Bitcoin heralds a new Reformation?
Portrait of Martin Luther. Image by Thierry Ehrmann via Flickr.com. License: Creative Commons
A report by a Dutch investment company calls Bitcoin a second Reformation. The author compares the circumstances and events at that time with Bitcoin. The exciting historical analysis raises an interesting question: Bitcoin is really so big that it can be compared to one of the most important events in Western history? Or is the thesis a little inflated? And what does she say about the future of Bitcoin – and the world as a whole -?
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
Sometimes it says that Bitcoin is as big as the internet. Or as big as the invention of paper money a few hundred years ago. Or like the innovation of the stock trade. All of that is huge – but it is big enough too?
If it goes to Tuur Demeester, all of this is thought too small. Demeester is a long-time Bitcoin investor who helps with Adamant Capital investors to put on cryptocurrency. In a new report, he compares Bitcoin with the Reformation, that major world -historical event in the early 16. Century, which marked the transition from the Middle Ages into modern times and became the basis of modern capitalism mentally history. There is hardly any bigger.
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
Historical parallels
He, Demeester, initiates the report, before already parallel between Bitcoin and the early oil industry, the wars of the search engines and the markets for domain names, but “had the feeling that I could not use the fundamental meaning of the era, for which Bitcoin is a catalyst.“Only when he dealt with the Protestant Reformation,“ I felt that I found a template that is enough enough.“Strong words – but how does Demeester justify this comparison?
He first tries to build parallelities by looking at the basics or conditions of the Reformation:
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
- Firstly, there was a “pension-down service monopolist”-the Catholic Church, which controlled the keys to heaven and, for example, enriched it through the indulgence trade unadorned. In fact, the anger about the spiritual monopoly of the Catholic Church and its ever more unscrupulous exploitation was a significant reason that Martin Luther’s theses could get such a force. Many German princes were also rude, pissed off by the fact that a corrupt clique around the Holy Stuhl made a significant impact on German politics.
- Second, there was a technical revolution that acted as a catalyst for change. This was primarily the printer press that drastically lowered the costs of installing a book. In addition, there was double bookkeeping, which accelerated international trade. This technical revolution became the basis of a cultural and social revolution. Especially without the printer press, it would never have been possible to spread the new Christian teaching. Her principle that the believer should refer to the Bible alone would not have been realistic without the book pressure, and without this technology Luther’s Bible translation would have been much less important.
- Thirdly, a new economic class was created: the dealers gained its importance across Europe. The volume of the trade attracted, there were new factories, the trade flourished, the division of labor became more fine -meshed, and technical innovations used. This new class no longer fit in the medieval social structure and was therefore mentally open to take up an actually spiritual revolution and take as an opportunity to improve their social position.
- Fourth calls Demeester “credible strategies for defense and escape.“Here he concentrates on the Netherlands, which had escaped during this time through a long revolution of Spain. They had used their expertise in hydrotechnology for their defense, for example by flooding the fields in order to stop the armies that have been approaching. If the initially weak Protestant territories had not been defensive enough to oppose the militarily dominant Catholic powers, the Reformation could hardly have existed. If you look at Austria, where the early Lutherans were brutally suppressed, you can see how important this point is.
Of course there should have been more foundations for the Reformation. But I think Tuur Demeester gives some excellent and fitting examples. He then contrasts you with current analogies:
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
- The monopolistic service provider is the “International Money and Financial System (IMFS)”, which has given the dollar a privileged position since Bretton Woods (1944). Just as the Roman Church has acquired secular power to the north of Europe because of its spiritual monopoly, the dollar monopoly becomes an instrument to exert political pressure far beyond the borders of the United States.
- The technical innovations of the 15. and 16. Century is opposed to the digital revolution. Their basis is progress in telecommunications technology, computer technology and data storage; It creates new tools such as open source software, cryptography and social media. That this technological change takes place and that it has an impact on society should be unobjectionable. The influences are noticeable everywhere, whether in the trade, the informationals sovereignty of the individual or political will formation. Whether you have already initiated a kind of Reformation or whether it is still happening is difficult to assess from the bladder of the present.
- The new economic class, analogous to the merchants, are the “Millenials”, a generation that has deeply skepticism about traditional finance and warmly welcomes digital innovations. From around 2029, these millennials will occupy the key positions of business and society. This comparison is somewhat behind, because, unlike the merchants of the early modern period, the millennials are not a new socio-economic class, but only another mental-cultural milieau that is placed on an existing class.
- Finally, cryptography is a credible defense tool that becomes new instruments such as VPN, Mesh networks, signal, U2F and so on the key to digital sovereignty. In fact, cryptography can be described as a digital fortress, an instrument that creates a new weight weight by making it difficult for the prevailing powers to control and prevent communication. Furthermore, the anonymity enabled by cryptography enabled as a protective shield that makes it dissident and revolutionary to avoid persecution by state power.
This reasoning is brittle in places, but quite revealing. The company at the time was in transition, and today it is also. At that time there were social foundations for a Reformation, maybe there are today, and the time is ripe for technical, social and economic surroundings. To what extent this is specifically related to the present, and not to most decades of the past 100 years – and to what extent this specifically indicates Bitcoin – but remains just as open as whether you cannot replace the current categories mentioned.
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
Is not a certain arbitrariness if Demeester takes the millenials as a new class? Wouldn’t it make more sense to list the programmers and digital tech entrepreneurs here in general? And cryptography is really the decisive tool for resistance?
While Demeester’s analysis remains methodically somewhat solid and does not exaggerate its scope, it goes on rather thin ice cream in the following part.
Doctrines at Bitcoin and Luther
First compared to the doctrines then and today. According to the author, they had reproduced “the essence of the rebellion”. There were views of “unity and conviction”, which you can also see today. So the Protestant believers have set on Sola Fide, “only faith alone”. You have called on to put the ceremoniality and ritualization of the Catholic Church and put the faith and the Holy Scripture in their places.
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
Today-more precisely: in the Bitcoin space-there is a strong belief in “vires in numeris”, that is, the strength of numbers, without which a Bitcoin wallet makes no sense. Mathematics replaces human fault, and instead of trusting, the blockchain is verified. Finally, the Hodl ideology expresses the desire to keep its money itself and, regardless of volatility, to keep it. The saying “Not your keys, not your bitcoins” expresses a deep mistrust of keeping it.
So we have some parallels. There are basics for a revolution, and many bitcoiners take the cryptocurrency and the ideological content associated with it with a conviction that borders on religious. It should not be a coincidence that in a survey on the religion of our readers “Bitcoin” was one of the leading answers. These are exciting parallels, but I am not sure whether Demeester does not indicate too much here. After all, it is only about money, while the Reformation was the struggle for the immortal soul of man. Can you really drive this comparison that far?
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
The financial system of the Reformation – and what that says about Bitcoin
The methodological basis afterwards becomes very fragile. Demeester picks up some characteristics of the finance industry during the Reformation period to draw parallels where Bitcoin can develop. That seems to me a questionable approach, but is still very interesting.
Without a doubt it was 15. and 16. Century a age of financial breakthroughs, and the Netherlands played a key role in it. Since the trading with the colonies intensified in overseas, the need for capital increased to finance the merchant shipping, as well as that after the safe storage of precious metals, which were then exchanged for mobile changes.
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
Demeester describes the high security of the Amsterdam Wisselbank, a large custody for gold and silver, which the precious metals kept directly on the market square. It should play an enormous role for the overseas trade because she enjoyed the irrefutable trust of citizens, city councilors and trade companies for an impressively long time. Bitcoin, explains Demeester, is a product of a cultural aversion to third parties that keep money and serve to minimize the risk of theft and loss. What the Wisselbank in 16. Century managed, creates Bitcoin with multinig addresses and other smart-contract-based solutions to save bitcoins safely. Therefore, saving values - and the publication of derivatives based on well -kept bitcoins – may be a key business.
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
At 16. Century to deal with the risks of the overseas trade, new financial products were necessary. So “Sea loans” formed, which were accompanied by a high return, but were only paid for if a ship landed safely at the destination. Later, investors were able to participate in the income of a seafaring through the “Kommenda”. These two financial products initially replaced sea insurance, which was founded a little later in Italy and spread to all of Europe. These insurance products asked for more and more trust – a dealer could also sink his ship himself instead of taking a complex journey – which is why the rates fluctuated depending on the trustworthiness and culture.
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
The insurance companies for Bitcoin, concludes Demeester, are only in development today. There are some proto insurance, for example for miners and for storage, but these usually only extend to parts of the wallets. The risks from volatility or regulation are also rather not insured. Demeester therefore assumes that insurance companies will have a great future at Bitcoin – but without dealing more precisely on which trade transactions are covered by the insurance. In the Netherlands of the Reformations, these were the large trading trips that drove to the other end of the world to the other end of the world to introduce goods to Europe that were previously known if they were known at all – extremely rare. What is the equivalent? If you only take exchanges here, the cat bits into the tail itself.
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
Furthermore, at the beginning of the 17. Century six smaller Dutch trading companies together for the East Indian trade company and merged their gold insert and merchant fleet. Then they published the first non-state stocks that became a traveling success in Amsterdam and brought investors good profits. This gave the new commercial companies a previously unthinkable liquidity of stored security. According to Demeester, the Bitcoin holders who save their coins and bring about a strong concentration of these digital assets are. The author expects borrowing from other goods with stored Bitcoiners and derivatives based on frozen bitcoins an important market.
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
According to Demeester, Bitcoin can herald a new Reformation that has the potential to replace the current international financial system.
More than just technology and finance
Methodically, of course, his report is on shaky legs. The factors on the basis of which Demeester compares the current situation around Bitcoin with the Reformation appear somewhat arbitrarily selected. However, while such a parallelization is still reasonably legitimate, the derivation of future market windings violates an important historical commandment – the past may explain the present, but it cannot predict the future. Especially if this is based on a shaky comparison.
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
However, the theory is extremely exciting, and Tuur Demeester’s predicting that the publication of change and other papers on the basis of stored bitcoins could become a key business, anything but unflausible. Something like that is quite imaginable and could make a lot of sense; Bitcoin as the basis of all values lies on multi-igal wallets in the safest vaults in the world, while they act as a cover for many other financial products. We already see a similar tendency at Ethereum, where more and more ether are locked up in smart contracts in order to become the basis of loans, stable coins and derivatives.
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
Bitcoin is not just a technology-such as the Internet or the radio-and not only simply a financial product-such as stocks or derivatives-but a very comprehensive technical and social-economic field that bundles almost all large tendencies of the present. Therefore, a comparison with an event like the Reformation is quite appropriate. However, Demeester unfortunately does not fully take his own thesis by concentrating on the financial industry – which was often less connected to the Reformation itself, but with overseas shipping and a technologically influenced economic growth – instead of looking at the universality of this event.
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
When Bitcoin is a new Reformation – what are your content? The comments on “Hodl” and “Not Your Keys, Not Your Coins” do justice to such a comparison? The reformation was extremely involved in the spiritual history. From banal questions – for example, whether the believers literally take the meat of Christ or just a symbol of it – long -time debates became over everything that were rolled over thousands of book pages, and ultimately even triggered wars.
The Reformation also had no less involved political connections. For example, the opposition to the emperor made the Saxon prince support Luther, while he himself was spiritually revolutionary, but remained politically conservative what it was probably possible for him to receive the support of so many princes. Only this did the Lutheran Reformation to assert itself, and only their success made it possible to assert themselves more politically more radical Protestant movements – the Zwinglians in Switzerland or the Calvinists in the Netherlands. Particularly radical movements – like the sectarian players of Münster – failed due to their own radicalism.
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
Such observations have a large amount of questions that should be asked and answer if you think about whether Bitcoin and the Reformation are comparable. How is the interplay of the service monopolist with other power centers? How does Bitcoin affect it? What legitimacy gets Bitcoin – and which splinter groups are there? Could you compare the transparent Bitcoin with the Lutherans, but the anonymous Monero with the Calvinists? And is the Bitcoin movement only to sharpen and radicalize your profile? What changes in the way of thinking leads Bitcoin to which new social models can the cryptocurrency lead? And threatens a war for crypto, just as there were wars about the Reformation?
a:hover imgbox-shadow:0 0 20px 5px rgba(255,0,0,0.6);
Such ideas cannot be found in the report by Demeester. However, this does not change the fact that it is an exciting and profound essay that provides many suggestions and also submits a prediction that will be plausible, despite the methodological weaknesses, which will be the future trends in the Bitcoin economy.
