A little over 100 years ago, during the height of World War One, it appeared to all informed observers that the Russian Tsarist regime was firmly in control of the country. Indeed, just days before the Russian revolution which shook the world took place, most, if not, all of the informed commentators were describing the Romanov Dynasty’s autocratic grip on power over the entire Russian empire was “indestructible”. And yet, within ten days the worlds’ oldest monarchy was completely removed from power.
How could a system that seemed to be so firmly in control of a people so quickly come undone? How on earth could this relate to Bitcoin and Cryptocurrencies? Read on because it is this authors’ view that the parallels are clear and prescient today.
To understand the leadup to the Russian Revolution, we need to put ourselves into the mindset of the very different times people lived in back then. In the Russian Empire, the Autocratic Monarchy, which was headed by the Romanov Family was in control of everything. They ruled over the peasants who would regularly simply starve to death whilst the Romanov family and the other members of the autocratic class lived a grossly lavish, debaucherous life of Gluttony. Even while Russia was at war and literally millions of peasants were being slain against German and Austrian machine guns in World War one, the home front was being managed by the Autocratic families who were living in their own bubble and were racked with scandals.
So how did this divide remain for such a long time? Well one reason was simply that the autocrats had control of the military. In particular, they could always rely on the Cossacks to be loyal to the regime. They would quell protests brutally and swiftly. After all, if people did not respect the autocracies god given right to rule, then it seemed to be OK if they feared it instead. The people would be quelled and the Aristocracy believed that the issue was sorted, but the contempt for the people just added to the resentment the people felt and that remained. And then, one day when the Cossacks were sent in to brutally quell an uprising, they didn’t quell it, they joined the revolution. And that was it. That was the end of the Romanov Dynasty at that exact point in time.
Much like today with the financial system, the people are ruled and exploited by middlemen who make vast sums of money by trading other peoples’ value. There seems to be hardly a week goes by that doesn’t include revelations of yet another Bank being caught in another scandal involving Negligence, gross failures of governance and ripping people off. The most prevalent example in our time, was of course the Global Financial Crisis. Negligent banks took risks they could never manage, and when 50 million Americans lost their home and the entire global financial system effectively ground to a halt, the consequences for the banks was a series of bailouts funded by the people. Hardly anyone was prosecuted or fired, but the people picked up the tab to bail out the very institutions who were ripping them off. Just like the rebellions during the Romanov dynasty, the contempt shown to the people just added to the resentment people feel.
And just like during the Romanov Dynasty, the financial power brokers truly believe their station is Indestructible. After all, what other system could survive this long? What’s more, most bankers truly believe their customers trust them. They make what is called the bankers’ fallacy which is simply the view that “if they didn’t trust me I wouldn’t have their money”. What they fail to realise is that until recently they had no choice, just like the Russian people under the Monarchy, they felt they had no choice, but it doesn’t mean they didn’t have a vitriolic hatred the autocracy.
Until recently, people were effectively forced to deal with the Banks and just wear the problems that came with the financial system. They were effectively forced to get credit cards so they could purchase things online. Their leaders felt they were force to bail out badly corrupted banks for fear of the consequences of not doing. These acts are called extortion, and judging by the arguments made by the Australian Banks against having a royal commission of enquiry, it appears that our banks believe extortion is OK, provided the profits are returned to the shareholders. No Kidding, this is exactly what they’re advertising.
But now, for the first time in history, there is a viable alternative to the current banking system which is almost completely impervious to the manipulation of governments and the elite. It’s called Cryptocurrencies, and whether you think it’s a bubble or not, it’s here, it’s here to stay and the genie can’t be put back in the bottle. As cryptocurrencies get more airtime, it’s no surprise that many bankers are out criticising it or ridiculing it. They may claim cryptocurrencies are in a bubble, but has anyone considered that maybe it’s the financial system which is a bubble of delusion much like the autocrats were all those years ago? I am sure they truly believe what they’re saying. Just as the autocrats truly believed the Romanov Dynasty was indestructible.
And what is even more promising about the rise of cryptocurrencies is that for once, the technological change has come from the ground up. From the people. For the people. Unlike the tech boom of the 90s where it was driven largely by large corporations with people riding on the coat tails, with cryptocurrencies it is the elite who will be riding on the coat tails of the people.
It is this authors view that the rise of Cryptocurrencies is, in effect a massive vote of no confidence in the current fractional banking system and the modern day autocrats who dominate it. This also extends to the sheer contempt people feel for the political leadership as well. Cryptocurrencies are, in effect, the ultimate hedge against the cronyism, negligence and arrogance displayed so often in the leadership of our societies. One could also surmise that the Cryptocurrencie are a bellweather to peoples confidence in the integrity of leadership in both the political and financial systems. Hey, I love it when Trump tweets, by bitcoin goes up. No kidding.
So the next time you hear a banker talk about bitcoin being in a bubble, maybe it’s worth asking thinking whether it’s actually the criticiser who is in their own Romanov bubble.
The real question here is that with comparisons to the Russian revolution, who will be the Cossacks? Wall Street or the Governments?
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