Silicon Valley Wants to Become a Bank. We Can’t Let That Happen.
“Disruption.”
Disruption is the synergy of my generation, a word so overused it has lost its impact like an overplayed power ballad. But, disruption is omnipresent in high technology for good reason. It represents a philosophy and business methodology that has created the most powerful brands in the history of the world. Disruption is the stuff of legends, the secret sauce that turns geeks into billionaires. Once mere mortals, the victors of disruption reign supreme as the queens and kings of the universe. From their perch in Silicon Valley, they hear our deepest secrets and send rockets into the sky.
Their strategy is no secret. Startups study a market, create a service ten timers cheaper and/or more valuable than the leaders of that market, and use capital reserves to bleed all would-be competitors of leadership, customers, and revenue. Like the mantra of a leading venture capital firm, “software is eating the world.” If you think your industry is the exception, I’m sorry in advance. Think of the world ten years ago — my, what has changed! Even cultural institutions such as Black Friday Shopping and movie night are fading in memory. We live in the era of Prime Day, of Netflix and chill. No industry is safe. And now, that includes the most powerful industry of all, the lifeblood of industry itself: money.
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If you’re late to the cryptocurrency party, have some kool-aid. A bunch of smart, crazy people have realized that the existing monetary system tricks many people into life-long financial slavery, and we want out! In my country, the United States, most people are taught to seek very expensive (often upwards of $100,000 USD) education and pay for it by taking on debt. These educations allow access to the best jobs in our economy, earning the recent university graduate around half of that debt in annual salary, of which approximately one third is forcibly seized by our government.
Once out of college, many people take on additional debts to purchase important things such as cars and houses. When you add a spouse or children to the picture, earning money becomes paramount to all other things such that debt is simply a byproduct of life itself. This is made extremely convenient by addictive, socially significant products called credit cards. Credit cards are designed by some of the brightest minds on earth to stay in our pockets literally all of the time. They are used to pay for necessities such as urgent medical care, or automobile repairs. Most recent college graduates are unable to pay for these necessities in cash as they tend to spend their wages, garnished by interest payments and taxes, on dysfunctional coping devices like alcohol and Tinder dates.
Many Americans who are the most integral to society, such as social workers and teachers, don’t earn enough money to ever pay off their debts! They live their entire lives in poverty while serving the “greater good”. Most people die with debt, which can be paid posthumously by an insurance policy paid for on a monthly basis by the deceased throughout their lifetimes, mechanically similar to the monthly interest payments on the debt itself. In spite of all this, the United States Dollar is the most culturally significant, desired, and accepted fiat currency in the world. And as a US citizen, I hope that never changes.
How did this cyclical machine come about? Because banks are incentivized, (and very good at) addicting us to debt. Remember those pesky credit cards from earlier? Americans spend nearly $300B USD per year on credit card interest payments alone. Remember when your parents told you to only use credit cards for emergencies? That was about as effective as the D.A.R.E. program was at preventing heroin use. Credit is a drug, and the American Dream is the greatest pusherman on earth. Today, you don’t even need a physical credit card to incur debt. Your consent to incur debt is available at the press of a thumb, on the only device more addictive than a credit card: your smartphone.
I remember the day when Apple released Apple Pay. For a geek like me, it was breathtaking. The greatest company in the world implemented a seamless digital wallet. On that day, I realized that Apple would become a bank. I believe at the time in 2014, Apple Inc’s market cap was around $600B USD. In 2018, Apple Inc became the first publicly traded company in history to reach a market cap of $1T USD. Apple reported almost $250B in cash reserves at the end of 2018. This means they are sitting on $250B dollars they don’t know what to do with. For reference, JP Morgan’s total assets under management is around $2.73T USD. At this rate, Apple may very well be the first company to hold $1T USD in cash. Although they won’t, because it wouldn’t make much sense to sit on that amount of cash. It would be wiser to do something with it, like loan it out to the billions of customers they have direct access to. Now, Facebook has announced LibraCoin, which is marketed as a cryptocurrency, but doesn’t possess any of the characteristics of a cryptocurrency. It is a currency controlled by the very monsters we fight, a wolf in sheep’s clothing.
The giants of Silicon Valley are masters of addiction and persuasion. They use red dots, pings, vibrations, and filters to sneak into every corner of our realities. A cocktail of the human need for validation, our most private moments are altered and made grotesque. Social networks cause broken relationships and all forms of psychosis. We have sacrificed living for likes. Despite an increasingly negative effect on the health of our society, nothing has been done to slow this disease from spreading. Like addicts, we self destruct day after day, feeding into our most primal selves simply to feel okay. And like addicts, our thirst will never be quenched. We are simply drinking from the wrong cup. We will continue to like, follow, and most importantly, buy, in our futile search for fulfillment.
Banks have created a framework upon which Silicon Valley can build the most destructive products ever sold. The disruption of banking by tech giants will inevitably lead to disaster. Banking will become a nightmare. Perhaps our financial status will be listed on our Instagram accounts, giving us the ability to signal our perceived success to the world directly instead of through portraits of big houses and fast cars. The story of financial health will not become better with disruption, it will become far, far worse. But, change is inevitable. So we need an alternative. That alternative is cryptocurrency.
We are at a pivotal point in the economic history of the world. Technological advancement is giving us a shot at redefining what money is in a way that actually makes sense. However, the risk at hand is severe. Consider the internet as a cautionary tale. The internet was the greatest beacon of hope to the proletariat, a system of free speech and international communication that would allow inquisitive youth in Osaka to debate with leading academics in New York. Slowly, we have shrugged off responsibility — and thus control — of this invention to those who would harm us. Mega-corporations and our own government use the internet to censor us, control us, and persuade us. Sadistic minds have turned a tool of liberation into a tool of oppression.
We are facing yet another opportunity to seize our freedom and stand against those who would oppress us. To control money is to control society, and we have an opportunity as individuals to control our own. We cannot lose this battle to the banks of Wall Street, the fascists of Sand Hill Road, or the ignorant in Washington D.C. It is time to take responsibility for our own economic health and learn from our mistakes. If you are seeking refuge from financial helplessness, please do not reach for the newest debt instrument from Silicon Valley.
Buy Bitcoin instead.
To be continued…
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