The Hyperwealth Manifesto
(Of Digital Money and a Blueprint for Humanity’s Next Economic Model)
Our civilisation is on the verge of collapse. With population growth pressing hard on the limits of our organically developed infrastructure, and a fragile 200-year bull run, it’s time for a major overhaul
Given the vast complexity of issues at hand, our vulnerability to disruptions in the supply chain, the pernicious effects of profound corruption within our bodies of governance, exploding national debts, and the erosion of morality and social stability at the hands of a media apparatus hell-bent on pitching men against each other, where do we start?
For solutions, we need go back to the very beginning
Of Trade and Power
The bedrock of civilisation is trade — without the ability for a man to exchange the fruits of his labour for those of others, we would still live in caves
The lofty heights we have reached owe largely to occidental thought, whose foundation is found in Christianity. The Roman Catholic Church offers a clear perspective regarding money. According to the good book:
For the love of money is the root of all kinds of evil — 1 Timothy 6:10
…and although this view makes great sense from an ecclesiastical perspective, for money proves a clear competitor of men’s allegiances to God, its prevalence in the current zeitgeist is most regrettable as it has allowed those unconstrained by these notions to gain control of the world’s wealth, to the great detriment of the 99%
As the more perspicacious will agree, upon close examination, most of the world’s problems, daunting and intractable as they seem, are underpinned by money — from endless resource wars, to famine, illness and death, the Four Horsemen of the Apocalypse appear to ride on the coattails of our financial infrastructure
Our generation has borne witness to both a sizeable rise in wealth, as a function of globalisation and technology, as well as to extraordinary financial inequality, as “the great unwashed”, due to their ignorance of money, have failed to capture their share of the bounty
Permit me to issue and control the money of a nation, and I care not who makes its laws! — Mayer Amschel Rothschild
The truth is the average man does not understand money. Not how it is created, destroyed, amassed or squandered — for its secrets have been closely guarded by the cabal that manages our world
And herewith lies the root of poverty and great human misery: that the rich benefit and derive their power from the ignorance of the poor
…who, by virtue of spending their entire lives chasing after subsistence money, perpetuate the wealth amassed by the ruling élite, literally granting to these riches their worth
It is that we use, seek and store their fiat, placing our faith on its legitimacy, what gives 30 families on the planet the power to do with us as they will. And that, they do, pursuing genocide and a litany of crimes against humanity in support for their agenda of reducing world population
The Keys to the Kingdom
If we are to survive, we must first regain our sovereignty and wrest control away from The City of London, a.k.a. that Anglo-Dutch oligarchy that currently runs the world
Fortunately, to accomplish this is easy: we need only walk away from the banking system
Until the invention of bitcoin, this endeavour would have been impossible, but given the decentralised, autonomous architecture of this first-of-breed cryptocurrency, today we have the chance to fashion a new, better banking system. Given bitcoin’s openness to all, its unquestionable impartiality to the stakeholder, its imperviousness to law, its uncompromising guarantee of integrity, and its indestructibility,
humanity has found a new imperative: adopt or die
In other words, planetary-wide adoption of cryptocurrency represents, not only a chance to restructure world power, to escape the tyranny of scarcity, to liberate the benefits of our heightened levels of creativity from the constraints of taxation and confiscation, but also the mechanism required to power humanity through its next stage of development
As I shall argue here, this next stage is what in academia has been termed “hyperwealth”, an economic arrangement whereby all men can be rich
How to Build Wealth: A Primer
Though the subject of finance glides swiftly above most people’s heads, its core construct, the process of creating wealth, is quite simple in nature and follows the recipe shown below:
- Find or create something scarce,
- Get a hold of as much of it as possible, and
- Convince others that they need it
The brilliance of Satoshi Nakamoto has gifted humanity its first contentious artefact in the digital realm i.e. the power of artificially created scarcity on the internet
By contentious I mean that property of physical goods, so labelled by professor Lawrence Lessig of Harvard Law School, whereby a thing may rest but with one individual at a time i.e. that a thing given cannot also be kept. It is this contentiousness that serves as the basis of trade, that motivates men towards creativity, and that gives money, and by extension wealth, its value
In marrying money to the internet, Nakamoto has created a nexus between our new computing infrastructure, and the form of value we have always known from the physical world. Nakamoto will, therefore, bestow on humanity the open, egalitarian and fair access to wealth that the internet has granted to knowledge
The reader cannot be faulted for concluding that to abandon banking must therefore mean the adoption of bitcoin. In this, he would not be entirely incorrect, however, though it has shown the way, bitcoin cannot perform this role — nor does the reason owe to its well known scaling issues, nor yet to its lack of a Turing-complete engine capable of securing business logic, but rather because the answer lies in plurality, where bitcoin is but a single currency
In other words, the key to hyperwealth lies in our ability to create as many fixed monetary supplies as there are business concerns
Of Commerce and Cryptocurrency
Though bitcoin has now been around for nearly a decade, its adoption, greatly hampered by many factors, has not generally been successful. Where, the clamouring masses seeking escape from the penury of austerity measures? Where, the adoption of the business world in its quest for profitability, for shirking the yoke of taxation?
Whilst regulatory concerns, fear of the unknown, insufferable volatility, and infrastructural insufficiencies have certainly proved obstacles to broad adoption, these problems are not quintessential to its failure. Rather, it is the simple fact that viewed merely as a settlement currency, it has no greater claim on public interest than does the US dollar. In other words,
bitcoin has not seen significant adoption because it has not been weaved into the fabric of commerce
But the technology has the capacity to revolutionise economic activity. The key is to view it through the lens of wealth creation instead, where demand for goods whose supply is elastic, translates to demand for tokens, whose supply is fixed
The basic formula for how trade occurs is simple and has remained unaltered throughout our long history i.e. in order to receive something, a man must surrender something he owns. Thus men grew potatoes to trade them for shoes, panned for gold, which they traded for horses, and today trade their time at McDonalds for a wage, which is subsequently traded for rent, mobile phones and video games
The redesign of this formulation, a feat only now possible given the advent of programmable money, signifies a paradigm shift of gargantuan proportions. It is this metamorphosis that is required to weave cryptocurrency into trade and commerce, and that will necessitate the imperative of adoption
So, what then is the secret sauce? Stake the tokens, don’t transfer them
Which means to say that in lieu of paying a merchant for his goods, customers will buy and hold the merchant’s token
Of Aligned Incentives — a Win-Win Scenario
Consider that from the customer’s perspective, staking tokens in exchange for a product or service appears to make the acquisition free of cost. For example, purchasing $40 in token to pay for lunch grants the customer both lunch and the $40 value of the tokens — since he never transfers these to the merchant but merely stakes them
Thus have we broken the second law of thermal dynamics, which states that there’s no such thing as a free lunch
The scheme can be thought of as a discount, where the dollar value of tokens held in the customer’s wallet accounts for the size of the discount. If lunch costs $40, a customer with $10 of discount tokens in his wallet is granted a 25% discount. $30 in tokens results in a 75% discount, and $40 or greater token balance means lunch is free of charge
As for the merchant, the amount owed was received, but not in exchange for the physical goods delivered. It was instead, for the sale of token, all of which belongs to the merchant at zero cost, and which rises in value as the reserve diminishes i.e. as the aggregate of customer demand increases
Rising prices are a natural phenomenon of fixed monetary supplies and given the staking requirements of the scheme, which shall largely eliminate the sell side endemic of most assets, token prices in this scheme are sure to show little vulnerability to downward volatility. In fact, proper pricing as concerns the sale of token from reserves, will be accomplished algorithmically, according to a sigmoid, asymptotic curve designed to fit the particular needs of each merchant
Effectively, the merchant is no longer in the business of selling whatever merchandise he carries, but rather gives that away as an incentive to sell the real product: tokens, that he gets to sell at ever higher valuations. Which brings us back to why bitcoin cannot work: as a universal token supply, bitcoin cannot uniquely reflect, and therefore capture, the benefit created by each merchant’s efforts in their purveyance of merchandise, the seduction of their audiences, and the managing of efficiencies within their operations, etc. This task can only be accomplished by means of a token supply bespoke to the given merchant
The constant upward pressure on prices carries the simple consequence that it makes its holders wealthy, ergo both the merchant and his customers benefit in terms of capital gains. As a corollary, no sooner does the customer discover his good fortune in holding the merchant’s tokens, than he proceeds to buy more of these than he can reasonably use for discounting purposes. In other words, the system incentivises customers to become investors, which incidentally benefits the merchant in that such sales need never incur the operational costs of supplying the actual product or service
In other words, the merchant is now in a position to receive free money
From a balance sheet perspective, the merchant benefits in two significant ways: 1) his income decreases, and 2) he now owns a massively appreciating asset, which may be sold and will be sold each day at higher valuations, to pay for operations
The net effect of #2 above is that his cost of goods and labour becomes deflationary. Consider that a kitchen pipe that bursts may cost a restaurauteur $180 in the shape of a plumber’s visit. If at the time of this unfortunate event, token prices are at dollar parity, the merchant must sell 180 tokens to pay for repairs — which he does readily, absorbing the cost on a business-as-usual basis. However, if six months later the same pipe breaks whilst token prices have risen 10x, the cost of fixing the pipe results in an outlay of only 18 tokens — effectively, this second visit costs the merchant $18, and if a year later the pipe breaks once more, his cost for a third visit may be 18¢
In other words, as the merchant’s token supply appreciates, it serves to subsidise his cost of operations, therefore increasing profitability. Of course, because lunch is free, the scheme does also increases the volume of business transacted
But, capital appreciation takes time. For the less patient, other features of the system should prove alluring. Consider that most retailers subsist on such thin margins as to cringe at the 3% charged by Visa/Mastercard for payments. These costs would, of course, disappear given that the customer shows up with token already in the wallet
Of even greater import, the merchant will find that along with his dwindling income, the crippling costs of taxation also disappear — a savings which, depending on jurisdiction, may be as high as 50%. From an accounting perspective, what the scheme achieves is the conversion of ordinary income into capital gains. Considering that the bulk of tax law concerns income and very little of it capital gains, this places the business in the enviable position to greatly reduce taxes. In fact, with slightly clever jurisdictional structuring, the capital gains taxes do become completely eliminated, allowing the merchant to capture multiples of the value in his operation
Why does this work?
Primarily, the scheme will find ready adoption, for it realigns the currently antipodal incentives of its transactants i.e. rather than haggling for a better price, because we part with hard-earned money only begrudgingly, the customer gets lunch, and the chance to make a good investment that makes the merchant rich. It’s a win-win scenario
But a second, more insightful reason for the potential of this approach, is that it functions as a sand-trap, collecting and forever holding every dollar that its participants have surrendered, in essence fostering and encouraging the repudiation of fiat. To understand why this matters, consider that a merchant that pockets $40 has exactly that amount in the pocket and nothing more, which is also what he’ll have 2 months or 10 years thence, for dollars not only do not appreciate in nominal value, in real terms they actually devalue across time. By contrast, $40 of token in his pocket becomes $400 in 6 months, or possibly even $4,000 depending on the appetite of his customer base
Keiretsu, a Model for Anti-fragility
At the end of WWII, the Japanese economy was reorganised to replace the zaibatsu, a series of family-run monopolies across industry verticals. The new, so-called keiretsu model, created a system of cross-ownership within supply chains. This arrangement offered not only greater invulnerability to corporate takeovers, but it also proved to spread risk across the vertical during downturns in the economy
The basic concept is that customer dependencies may also create a natural relationship from an equity perspective e.g. a car manufacturer has an incentive to own shares in his primary clutch supplier, since his business improves the other’s bottom line. Likewise, the clutch manufacturer is smart to purchase stock in his biggest clients, an arrangement which not only grants him rights as a shareholder to influence his customer’s path, but also creates greater loyalty within the vertical
The staking of tokens naturally represents a keiretsu. Consider that a restaurant may pay the fishmonger or baker by purchasing their discount tokens and that these in turn may pay their own suppliers using the same arrangement. This cross ownership creates a tree of benefit where even if the restaurant’s own business is waning, its balance sheet may prove quite healthy on account of the success of its providers
In other words, not only does the discount token model amplify the value generated and retained by a business, it also naturally provides anti-fragility to the ecosystem where the success of any one participant props up its business relationships
Taken to its natural conclusion, every individual will eventually issue his/her own token supply, such that salaries in their current form disappear. This also means that personal token supplies will ultimately function as retirement accounts where the token reflects the extent of the individual’s success across his lifetime, as well as the general good will of those around them. The average person may thus end up managing a portfolio of friends’ tokens acquired as birthday gifts, for yuletide, a grandmother’s support for college, the fund-raising in times of financial hardship, or simply as thank you notes
The Economic Model of Abundance
From a social perspective, in the same manner governance was liberated from the monarchies of the 19th century into the hands of democracy, monetary policy will transition from the despotism of central banks, to the consensus of the merchant and the customer
discount tokens do for wealth what democracy did for governance i.e. to create a more fair distribution where the value is granted to those that generate it
From the vantage of economics, this new model affords each merchant a relative isolation from the greater context of national performance that allows the sweat of his brow to glimmer. The mechanism is analogous to that of the corporate spin-off, where the parent company, in creating a wholly owned subsidiary, frees the productivity of a particularly successful division from the burden of its own lassitude, thereby creating a vehicle more capable of clearly representing value to investors. Thus the creation of each discount token supply represents a spin-off from the US dollar — an act of unburdening the business concern from the albatross of government debt — that allows the enterprise to shine
Historically, value has been the product of men whose intelligence, initiative and drive has produced the comforts of men and what we refer to as progress, and this value is most plentiful as it resides with each and every person on the planet
Unfortunately, the more cunning have devised ways to capture the value of others for their own keeping. There is abundance in our world, but it is withheld from the many by the few. Thus we suffer the cartels that constrain supplies of diamonds, oil and other commodities, we squander taxes by subsidising farmers not to grow pigs, dump grain into the oceans rather than feeding people with it, allow pharmaceutical companies to obscenely overcharge for medicine — a traumatic cycle that continues unimpeded
There is plenty in the world, and all we need to access it is money. Our own money
Closing Thoughts
Discount tokens represent a predatory economic model that will spread like wildfire as those operating under traditional arrangements fail miserably to compete for market share. Its success will undermine the efforts of the ruling élite, creating a backlash
However, slow to react, governments will arrive at the party late, discovering that not only has the exodus from fiat become too great to stop, too embedded in the business cycle, but that the support for the legislative changes required to stem its progress will be non-existent. As a function of the scheme’s adoption, governments will face imminent defunding and ultimately dissolution, paving the way for a brighter future for humanity. The statesman Benjamin Franklin once commented that:
nothing can be said to be certain, except death and taxes
A legal, voluntary, unimpeachable, rapid and self-interested shift in the structure of our transaction process will obviate at least one of Franklin’s sureties, as rising wealth leads commerce from the dynamics of scarcity, to those of abundance
…and for a time the world will struggle with the responsibility of its newfound wealth. We believe much good will come of it as the little people become empowered to assert their will on the system. Much good, as the dictatorships of the 20th century fade and a new perspective alights on humanity about its role on the planet
Hyperwealth, however, is merely transitional
Over the longer term, wealth will simply disappear, as the economist Adam Smith theorised in his excellent book, The Wealth of Nations, happening as it were, as a function of mechanisation. After all, wealth is only the storing of nuts by a frightened squirrel who is not guaranteed food in wintertimes, and with recent developments in artificial intelligence and robotics, the prospects of humanity going hungry are quickly diminishing
Thus, just-in-time manufacturing, predictive technologies and the power of programmable money will help with guaranteeing our future needs, and transitioning our civilisation to one where trade, money and wealth become relegated to the history books
Version 1.0.2 [25-XII-2019]
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