Thread by @anilsaidso

This is the story of two disruptive innovations, several centuries apart, with remarkable similarities.

My hope is that you'll gain insight into the largely invisible technological forces that alter the incentives of obedience and steer the evolution of how we organise society.

What Johannes Gutenberg and Satoshi Nakamoto unleashed would prove to have ramifications far greater than anyone could have imagined at the respective time.
Their *information-freeing* innovations challenged stale and burdensome institutions, ripe for a grass-roots disruption.

Let’s begin with TRUST- the key ingredient that enables us to cooperate and trade.

Assessing it requires access to accurate information.
Maintaining it requires delivering on promises or social contracts.

Two catastrophic events throughout Europe in the 1300’s would severely test the faith people had in the primary institution looked upon for guidance and support- The Roman Catholic Church.

Though the fear caused by these events initially drove *more* people to the perceived psychological safety of religion, the suffering would eventually sow the seeds for counter movements and outright rejection.

In the 2000’s we’ve seen the institutions self-ordained as the guardians of economic stability and employment fail to deliver on their part of the social contract.

Today we are witnessing an equally monumental loss of trust.

A concept coined by @nntaleb reminds us not to underestimate the power of ‘a small number of intolerant virtuous people with skin in the game’ to alter societal preferences.

Central banks, as the all-powerful creators of money, have become a force of influence in our societies comparable to that of the Catholic Church of the Middle Ages.

However, such a privileged status eventually falls at the hand of information-freeing innovation.

Innovation is the process of combining existing technologies in a novel way (when they're mature enough to scale) to solve a problem or satisfy a need.

And it's innovation, rather than top-down decrees, that tends to more permanently alter how societies organise themselves.

Gutenberg's printing press was made possible by a handful of existing inventions. His own skills, knowledge and experiences (intellectual, engineer, merchant) likely also explains why he was so well positioned to see and grasp this opportunity to innovate.

Society was freer, but now operating in uncharted territory. The printing press itself is a neutral technology. But the power to spread information of any kind was now available to anyone who could pay for it. Pandora's box was opened wide.

“The genius of Bitcoin,.., is not in creating any new abstruse mathematics or cryptographic breakthrough, but in putting together decades-old pieces in a semi-novel but extremely unpopular way."

-@gwern (Bitcoin Is Worse Is Better)

At first, we tend to get wildly excited about new innovations when they’re first released into our world & expectations get ahead of reality.

Eventually though, this dynamic flips and we start to underestimate its full potential.

This phenomenon is known as Amara's Law.

With new ways to communicate and express ourselves comes new threats and opportunities.

Gutenberg standardised and democratised the process for packaging + transmitting knowledge.

⬇️costs = ⬆️accessibility

Enabling us to exchange and disseminate information peer-to-peer, across great distances.

Satoshi enabled us to do the same with money.

A sharp increase in literacy rates across Europe, as a result of the lowered cost of books, meant the literate elite would soon be challenged. Eventually this would also lead to an emerging middle class.

Printed books worldwide-
1456: 180
1500: ~20,000,000

Today global financial literacy is the next major frontier to unlocking human potential and innovation.

Similarly, as literacy rates rose as a result of increased access to books, it can be hypothesised that financial literacy will rise with greater access to sound money.

In the case of Bitcoin, you may protest that a government will not cede power, especially in the case of controlling the production of money. The printing press holds a valuable lesson for where we might be headed.

As is the case with any new innovation that challenges the monopoly of incumbents or scares the uninformed, disinformation campaigns are abundant.

Knowledge is Power:

Printing, gradually and then suddenly (sound familiar), weakened the power of the church, democratising access to recorded human knowledge.

Gutenberg and Nakamoto gave us new methods to transport information across time & space. This directly challenged gatekeepers reliant on taxation, incentivising honesty and transparency. In order to retain patronage of citizens you now must provide a valuable service.

https://twitter.com/Breedlove22/status/1296416698803748865?s=20

During the Middle Ages, the Catholic Church was a significant source of knowledge and morality through their interpretations of scripture.

Similarly, today central banks see themselves as the ‘originators of money’, the tool we use to store our time.

Francis Bacon once wrote that the printing press, gunpowder and the compass were the creations that forever changed the world.

These innovations fueled The Renaissance.

Similarly, Bitcoin is one of the fundamental technologies ushering in the Information Age.

If a person becomes aware of the true cost of a tax being extracted from them and determines it to be unfair, they will alter their behaviour and seek to implement change at a foundational level.

When this occurs en masse, the structure of society shifts.

‘..the 21st century emergence of bitcoin, encryption, the internet, and millennials are more than just trends; they herald a wave of change that exhibits similar dynamics as the 16-17th century revolution that took place in Europe.‘

-The Bitcoin Reformation by @TuurDemeester

Authority that derives its power from keeping its people uninformed or mislead is unlikely to prevail in a world where innovation is constantly increasing the methods of communication and sharing of information, while reducing the costs and barriers.

Despite the unanticipated negative consequences of the printing press, there are few people today that would wish to put the genie back in the bottle and forgo the aggregate benefits enjoyed by humans throughout the last 500 years.

One day the same will be said about Bitcoin.