Centralized financial systems are highly susceptible to economic failure and can exclude minority communities form benefits

#1: Centralized Financial Systems Can Fail In October 2008, the pseudonymous Satoshi Nakamoto published a 9-page white paper entitled, “.” Although the white paper was released in October 2008, he probably started formalizing the concept of Bitcoin in late 2006 and began coding the Bitcoin software around May 2007[1]. So although Nakamoto conceived of Bitcoin prior to the , the release of his white paper was fortuitous and serendipitous. During the 2008 financial crisis, multiple large banks went bankrupt and some banks were even acquired by governments to prevent a total collapse of the world’s financial systems. The 2008 financial crisis cost the global economy trillions of dollars and destroyed trust between large financial institutions and the public, who were left to pay the price, while the large banks were bailed out. In such a crisis, the danger of centralized intermediaries became clear to all. These centralized intermediaries formed a single point of failure: if the banks fail, financial transactions fail and all money held at failed banks is lost forever (apart from ). #2: Centralized Financial Systems Can Inflate the Money Supply Since the 2008 financial crisis, the world’s monetary institutions have become addicted to (QE). QE is a monetary policy where central banks increase the money supply in order to stimulate a weak economy. QE is not technically just “printing money.”[2] Central banks are buying assets (usually bonds) from the private sector and/or the government. This infusion of money helps the private sector stay afloat in times of economic crisis and enables more government spending. Up until 2021, there were no clear signs of inflation in the U.S. economy, but that has changed. The COVID-19 pandemic led the U.S. Federal Reserve to buy in assets starting in March 2020. And the U.S. government responded by spending roughly on various relief measures with varying levels of effectiveness. In the summer and fall of 2021, the Democrats have proposed $4.5 trillion in additional spending in two separate bills: a $1 trillion infrastructure bill and a $3.5 trillion social welfare and climate change bill. So far, neither of these bills have passed, but the serious consideration of more spending has led to inflation and the search for alternative investments. "The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." (Satoshi Nakamoto, "") In world history, it was usually heavy wartime expenditures, lavish social welfare, or both, that contributed to the economic decline of wealthy nations. In the 1960s, it was the combination of expansive social welfare under President Lyndon Johnson's and a war of attrition in Vietnam that led President Richard Nixon to in 1971. This decision has slowly, but surely debased the U.S. dollar. Without the gold standard, increasing the money supply became too easy, since the money supply was no longer required to be backed by gold reserves. The United States has enjoyed a long period of economic prosperity as the world’s strongest economy since the end of World War II. But only arrogance would lead us to believe that such economic strength will continue on forever. It is nearly guaranteed that at some point in the next century, the U.S. dollar will collapse. No nation and no national currency endures forever. The extending back to ancient times tells us that governments cannot not sustain massive levels of spending without their money eventually becoming debased, devalued, and eventually worthless. #3: Centralized Financial Systems Can Confiscate or Exclude In the modern-day West, we are not accustomed to government confiscation of assets, except in the case of criminal activity (e.g., the FBI seizing assets of drug dealers). But bankrupt governments turn to desperate measures. In 2016, when the Greek government was in a debt crisis, containing $1.6 billion euros. In 2018, when the Venezuelan economy was on the brink of collapse, banks limited withdrawals to (about $0.06 USD at the time). People would wait in lines for hours and ATMs would be empty. In 2016, the Venezuelan government , its largest and most commonly used bill. Immediately, all 100-bolivar bills become worthless pieces of paper. One third of Venezuelans don’t even have bank accounts, so cash transactions are critical to their economy. In the West, we also take banking services for granted. However, about defined as a person “not having access to the services of a bank or similar financial organization.” Many countries simply do not have the financial infrastructure to provide banking services. But in other cases, government and financial authorities intentionally exclude certain people from access to banking services. In the Arab world, only about in 2018. In some places like Iraq, only in 2014. Much of this discrimination against women in the Arab world is based on patriarchal cultural norms that exclude women from gaining financial independence. Even in the United States, there is evidence of discrimination against LGBTQ individuals by financial institutions: “Same-sex couples were 73% more likely to be turned down for a mortgage than similarly qualified different-sex couples, and same-sex couples who were approved for mortgages paid about 0.02% to 0.2% more, on average, in interest and fees” (Hua Sun and Lei Gao, “”)