History does not always repeat itself, but historians’ best trait is trying to foresee the future by looking at the past. People have done great things, sometimes good and sometimes bad, over hundreds of years. By looking at these, it may be possible to make predictions about the future and interpret it from today. However, this does not mean predicting the future.
Historian’s Bitcoin Commentary
Homo Deus’s author recently discussed what Bitcoin brings and takes away from us. He evaluated its potential future risks and offered an interesting perspective. Historians are somewhat similar to technical analysts in financial markets. Both have the ability to interpret past events and movements to predict future occurrences or new things that might happen by looking at the past.
Technical analysts are often wrong. However, the best way to predict the future is to present projections about human psychology according to current and future conditions. The book “Homo Deus: A Brief History of Tomorrow” was written by Prof. Harari in 2015. In this book, he tries to produce scenarios predicting the future of humans. While doing so, he also talks about many topics such as biotechnology and artificial intelligence.
We have seen examples where science fiction movies made some accurate predictions about the future. The Simpsons can be cited as an example of this. Or we can also cite TIME magazine covers as an example.
Bitcoin Commentary
Prof. Harari looks at modern finance today and shares his concern that Bitcoin may bring more harm than benefit in the future. According to his post on his Instagram account, it seems like the global financial system is being undermined. Perhaps what we need is such a dynamite? Moving towards a more closed but perhaps better alternative than the current system, where resources are exploited and some people are much more equal than others, may not be so terrible? A new way where money cannot be printed indefinitely, and people do not have to trust others in the financial system? Can we talk about reliable institutions or a reliable financial system today? Does a world where countries facing the USA are excluded from the global payment system and battered by embargoes really offer a good environment?
Prof. Harari says the opposite of all this, talking about reliable institutions and more, but the 2008 crisis, embargoes, and many other things make the current system, where only a small part of the world is advantageous and others are almost enslaved, seem to render his future predictions useless. The author of Homo Deus said:
“When I say that Bitcoin is a currency that does not need trust, I am repeating what Bitcoin fans themselves say. There may be good reasons not to trust the banks and governments that create dollars, yen, and other currencies – but this does not change the fact that the preference for Bitcoin is based on distrust of human institutions. Why is this a worrying development?
Because the whole purpose of money is to create trust among strangers. Financial instruments like currencies, bonds, and stocks – 90% of which are just data on computers – create trust among millions of strangers, who can then pool their information and resources to cooperate. Humans control the world because we learned to do this. If we now lose trust in human institutions, this will limit the amount of money and hinder economic activity and cooperation. I hope humanity finds a way to build reliable human institutions instead of adopting trustless technologies.”
I think we need to ask states facing US embargoes and those forced to comply with its demands to avoid it about their trust in the dollar. For now, Bitcoin seems more tangible and realistic than the story of reliable human-based institutions.
