Stephen David Mauldin
9 min readNov 22, 2020


“Zero Money”: First Principles Thinking About Monetary Value

Change the Money, Change the World (17)

Part 5 (A) — Bitcoin standard: adoption, adaptation & activism

This is the final part of the essay narrative prior to the concluding part consisting of annotated links. I will be posting five entries Part 5A-5F. Here at the beginning of this set of postings I will give some overview before introducing and adding the content of Part 5A.

Overview: Part 5A is about the Bitcoin standard, but the focus is on the algorithmic properties of the Bitcoin blockchain which are important to know for the broader discussion provided about digital currencies in general, not just Bitcoin. Also, by digital currencies are included in addition to Bitcoin, the digital forms of fiat currencies starting to emerge as well as other digital tokens categorized along with Bitcoin as cryptocurrencies. Part 5B is about adoption, within the existing economy, of the Bitcoin blockchain itself, exclusive of other cryptocurrency blockchains that are distinct from the digital forms of fiat. Parts 5C and 5D are about the yet negative manifestation of fiat digital currencies and about the positive manifestations of cryptocurrencies other than Bitcoin. Both of these are adaptations of some blockchain properties shared with the Bitcoin standard but there are compromises regarding the core principle of maintaining scarcity of the medium and/or other features that may or may not be practical adaptations for bridging the legacy paradigm with a novel economic system. Parts 5E and 5F are about political protest and other activism that emphasize that this essay is about “change the money, change the world” in a much broader sense than simply advocating for the Bitcoin standard.

Introduction to Part 5A: There is an international competition to topple or mitigate the USD reserve status. This power struggle has everything to do, not with Bitcoin but with the issues that are addressed by the properties embedded in the algorithmic structure of the blockchain that are the Bitcoin standard. Bitcoin has been demonstrating a rapid international adoption and has spectacularly outperformed all other asset classes as a stored investment, including gold and stocks. We are witnessing adaptation to value stored in Bitcoin with a view to adhere to its core properties, keeping it scarce, while in effect working in allegiance to Bitcoin itself becoming the world reserve currency or at least the inviolable core technology of that currency. This will require political struggle on a global basis with a platform of action beginning with resisting and replacing mechanisms of corruption while supporting what serves adoption and adaptation of the Bitcoin standard. This essay is not about blockchain technology or Bitcoin except in providing important information about its properties: its about “change the money, change the world”. Let me explain why:

Properties of the Bitcoin standard — the brand and the one and only

On the planet these days, monetary value is universally denominated in USD. It is the unit of account by virtue of its status as the world reserve currency, This does not mean just that the RMB or the EURO are measured vs USD, it means that all forms of stored value, including gold and real estate, as well as prices and wages of goods and services in the marketplace denominated in any currency are essentially measured in terms of dollars. China and Russia, for example, have some ambitions to topple or mitigate the USD reserve status. This power struggle has everything to do, not with Bitcoin, but with the issues that are addressed by the properties embedded in the algorithmic structure of the blockchain that are the Bitcoin standard. So what exactly are these properties?

“… the notion that a mechanism that is part of Bitcoin’s operation — putting transactions into blocks which are chained together to form the ledger — can somehow be deployed to solve or improve economic social problems, or even “revolutionize” them is … a lack of understanding of how bitcoin actually works … People touting block chain technology as a process that could generate economic benefits on its own do not understand the larger process of which it is a part … Bitcoin’s mechanisms for establishing the authenticity and the validity of the ledger is extremely complex and complicated but it serves an explicit purpose: issuing a currency and moving value online without the need for a trusted third-party” — Saifedean Ammous

The Bitcoin Standard — The Decentralized Alternative to Central Banking by Saifedean Ammous

As indicated by Saifedean Ammous in the most famous book on the topic, “The Bitcoin Standard”, the power struggle I am speaking of regarding what could become the world reserve currency is not specifically about Bitcoin or the blockchain mechanism that is part of its operation. It is about the issues we can address most effectively if we have a monetary medium capable of moving value online without the need for a trusted third party at all. This is “trustlessness”. I would add what is known about that value, and also of paramount importance, but not mentioned in the quote: that issue of currency is limited to 21 million Bitcoin and thereby reflects the absolute subjective idea of scarcity maximizing monetary value in our objective reality. The fact that Bitcoin’s mechanisms for authenticity and validity bypass any governance is what protects the currency from human hubris. That is “decentralization”.

This essay is not just about blockchain technology or Bitcoin, its about “change the money, change the world”. It is common for the critical to ask why they should trust Bitcoin since it is just another currency competing with the rest. Somebody else could just create another competing digital currency, even using a blockchain mechanism. That misses the point. A coin with opposite properties to fiat would still be Bitcoin with another name, but one far behind in branding. It would be using block chain mechanisms adapted for trustlessness and decentralization. Furthermore, the algorithm limits mining of Bitcoin, not just in the total final supply, but also by the rate of production. In that sense Bitcoin is the one and only. To change the money for a superior money you need a new medium, and we do have that superior medium available in Bitcoin. That does not change the world. That change begins and proceeds through adoption through a critical mass of investment in the medium as a store of value. At the same time, growth of adoption through adaptation is facilitated as the interim strategy. The overarching objective is a unit of account, a store of value and a medium of exchange that is 100% trustless and decentralized.

A blockchain is a ledger of transactions grouped in time-stamped sequential blocks. All blocks added to a chain remain, forever as the complete record of all transactions on the blockchain in memory storage on a computer. As that complete Bitcoin blockchain is continually replicated on other computers they are said to be identical “nodes”. All nodes of the blockchain must be identical before any new Bitcoin block is finally verified. Many use-cases for blockchain information management exist in addition to Bitcoin, and not just for financial transactions. Each have properties exhibiting degrees of either centralization or complete decentralization, and degrees of trust (between three or more parties) or being trustless peer to peer transactions. Any blockchain may have its unique system of verification and authentication or auditing. A concise description by Saifedean Ammous of the specific case process of moving value to the Bitcoin blockchain introduces the properties required for decentralized trustless “Zero Money”, and algorithmic auditing in Bitcoin:

“… Nakamoto removed the need for trust in a third-party by building bitcoin on a foundation of very thorough and ironclad proof and verification. It is fair to say that the central operational feature of bitcoin is verification, and only because of that can bitcoin remove the need for trust completely. Every transaction has to be recorded by every member of the network so that they all share the one common ledger of balances and transactions. Whenever a member of the network transfers a sum to another member, all network members can verify the sender has a sufficient balance, and nodes compete to be the first to update the ledger with a new block of transactions every 10 minutes.”

Just as important has been the decade plus economic performance of the node network recording the ongoing finality of every transaction that ever occurs on the blockchain, which is 100% transparent to anyone who wants to examine the data. The Bitcoin blockchain itself is for peer to peer transactions involving no third party and therefore no single point of failure between transacting peers. The network of nodes, and the ledger of transactions on linked blocks identical on each node, are maintained by a crucial algorithmic mechanisms designated as “hashing”, “public key cryptography” and “proof-of-work”. I will only need a synopsis of each:

A “hash” is a unique data set of fixed size, a one and only symbolic string, generated by a complex mathematical formula to symbolize another data set of much larger size. The formula is non-reversible so it is not possible to decipher the original stream of data. Hashing is essential to a good number of other algorithmic mechanisms of Bitcoin, most importantly “public key cryptography” and “proof of work”, but also others separate from or involved in those crucial mechanisms. It is “proof of work” that is required in “mining” a new block of Bitcoin transactions. The new block is submitted, by a single node of the network of nodes, for addition to the blockchain ledger of previously verified blocks of Bitcoin. Mining is difficult by design, such that nodes compete against other nodes in mining for a “block reward” of Bitcoin and transaction fees. The winner is first to solve complicated mathematical problems through using a lot of expensive computer processing firmware and electric power. The solution, however, is easily verified as correct by every other node in the network, and the block is added to the blockchain. Proof of work is a methodology related to maintaining scarcity. Twenty-one million Bitcoin will ever be mined, and proof of work makes it difficult in itself, but it is even more difficult since the block reward is periodically reduced in what is called the “difficulty adjustment”.

Hashing is also employed in all aspects of “public key cryptography”: the “private key”, the “public key” and “signatures”. The data set of a persons private key, such as a secret list if 25 words, is converted to a hash. The private key, remaining unknown itself, generates another hash which is the public key that is distributed freely for the purpose of making transactions. That process gets further encrypted as a hash can be made of some different data. That hash can be signed with the private key, then authenticated with the public key. Thereby, others in the network can verify value as being sent from the owner of the correct private key. The user interface for doing these transactions is a lot simpler than it sounds.

One more important reiteration regarding using a peer to peer transaction method, lest it not be immediately apparent: transactions in a centralized network are processed on a hosting computer, a single point of failure or manipulation by the host, or by hackers. The host can also share that information, particularly as regulated to do so, such as is the case with banks (who can actually designate money involved as in some part lendable). A blockchain network with the properties of Bitcoin, technologically managing transactions, is inviolable to external jurisdiction or manipulation. Any change or addition to the Bitcoin network of identical ledgers requires a level of consensus practically impossible, because some central authority or party could not simultaneously take over a majority of the nodes in the network. Bitcoin has never been hacked. People have lost Bitcoin to hackers and scammers, but the point of failure has been the exchanges and other places Bitcoin was sent for custody for various practical reasons. This brings up another feature of Bitcoin for personal sovereignty of one’s wealth. Ultimate personal security is to be your own bank by immediately moving access to one’s Bitcoin on the blockchain to a hardware wallet. A hardware wallet is an independent device, not connected to the internet until the moment of transfers, when one authorizes transactions on the blockchain through the hardware wallet. Exchanges are very secure, but best practice is keeping Bitcoin in hardware wallets until needed, as distinct from software wallets online. Finally, not necessarily recommended, but if you have any amount of Bitcoin accessible by a hardware wallet, a device that fits in a pocket, you can take it anywhere in the world you go, and transact there with any other place in the world with complete freedom.

Change the Money (1) Preamble — Monetary value true by nature

Change the Money (5) Introduction (1) — Zero Money & First Principles

Change the Money (8) Part 1 (A) The technological solution

Change the Money (10) Part 2 (A) The Naming of the Beast

Change the Money (12) Part 3 Ending Inflation and embracing deflation

Change the Money (13) Part 4(A) — Phases of transition 1

Change the Money (16) Part 4(D) — Phases of transition 3

Change the Money (18) Part 5(B) — Adoption of Bitcoin as store of value



Stephen David Mauldin

DOB 1946 Retired Counseling Psychology M.S. Consciousness Studies — Interests: Citizen Diplomacy, Digital Currency