“What mechanisms do we have available,” Obama said at the latest SXSW in a rare and frank discussion about encryption, “to do simple things like even tax enforcement?
“Because if, in fact, you can’t crack that at all, government can’t get in. Then, everyone’s walking around with a… Swiss bank account in their pockets.”
Obama might not have been talking specifically about a little device I just purchased, but I think he just came up with the company’s tagline.
More on this company — and its brilliant pocket-sized device — in a moment.
First, let’s talk shop. The greatest feature of cryptocurrencies in general, as we’ve talked about in previous episodes, is that one has the freedom to become his or her own bank.
Rather than something to be feared, this is great. Let’s assume, for a moment, that cryptocurrencies are destined to become one of many “next big things.”
Once they slip into the mainstream, we’ll see a blowout of competing currencies and an exchange where we can trade the most stable “reserve” currencies for smaller, more volatile currencies with great potential for growth.
Some of these “altcoins” will fall flat on debut, while others will rise to great heights only to watch their wax wings melt away in the hot sun.
A small select few will rise steadily into usefulness.
The currencies that stick will do so because they are the most equitable. They serve the most people. They solve problems and restrictions placed on the many rather than the few.
This is the secret behind Bitcoin’s success.
Which is why Obama’s right: Bitcoin gives regular people the option of having a “Swiss bank account in their pockets.” But it’s not a benefit of bitcoin. It’s merely a feature.
The benefits of such a thing, though, are immense. And could help the 2.5 billion unbanked individuals — and all of those with money in unsteady banks and volatile currencies — to take control of their money and, ultimately, their lives.
There’s a great story about halfway through Nathaniel Popper’s book, Digital Gold, where the reader meets a man named Wences Casares.
Casares is the founder of coupon app Lemon Digital Wallet. In seeing Bitcoin’s massive potential for developing countries, he played a role in Bitcoin’s rise to pseudo-popularity. Especially in Argentina, his home country, which he returned to often in his early Bitcoin-proselytizing days.
When Wences was in Argentina, he would offer to sell some of his Bitcoins after work at a bar near the Lemon offices. Each time, a different crew of people would show up, but one older gentleman kept coming back, buying a little more each time.
He had a silent, sullen countenance and didn’t seem technologically sophisticated. After the man made a particularly large purchase one day, Wences gently asked him if he understood the risks involved with Bitcoin.
“It seems to me like this is a lot of money, and this is very risky,” Wences told him as politely as he could “You know you could lose it all?”
“How many times has your family lost everything keeping their money in the peso?’ the man asked Wences.
“Three, maybe four times,” Wences said.
“Yes. For me it’s been more times than that,” the man said.
The man admitted that he had the option of putting his money in dollars but that this would require him to take a distorted exchange rate and then hide the bills in his closet. And who knew when the dollar might suffer the same problems as the peso?
“There is no way you can convince me to keep my money in the peso.”
Such is the beautiful promise of Bitcoin and blockchain technology in general. You’re no longer reliant upon governments and banks to do the right thing when it comes to your money and to keep it safe.
You can be your own bank.
It’s part of that “financial liberty” rant we dove into in yesterday’s episode.
Everyone, as Obama so eloquently quipped, can have a Swiss bank account in their pockets.
Here’s a picture of mine…
My pocket-sized Swiss bank account
As you can see, this device is called Trezor.
And it’s the closest thing we have to that famed “Swiss account in your pocket.”
Using state-of-the-art cryptography, Trezor represents the next step in the evolution of money. It allows you to store and spend your money in an environment in which you — and only you — are in control of.
(And now, in an age where cops can pull money from your pre-paid debit cards, this is a pretty important development.)
Trezor is a powerhouse which can’t be hacked, nor can it be infected with malware. All the power lies in the private key, which sits in your hands only. The company that manufactures Trezor can’t even recover your private key if they wanted to.
Best of all, your transactions take place independent of the computer your device is plugged into.
Only you can see and, more importantly, control your cash.
“TREZOR puts a bank in your pocket,” the electronic wallet’s webpage explains. “There are no fees and it’s never closed. While we enjoy relative assurance that when we leave money in a traditional bank it will stay there, we are not in control of our money. The open source TREZOR puts money in your hands.”
If you’re a Bitcoin fan, or are interested in dipping a toe in, the Trezor device is worthy of a look.
To your financial liberty.
See you tomorrow,
Managing editor, Laissez Faire Today
P.S. Have something to say? Say it! Chris@lfb.org.