- For many, the concept of property is a form for self-definition. I have this; therefore I am this. It’s a logical, albeit shortsighted, fluffing of the ego — we are simultaneously more and less than what we possess (That is a discussion for another time).
- For others, property is about the exertion of force, leading to the perception of control over a scarce or attractive resource.
- For some, property is the primitive presentation of social status.
With the aforementioned acknowledged, I (Jesse Fastenberg) have my own definition of property, which can best be summarized in the following sentence:
The ownership of Property is the asymptotic degree of difficulty that one actor needs to separate possession from another actor.
When questioning fiat currency, a deeper understanding of the history and opaque machinations undergirding our existing monetary system leads one to the realization that a deposit held by a commercial bank merely acts as a sophisticated form of an IOU. Currency is issued by a Central Bank, and controlled by the state through the manipulation of interest rates and taxation. Sending someone $1,000,000 can be achieved through a few manipulations of centralized code. It is efficient, yet fundamentally unsound and reliant upon trust in external actors for enforcement of agreed upon value. Returning to our buried treasure hypothetical: are you, the burier of the treasure, still in possession of your money held on the bank’s property? As a matter of fact, you the depositor are not technically in possession of your money once it has been deposited in a bank, all you have is a claim on that bank for the amount of your deposit, as the money itself has become property of the bank for that institution to lend out to others as they see fit. In other words, bank deposits are debt obligations owed to you, akin to the purchase of a bond.
This thought continued to grow within the garden of my mind for a number of my formative years. It existed purely as something abstract and intangible until I started to expand my ability to express myself more succinctly. The implied heuristics of such thought exploded in my mind’s eye when I discovered the concept of Bitcoin in 2011. At the time, I was an avid online gamer during the inception of the Pay2Play model of subscription services. Video games such as World of Warcraft had robust virtual economies based upon the intrinsic value of in-game commodities. Gold, in World of Warcraft, could be earned through grinding through repetitive tasks. Five hours of real-life, spent clicking away doing menial in-game work, was worth “gold”. Gold was spent on upgrading your power, and thus a robust billion-dollar economy was born where in-game gold had real-world value.
I started selling this “digital gold” illegally towards the end of my tenure playing the game around 2010, cementing in my mind the concept that bits of data could have fundamental value based on demand, and backed by nothing other than utility. I would later realize that this in-game currency was not, in terms of the aforementioned nature, all that different from traditional currency. Both are nothing more than entries in a database, with their value determined solely by their ability to allow the holder to exchange them for something that had actual, intrinsic value. The main difference between the two appeared to be that the demand supporting the value of World of Warcraft gold emerged organically, while the demand for fiat currency has always been supported by the state’s declaration of said currency as legal tender, and the use of taxation to create perpetual, albeit artificial, demand for its own currency.
It was perhaps a mixture of fortuitous timing and my trite adolescent ethos that turned my basic seedlings of libertarian economic policy and observation of digital assets in video games, into an understanding of the opportunity presented by the cryptocurrency revolution. My initial fascination with Bitcoin grew into a deeper understanding of the protocol, both on a technical and economic level. This understanding would eventually lead me to my current position as the owner of a mining facility, one that operates at a scale larger than 99% of hobbyist miners today.
