitcoin today gives me a safe place to store my wealth.

Just like Linux was seen by it’s early adopters as a safe haven from corperate restrictions, BTC today is a safe haven from government restrictions, and restricted economies.