There are several fundamental problems with how money works today:
Modern currencies are issued and controlled by government monopoly, and are therefore vulnerable to mismanagement by policymakers. In particular, the fact that fiat (i.e. government-controlled) money can be printed in limitless amounts has led to frequent and severe episodes of inflation worldwide, exacerbated financial inequality, and fuelled a global debt crisis.
The ability to create money out of nothing also undermines democratic process, by giving governments a way to finance their activities (namely war) without accountability to their citizens.
It is generally impossible to save and transact in fiat money without trusting banks, payment platforms, and other middlemen. These third parties become avenues for extortion, surveillance, and censorship, especially in corrupt or authoritarian regimes.
Despite a globalised economy, modern currencies remain strictly local, imposing significant frictional costs on cross-border transactions – including remittances sent by refugees and migrant workers.
One way to address these problems is to develop an independent and global form of money that requires no central oversight, while allowing people to take sole custody of their funds. Bitcoin is a cryptocurrency (and, indeed, the only major cryptocurrency) designed specifically for this purpose. As a decentralised, finite, and digital asset that is accessible to anyone, Bitcoin offers a way to sidestep the issues associated with modern money, and to weaken the financial stranglehold of even the most authoritarian governments.
However, the philanthropic community has paid very little attention to Bitcoin’s altruistic potential. Mainstream coverage of this topic has also been riddled with misinformation and ignorance. I therefore recommend that Effective Altruism and similar organisations investigate and consider supporting the Bitcoin cause, by:
funding independent Bitcoin developers,
promoting Bitcoin-related discussion, and
analysing Bitcoin’s suitability as a vehicle for investment in long-term altruistic causes.
We are living in a highly anomalous era where the world’s major currencies are based on nothing tangible. For several hundred years until 1971, much of the world operated on various versions of the gold standard, which meant that we used gold for our money.
Gold is perhaps the most successful form of money in human history, mainly because of its resistance to devaluation. While most previous forms of money (e.g. salt, rice, or seashells) eventually grew worthless when it became possible to farm them in industrial quantities, gold has always been difficult and expensive to mine. As a result, there has never been a risk that someone might dilute the value of your savings by flooding the market with large amounts of new gold. In economic parlance, gold is described as having a high stock-to-flow ratio – that is, the amount of it that currently exists (the stock) is far greater than the amount of it that is newly created each year (the flow). This is an essential quality in a monetary medium.
When we eventually started using paper notes (for the sake of convenience), these notes acted simply as cheques that you could swap for physical gold at the bank. However, with people trading increasingly in notes, most gold ended up being centralised and hidden away in bank vaults – and this allowed major governments to get away with printing new quantities of paper currency despite not having enough gold to back them up.
As it became apparent that there wasn’t enough gold to account for all of the dollars/pounds/francs etc. being printed, governments nevertheless set about trying to uphold the value of their paper currencies. The US, for example, banned the swapping of paper notes for gold, then forced its citizens to sell their gold to the Government at below-market prices, and then constructed international agreements where gold could only be bought from overseas using US dollars. However, in 1971, President Nixon finally gave up and ended the gold standard altogether: the Government-issued paper in your wallet no longer represents your ownership of money; it is the money.
As a result, we now live in an age of money enforced solely by fiat – that is, by government decree. Whereas gold was chosen by the market for its sound monetary properties, fiat currencies are valuable only because their use is mandated by their respective governments. Moreover, while the supply (and therefore the value) of gold is governed by real-world constraints, fiat money can be printed in essentially limitless amounts.
Most countries today designate a central bank that has the unique authority to create new money from nothing. The central bank lends this new money to its government or to commercial banks, and decides how much interest to charge for these loans. (This, in turn, puts a floor on the interest rates that commercial banks are able to offer when lending this new money on to other people.) Ideally, governments and central banks work in tandem to manage the circulation of money.
However, the Government’s new status, as sole creator of money and enforcer of its usage, comes with major problems. On the economic front, the option to print money out of thin air has led to runaway debt and rapid currency devaluation around the world – just as it has on every historical occasion that government-backed paper money has been attempted. On the political front, the centralisation of control over money also allows a select group of people to wield, and potentially abuse, enormous amounts of power.
1. How important is this issue?
We’re talking about the nature of money itself, which is the fundamental unit of the economy. The immediate consequences of this issue, as well as its flow-on effects, are therefore extensive:
1.1. Debt spirals
When governments and central banks actively manage the money supply, the broad political incentive is to increase economic activity, by lowering interest rates (to make borrowing cheaper) and encouraging lending and spending. However, this eventually makes the economy unstable as a result of all the debt that people are taking on:
After a while, interest rates can no longer be significantly raised (e.g. to combat inflation), because that would cause mass insolvency.
Any external shock (e.g. a pandemic) quickly threatens to collapse the economy because of all the outstanding debt that now can’t be paid off.
Furthermore, debt accumulates in a vicious cycle: as the amount of societal debt outgrows the amount of money that exists (Figure 1), the only solution is to print and lend even more money – thereby creating more debt.
Figure 1: Total debt (blue line) in the US has been steadily outgrowing the money stock (red line) available to pay it back.
In other words, while the current system gives governments more freedom to print money and inject economic stimulus in the short term, most of this stimulus is required simply to pay down debt that was accumulated in previous rounds of spending. This is inherently unsustainable in the long run.
The world’s major economies are currently navigating the culmination of a long-term debt cycle: an episode that, as explained by Ray Dalio, occurs as debt reaches several hundred percent of GDP, while interest rates hit the zero bound. This creates a politically and socially volatile climate where, historically, massive currency devaluation through money-printing has been the only realistic recourse.
But that leads to the next problem, of…
1.2. Inflation
When you create new money, you dilute the value of the money that already exists. Policymakers do what they can to stop inflation from getting out of hand, but this sort of economic planning is extremely difficult, even assuming that your intentions are good. The number of major inflation episodes has exploded as we’ve moved away from the gold standard, destroying savings and upending societies around the world.
Almost every year, a double-digit percentage of countries grapple with inflation that will cut the value of their currency in half over five years. The start of this trend coincides with the shift towards fiat money (Figure 2).
Figure 2: The shift towards a flexible money supply started with the temporary suspension of the gold standard during World War I (1914), and was completed with the abandonment of the gold standard in 1971. This correlates with an uptick in the number of major inflation episodes seen globally.
Inflation hits the global poor especially hard, and especially frequently: not only are they likelier to be living in economies managed by unelected and self-serving leaders, they also don’t have access to the more reliable assets (e.g. US dollars, gold, or real estate) that their country’s elite typically use to preserve their wealth. To make matters worse, when new money is created, it tends to be received first by the rich, who are able to enjoy its benefits before it has had time to circulate and drive prices upwards. The poor bear the costs of new money, but see none of the benefits.
Even in developed nations, the emphasis on cheap borrowing and spending likely contributes to a short-sighted consumerism that wreaks havoc on the environment. It fuels asset bubbles (and therefore inequality) as those with wealth look for ways to beat the inflation rate. Hyperinflation is a precursor for revolution and war.
1.3. Lack of democratic accountability in government spending
Money creation gives governments a way to finance controversial activities (such as war) surreptitiously through inflation. Instead of imposing taxes and therefore having to justify their expenditure to voters, governments can quietly print and spend what they need, leaving their population to deal with the economic consequences years down the line. Their citizens, in turn, become emotionally and politically disconnected from their government’s actions, the true costs of which are no longer visible.
World War I was famously drawn-out because the participating nations resorted to printing paper currency far beyond what they could back up in gold.
Analysing a century’s worth of data, US Air Force veteran and legal scholar Sarah Kreps found that wars funded by money-printing are 20 per cent more popular than wars funded by taxation. In other words, money-printing blinds voters to the cost of war – and therefore makes them less inclined to pressure their leaders to shorten or avoid conflict.
1.4. Humanitarian issues
Modern money does not provide a realistic means for people to take direct custody of the value that they create. Instead, responsibility for one’s savings and transactions must be outsourced to banks, payment platforms, and other intermediaries.
However, each of these financial middlemen is a potential avenue for extortion, surveillance, and censorship – especially for the majority of the world’s population that lives under authoritarianism. The institutional barrier to entry also means that many people are cut off from the financial system entirely.
Former UN Secretary General Ban Ki-moon declared in 2012 that corruption “prevented 30% of all development assistance from reaching its final destination”. In one Oxfam study, researchers could only verify that 7% of the USD 28 million meant for Ghana between 2013 and 2015 had arrived safely.
Only 7% of global transactions are still carried out with cash (the only private way to transact with fiat money). That number is expected to shrink rapidly, reducing people’s financial privacy to nearly zero.
The user data amassed by online payment platforms WeChat and Alipay (which have over a billion users) reportedly inform government-mandated social-credit scores that regulate people’s everyday behaviour. These systems are based not just on finances, but also on political opinions, identity, and social interactions.
2. How tractable is this issue?
What makes this issue potentially tractable is the existence of a tailor-made solution that requires only development and scaling.
2.1. How Bitcoin could provide a better form of money
Bitcoin was created amidst the Global Financial Crisis, specifically to address the problems listed above. Whereas conventional money consists of centralised and local currencies with unlimited supply, Bitcoin offers a type of money that is:
decentralised: no single entity has the power to manipulate the money supply, to seize your assets, to exclude you from the network, or to censor your transactions;
global: it isn’t confined to any particular jurisdiction;
finite: the number of bitcoins in existence cannot be inflated beyond 21 million; and
digital: it exists purely in computer software, and has no physical form.
Bitcoin is modelled largely on gold: since the asset itself is finite, there is no risk that one’s savings will be diluted by an open-ended increase in the number of bitcoins. Furthermore, there is no central authority that is motivated to devalue Bitcoin in order to manage debt cycles, or to fund wars or corporate bailouts.
However, while gold’s physical bulk led to its eventual centralisation and representation in paper form, bitcoins are massless and transmissible electronically – they are designed to replicate gold’s sound monetary properties in digital form.
It is hoped that Bitcoin can therefore overhaul the global monetary system in a number of ways:
2.1.1. Creating a fairer and stabler global economy
Bitcoin gives people a way to opt out of failing fiat currencies, in favour of a money that is resistant to long-term devaluation. In doing so, it could help to shrink the asset bubbles (such as those in real-estate markets) that commonly result from people’s attempts to escape inflation.
Moreover, Bitcoin aims to create a monetary system that is more befitting of today’s digital and borderless economy. As a global form of money that runs natively on the Internet, it could help people to move more freely around the world, creating more equal competition for labour, and giving workers more of the value that they produce. Wealth would then accumulate in countries that export labour, supporting local businesses and infrastructure.
A Bitcoin-based economy would also likely see the decline of big banks – especially those deemed “too big to fail”. As they lose their special relationship with governments and their control over people’s money, banks and other financial corporations would need to provide useful services, instead of relying on bailouts.
2.1.2. Disincentivising wars
If Bitcoin were to replace fiat currencies as the preferred form of money, it is likely that wars would no longer be financed as easily as they have been for the past century. With governments unable to simply print and borrow more bitcoins behind the scenes, military ventures would likely face greater public scrutiny, and become even more of a last resort than they are today.
2.1.3. Making international development more effective
Bitcoin transactions do not require handling or approval by third-party institutions. As a result, they make it possible for people to receive aid money directly, circumventing potentially corrupt or obstructive middlemen.
Bitcoin could also promote greater financial inclusion. In a world where smartphones outnumber bank accounts, it provides a way for people to save and transact without needing to seek permission – all that is required is an Internet connection.
2.1.4. Undermining authoritarianism and promoting self-sovereignty
Bitcoin allows one to take sole custody of one’s money: your funds are yours alone, usable and accessible from anywhere, simply by means of a password that can be carried in your head. Dictators who refuse to make democratic concessions could therefore face mass capital flight, as their most productive citizens leave for more favourable societies – this time taking their money with them.
2.1.5. Undermining mass surveillance
While the Bitcoin blockchain (the online ledger containing all Bitcoin transactions) is public, payments are made only pseudonymously, and do not require the sort of personal information (e.g. name, bank account, or address) that governments, corporations, and merchants sell or leak on a regular basis.
Further developments to Bitcoin (such as the Lightning Network, Taproot, Graftroot and Schnorr Signatures) are already making it cheaper and easier to send bitcoins privately.
2.2. How Bitcoin works
As for how all of this is achieved at a technical level, I recommend this video by 3Blue1Brown. But here’s my simplified explanation:
Each person has a public key (analogous to an email address) and a private key (analogous to a password). Any bitcoins you own are encrypted to your public key/address. When you want to pay someone, you use your private key to unlock your bitcoins from your public key/address, and then broadcast your proposed transaction to the rest of the Bitcoin community, over the Internet.
The Bitcoin blockchain is a list of all the transactions that have ever been made. It’s by checking this list that we work out who owns how many bitcoins. And it’s only by adding your proposed transaction to the blockchain that it becomes permanent.
So, how does that happen? There are people in the Bitcoin community, called miners, whose job it is to listen out for people’s proposed transactions. Once they’ve received a large enough batch (or “block”) of these proposals, all the miners start competing to validate them – that is, to attach them to the blockchain. For each block of proposed transactions, there exists a certain number that, when combined with the proposed block and fed through a specific cryptographic function, produces a specific desired output. The miners are trying to work out what that correct input number is, but the only way they can do so is by repeated trial and error.
The incentive for each miner is that, if they discover that correct input number first, they receive a block subsidy –that is, alimited number of newly created bitcoins. Importantly, the block subsidy is programmed to decrease gradually as more blocks are validated and appended to the blockchain, which is how we guarantee that there will never be more than 21 million bitcoins in existence. (As for what incentive miners will have to keep validating blocks as the block subsidy shrinks, they also earn a small fee from blockchain transactions.) Bitcoin’s monetary policy is thereby enshrined in code; nobody can change it.
But why such a cumbersome process just to validate transactions? It’s because this is how you prevent fraud despite not having a central authority. Bitcoin follows a protocol known as proof of work: whenever there are two conflicting versions of what the blockchain looks like, the rule is to simply go with the longer one – that is, with the version that has had the most computational work put into creating it. As a result, placing a fraudulent transaction would be too computationally expensive for anyone to do.
Say, for example, that I want to defraud you: I’ve just broadcast a message to you specifically, saying that I intend to pay you a bitcoin – but I don’t broadcast that message to the rest of the network. That way, if I succeed, nobody else will accept that you actually own the bitcoin that I supposedly paid you.
What I’ve just done is create a competing, fraudulent version of the blockchain, and I’m trying to convince you alone that it’s real. The problem for me is that you’re also hearing about the (true) version of the blockchain that everyone else in the network is using. So, how will you decide which version to believe? In accordance with proof of work, you go along with whichever blockchain is longer. That means that, in order to convince you that my fraudulent version is real, I would need to mine transactions and grow my fraudulent blockchain at a fast enough rate that it stays longer than the true version of the blockchain – that is, longer than the version of the blockchain that all the other miners in the network are collectively working on. I couldn’t do it, unless I somehow owned most of the computing power in the Bitcoin community. Almost immediately, you would defer to the true version of the blockchain, and start demanding your money from me.
(Note: the Bitcoin blockchain probably isn’t the surface-level payments layer that most of us will be directly interacting with in the future. In the same way that our current financial system operates in layers, with each layer bulk-settling the transactions recorded in the layer above, the blockchain is intended as the base layer that will permanently settle transactions made at a more superficial level. Still, the option to transact directly on the blockchain is always there, which is the important bit.)
2.3. But why Bitcoin specifically?
At this point, it’s necessary to differentiate Bitcoin from the rest of the crypto universe that was spawned in its wake. Given all the alternative cryptocurrencies (“altcoins”) and blockchain-based products out there, why should we pay special attention to Bitcoin?
2.3.1. Most other cryptocurrencies serve different purposes.
Nearly all of them can be dismissed at the outset, on the grounds of being useless, irrelevant, or simply scams: many people have realised that inventing your own money/technology and convincing others of its utility for five minutes can make you rich. Some altcoins were even launched as a joke.
A few remaining cryptocurrencies are arguably helpful or at least well intended, but specialise in entirely different uses from those of Bitcoin, and therefore operate according to different rules. Taking a look at some of the biggest altcoins (in terms of market capitalisation) currently out there:
Ethereum (along with similar platforms such as Solana) is designed to support various software applications that also make use of blockchains. This is where you’ll hear terms like “decentralised finance” (DeFi), “non-fungible tokens” (NFTs), or “Decentralised Autonomous Organisations” (DAOs).
There’s been some debate over just how useful these applications will be, and whether it even makes sense to use blockchains in this way. It has also been suggested that, even if such uses prove legitimate, they could simply be incorporated into the Bitcoin system in due course. Whatever your view, the point is that these kinds of cryptocurrency aren’t competing with Bitcoin on global monetary reform – which means that their altruistic potential is significantly different.
Stablecoins are cryptocurrencies that (in theory) have their value pegged to that of a stable reserve asset. Tether and US Dollar Coin, for example, are popular stablecoins that are both programmed to be worth 1 USD, always. This offers some respite to people in developing nations who need a way to keep their savings safe (both from the local authorities and from domestic inflation), but who can’t accept the price volatility that is inherent to Bitcoin at this early stage.
Again, however, such altcoins have little relevance to Bitcoin’s long-term objective – the aim of Bitcoin is not to express fiat money as cryptocurrency; it’s to escape fiat money altogether.
Ripple is also primarily a payment network, but one that acts as an intermediary between banks. It confirms transactions using a consensus mechanism operated by bank servers.
This has nothing to do with Bitcoin.
So, if you’ve only ever heard about “crypto/blockchain” in the collective, or if your main exposure to cryptocurrency has been through speculative gambling, then it may not have been apparent why the various cryptocurrencies out there actually exist, and how they differ from one another. However, if the aim is to work out which is best placed to solve the fundamental problem of fiat currency, then one can’t simply treat them as interchangeable – there’s a huge amount of diversity, for better or worse.
(For the same reason, the fact that many altcoins are flawed or fraudulent doesn’t necessitate that the same is true of Bitcoin. The fact that certain stablecoin companies have been accused of misrepresenting their reserve holdings, for example, has absolutely no implications for a grass-roots movement like Bitcoin, since Bitcoin doesn’t have a controlling company, or reserve holdings, or indeed any information about its protocol that could be made secret. The only real mystery surrounding Bitcoin is who on Earth invented it.)
2.3.2. Bitcoin benefits from its network effect.
That said, Bitcoin has seen its share of copycats that ostensibly seek the same objectives as Bitcoin, while claiming to offer improvements in the form of minor tweaks to the original protocol. For example,
Bitcoin XT, Bitcoin Classic, Bitcoin Unlimited, Bitcoin Cash, and Bitcoin Gold are “hard forks” (i.e. alternatives derived from the original Bitcoin code) that use different block sizes from that used by Bitcoin. (The block size refers to the standardised size of each discrete data segment in the blockchain.)
Litecoin is essentially an imitation of Bitcoin, but secures transactions with a different cryptographic algorithm (Scrypt as opposed to SHA-256), and caps its supply of coins at 84 million as opposed to Bitcoin’s 21 million.
However, none of these alternatives has achieved anything like the lasting success of Bitcoin. Of the hard forks, only Bitcoin Cash (currently the 29th-biggest cryptocurrency) has any kind of relevance, while Litecoin has dropped to 21st place after falling out fashion years ago. Bitcoin, on the other hand, has held between 40 and 60 percent of the total cryptocurrency-market capitalisation for the past five years (it used to be above 80 percent when fewer cryptocurrencies existed). This has kept it between 2 and 5 times the size of Ethereum (the second-largest cryptocurrency), and far bigger than any altcoin that is designed for the same purpose as Bitcoin.
The reason for Bitcoin’s dominance is simple: the power of any social network (such as a language, social-media website, or currency) lies not in how difficult it is to create, but rather in the number of people who have opted in to the system. This is especially true of cryptocurrencies, where the security of the network (i.e. the amount of computing power that a malicious actor needs before they can manipulate transactions) grows with the number of participating nodes. Therefore, for any competitor to oust Bitcoin as a decentralised store of value, it would need to be radically better to the point that a critical mass of people would voluntarily abandon a network containing decades’ worth of investment, infrastructure, and security, all of which was responsible for guaranteeing the value of their own assets.
Another issue is that it is difficult to fully replicate Bitcoin’s decentralised structure. It’s impossible to point to any person or group that has significant authority over the Bitcoin network in the long term; as mentioned above, the pseudonymous founder(s) of Bitcoin stayed around only long enough to hatch the idea, before vanishing for good. However, with Bitcoin now having established itself as the leading cryptocurrency, any competitor would need to amass significant resources and personnel in order to build and promote their new system, which would only undermine the narrative that it is a truly decentralised network free from top-down influence.
So, why should we consider Bitcoin specifically as the antidote to fiat money?
It’s by far the most (and perhaps the only) promising candidate. Why would you not?
3. How neglected is this issue?
Global adoption of Bitcoin is still relatively low, but increasing quickly. Much of this is undoubtedly due to mere price speculation, but there are also regions where Bitcoin is gaining public favour for its empowerment of the financially disenfranchised (e.g. in Nigeria, Cuba, Russia, Afghanistan, and Palestine). I think this indicates a need for more people who can accelerate and guide its development.
The Human Freedom Index includes consideration of “access to sound money”. However, as far as I am aware, the Human Rights Foundation is the only charity/non-profit that actively promotes financial sovereignty and the role of Bitcoin in achieving it.
I have seen very little interest in this topic within Effective Altruism. This essay is only the second detailed post on Bitcoin that I can find in this forum (the first one having been published just over a week ago). In my own conversations with EA members, the general reaction to Bitcoin alternates between polite interest and outright scepticism. Given that Bitcoin is a potentially transformative development that is most likely here to stay, I think it is time to study this issue seriously.
4. Suggestions for Effective Altruism and members
4.1. Supporting Bitcoin projects/organisations
A common institutional approach, both within Bitcoin and in similar technical fields, has been to fund independent contributors to open-source Bitcoin projects. Examples include the grant programs by Spiral, OpenSats, and the Human Rights Foundation.
The Summer of Bitcoin is another example worth considering: it’s a global online internship program that introduces university students to open-source development of Bitcoin applications.
That said, I am not aware of any efforts to analyse the cost-effectiveness of such projects.
At an individual level, one could consider working for a Bitcoin-related company (Bitcoiner Jobs is a popular website for such opportunities). I would recommend considering any role that improves the performance, robustness, or accessibility of the Bitcoin network; software engineers are in greatest demand, but there is also a significant need for operations and communications staff.
4.2. Bitcoin as a means of long-term investment for altruistic causes
Of course, there can be no certainty about how well Bitcoin will survive contact with the future. On the other hand, it’s done remarkably well since 2009. If it continues on this trajectory, and succeeds in establishing a new global reserve currency (or something similar), then its potential future upside dwarfs what one risks losing by adding it to the portfolio at this (still very early) stage in its adoption curve. A relatively small investment now could yield a massive altruistic payoff in several decades.
4.3. Education and discussion
Above all, what this topic needs is more awareness and understanding.
An important step that Effective Altruism could take immediately is to initiate informed discussion of Bitcoin on the 80,000 Hours podcast with Rob Wiblin. The first guest I recommend inviting is
Lyn Alden: an engineer and financial analyst who has written many detailed articles on the the workings of Bitcoin, as well as on the macroeconomic context that makes it so compelling right now. Here is one of her more entry-level talks on one of the world’s most popular Bitcoin podcasts.
I also recommend interviewing
Alex Gladstein: Chief Strategy Officer of the Human Rights Foundation. He can tell you about the problems encountered by the billions of people around the world who don’t have access to acceptably stable currencies. He can also tell you about the many people who already use Bitcoin in order to safeguard their financial sovereignty.
Appendix: responses to common criticisms of Bitcoin
8. “If you lose your private key, you lose your bitcoins forever”
Then take care not to lose your private key. Alternatively, use custodial wallets: services where your private keys are held by an institution, similarly to how you might entrust your savings to a bank. Multi-signature wallets also allow you to spread your risk between several keys or people. That said, the option to take sole responsibility for your savings is the fundamental point, and the problem is that it’s not currently available to people who need it.
The altruistic case for Bitcoin
Summary
There are several fundamental problems with how money works today:
Modern currencies are issued and controlled by government monopoly, and are therefore vulnerable to mismanagement by policymakers. In particular, the fact that fiat (i.e. government-controlled) money can be printed in limitless amounts has led to frequent and severe episodes of inflation worldwide, exacerbated financial inequality, and fuelled a global debt crisis.
The ability to create money out of nothing also undermines democratic process, by giving governments a way to finance their activities (namely war) without accountability to their citizens.
It is generally impossible to save and transact in fiat money without trusting banks, payment platforms, and other middlemen. These third parties become avenues for extortion, surveillance, and censorship, especially in corrupt or authoritarian regimes.
Despite a globalised economy, modern currencies remain strictly local, imposing significant frictional costs on cross-border transactions – including remittances sent by refugees and migrant workers.
One way to address these problems is to develop an independent and global form of money that requires no central oversight, while allowing people to take sole custody of their funds. Bitcoin is a cryptocurrency (and, indeed, the only major cryptocurrency) designed specifically for this purpose. As a decentralised, finite, and digital asset that is accessible to anyone, Bitcoin offers a way to sidestep the issues associated with modern money, and to weaken the financial stranglehold of even the most authoritarian governments.
However, the philanthropic community has paid very little attention to Bitcoin’s altruistic potential. Mainstream coverage of this topic has also been riddled with misinformation and ignorance. I therefore recommend that Effective Altruism and similar organisations investigate and consider supporting the Bitcoin cause, by:
funding independent Bitcoin developers,
promoting Bitcoin-related discussion, and
analysing Bitcoin’s suitability as a vehicle for investment in long-term altruistic causes.
0. How we got here: the nature of modern money
(See also this simple explanation by 99Bitcoins, and this comprehensive article by Lyn Alden.)
We are living in a highly anomalous era where the world’s major currencies are based on nothing tangible. For several hundred years until 1971, much of the world operated on various versions of the gold standard, which meant that we used gold for our money.
Gold is perhaps the most successful form of money in human history, mainly because of its resistance to devaluation. While most previous forms of money (e.g. salt, rice, or seashells) eventually grew worthless when it became possible to farm them in industrial quantities, gold has always been difficult and expensive to mine. As a result, there has never been a risk that someone might dilute the value of your savings by flooding the market with large amounts of new gold. In economic parlance, gold is described as having a high stock-to-flow ratio – that is, the amount of it that currently exists (the stock) is far greater than the amount of it that is newly created each year (the flow). This is an essential quality in a monetary medium.
When we eventually started using paper notes (for the sake of convenience), these notes acted simply as cheques that you could swap for physical gold at the bank. However, with people trading increasingly in notes, most gold ended up being centralised and hidden away in bank vaults – and this allowed major governments to get away with printing new quantities of paper currency despite not having enough gold to back them up.
As it became apparent that there wasn’t enough gold to account for all of the dollars/pounds/francs etc. being printed, governments nevertheless set about trying to uphold the value of their paper currencies. The US, for example, banned the swapping of paper notes for gold, then forced its citizens to sell their gold to the Government at below-market prices, and then constructed international agreements where gold could only be bought from overseas using US dollars. However, in 1971, President Nixon finally gave up and ended the gold standard altogether: the Government-issued paper in your wallet no longer represents your ownership of money; it is the money.
As a result, we now live in an age of money enforced solely by fiat – that is, by government decree. Whereas gold was chosen by the market for its sound monetary properties, fiat currencies are valuable only because their use is mandated by their respective governments. Moreover, while the supply (and therefore the value) of gold is governed by real-world constraints, fiat money can be printed in essentially limitless amounts.
Most countries today designate a central bank that has the unique authority to create new money from nothing. The central bank lends this new money to its government or to commercial banks, and decides how much interest to charge for these loans. (This, in turn, puts a floor on the interest rates that commercial banks are able to offer when lending this new money on to other people.) Ideally, governments and central banks work in tandem to manage the circulation of money.
However, the Government’s new status, as sole creator of money and enforcer of its usage, comes with major problems. On the economic front, the option to print money out of thin air has led to runaway debt and rapid currency devaluation around the world – just as it has on every historical occasion that government-backed paper money has been attempted. On the political front, the centralisation of control over money also allows a select group of people to wield, and potentially abuse, enormous amounts of power.
1. How important is this issue?
We’re talking about the nature of money itself, which is the fundamental unit of the economy. The immediate consequences of this issue, as well as its flow-on effects, are therefore extensive:
1.1. Debt spirals
When governments and central banks actively manage the money supply, the broad political incentive is to increase economic activity, by lowering interest rates (to make borrowing cheaper) and encouraging lending and spending. However, this eventually makes the economy unstable as a result of all the debt that people are taking on:
After a while, interest rates can no longer be significantly raised (e.g. to combat inflation), because that would cause mass insolvency.
Any external shock (e.g. a pandemic) quickly threatens to collapse the economy because of all the outstanding debt that now can’t be paid off.
Furthermore, debt accumulates in a vicious cycle: as the amount of societal debt outgrows the amount of money that exists (Figure 1), the only solution is to print and lend even more money – thereby creating more debt.
In other words, while the current system gives governments more freedom to print money and inject economic stimulus in the short term, most of this stimulus is required simply to pay down debt that was accumulated in previous rounds of spending. This is inherently unsustainable in the long run.
The world’s major economies are currently navigating the culmination of a long-term debt cycle: an episode that, as explained by Ray Dalio, occurs as debt reaches several hundred percent of GDP, while interest rates hit the zero bound. This creates a politically and socially volatile climate where, historically, massive currency devaluation through money-printing has been the only realistic recourse.
But that leads to the next problem, of…
1.2. Inflation
When you create new money, you dilute the value of the money that already exists. Policymakers do what they can to stop inflation from getting out of hand, but this sort of economic planning is extremely difficult, even assuming that your intentions are good. The number of major inflation episodes has exploded as we’ve moved away from the gold standard, destroying savings and upending societies around the world.
Almost every year, a double-digit percentage of countries grapple with inflation that will cut the value of their currency in half over five years. The start of this trend coincides with the shift towards fiat money (Figure 2).
At the time of writing, at least 2 billion people are living in countries that are experiencing double- or triple-digit CPI inflation. This is up from 1.2 billion in early 2021.
Inflation hits the global poor especially hard, and especially frequently: not only are they likelier to be living in economies managed by unelected and self-serving leaders, they also don’t have access to the more reliable assets (e.g. US dollars, gold, or real estate) that their country’s elite typically use to preserve their wealth. To make matters worse, when new money is created, it tends to be received first by the rich, who are able to enjoy its benefits before it has had time to circulate and drive prices upwards. The poor bear the costs of new money, but see none of the benefits.
Even in developed nations, the emphasis on cheap borrowing and spending likely contributes to a short-sighted consumerism that wreaks havoc on the environment. It fuels asset bubbles (and therefore inequality) as those with wealth look for ways to beat the inflation rate. Hyperinflation is a precursor for revolution and war.
1.3. Lack of democratic accountability in government spending
Money creation gives governments a way to finance controversial activities (such as war) surreptitiously through inflation. Instead of imposing taxes and therefore having to justify their expenditure to voters, governments can quietly print and spend what they need, leaving their population to deal with the economic consequences years down the line. Their citizens, in turn, become emotionally and politically disconnected from their government’s actions, the true costs of which are no longer visible.
World War I was famously drawn-out because the participating nations resorted to printing paper currency far beyond what they could back up in gold.
Despite its frequent military activity, the US has not levied any war taxes since 1967 (during the Vietnam War). Instead, it has preferred to rely on cheap borrowing made possible by a combination of money-printing and interest-rate manipulation. This has allowed the US to spend over USD 6 trillion on its “credit card”/ “forever” wars in the Middle East and Asia since 2001 – a bill that would equate to over USD 47,000 per household if the US taxpayer had been asked to finance these ventures directly.
Analysing a century’s worth of data, US Air Force veteran and legal scholar Sarah Kreps found that wars funded by money-printing are 20 per cent more popular than wars funded by taxation. In other words, money-printing blinds voters to the cost of war – and therefore makes them less inclined to pressure their leaders to shorten or avoid conflict.
1.4. Humanitarian issues
Modern money does not provide a realistic means for people to take direct custody of the value that they create. Instead, responsibility for one’s savings and transactions must be outsourced to banks, payment platforms, and other intermediaries.
However, each of these financial middlemen is a potential avenue for extortion, surveillance, and censorship – especially for the majority of the world’s population that lives under authoritarianism. The institutional barrier to entry also means that many people are cut off from the financial system entirely.
Former UN Secretary General Ban Ki-moon declared in 2012 that corruption “prevented 30% of all development assistance from reaching its final destination”. In one Oxfam study, researchers could only verify that 7% of the USD 28 million meant for Ghana between 2013 and 2015 had arrived safely.
In 2020, migrant workers and refugees sent USD 700 billion home to support loved ones (with USD 539 billion of that going to low- and middle-income countries). However, approximately 6% (or USD 42 billion) of that was consumed solely by exchange rates and tariffs – that is, by frictional costs associated with having to go through local institutions. This is a significant amount for those who don’t have money to spare.
According to organisations such as GiveDirectly and the World Bank, direct cash transfers are one of the most effective ways to deliver aid. However, over a quarter of people in developing economies do not have access to the financial system.
Only 7% of global transactions are still carried out with cash (the only private way to transact with fiat money). That number is expected to shrink rapidly, reducing people’s financial privacy to nearly zero.
The user data amassed by online payment platforms WeChat and Alipay (which have over a billion users) reportedly inform government-mandated social-credit scores that regulate people’s everyday behaviour. These systems are based not just on finances, but also on political opinions, identity, and social interactions.
2. How tractable is this issue?
What makes this issue potentially tractable is the existence of a tailor-made solution that requires only development and scaling.
2.1. How Bitcoin could provide a better form of money
Bitcoin was created amidst the Global Financial Crisis, specifically to address the problems listed above. Whereas conventional money consists of centralised and local currencies with unlimited supply, Bitcoin offers a type of money that is:
decentralised: no single entity has the power to manipulate the money supply, to seize your assets, to exclude you from the network, or to censor your transactions;
global: it isn’t confined to any particular jurisdiction;
finite: the number of bitcoins in existence cannot be inflated beyond 21 million; and
digital: it exists purely in computer software, and has no physical form.
Bitcoin is modelled largely on gold: since the asset itself is finite, there is no risk that one’s savings will be diluted by an open-ended increase in the number of bitcoins. Furthermore, there is no central authority that is motivated to devalue Bitcoin in order to manage debt cycles, or to fund wars or corporate bailouts.
However, while gold’s physical bulk led to its eventual centralisation and representation in paper form, bitcoins are massless and transmissible electronically – they are designed to replicate gold’s sound monetary properties in digital form.
It is hoped that Bitcoin can therefore overhaul the global monetary system in a number of ways:
2.1.1. Creating a fairer and stabler global economy
Bitcoin gives people a way to opt out of failing fiat currencies, in favour of a money that is resistant to long-term devaluation. In doing so, it could help to shrink the asset bubbles (such as those in real-estate markets) that commonly result from people’s attempts to escape inflation.
Moreover, Bitcoin aims to create a monetary system that is more befitting of today’s digital and borderless economy. As a global form of money that runs natively on the Internet, it could help people to move more freely around the world, creating more equal competition for labour, and giving workers more of the value that they produce. Wealth would then accumulate in countries that export labour, supporting local businesses and infrastructure.
A Bitcoin-based economy would also likely see the decline of big banks – especially those deemed “too big to fail”. As they lose their special relationship with governments and their control over people’s money, banks and other financial corporations would need to provide useful services, instead of relying on bailouts.
2.1.2. Disincentivising wars
If Bitcoin were to replace fiat currencies as the preferred form of money, it is likely that wars would no longer be financed as easily as they have been for the past century. With governments unable to simply print and borrow more bitcoins behind the scenes, military ventures would likely face greater public scrutiny, and become even more of a last resort than they are today.
2.1.3. Making international development more effective
Bitcoin transactions do not require handling or approval by third-party institutions. As a result, they make it possible for people to receive aid money directly, circumventing potentially corrupt or obstructive middlemen.
When the Maduro regime blocked foreign aid shipments from entering Venezuela in 2019, relatives and human-rights groups abroad were nevertheless able to send millions of dollars into the country in the form of Bitcoin payments.
Bitcoin could also promote greater financial inclusion. In a world where smartphones outnumber bank accounts, it provides a way for people to save and transact without needing to seek permission – all that is required is an Internet connection.
2.1.4. Undermining authoritarianism and promoting self-sovereignty
Bitcoin allows one to take sole custody of one’s money: your funds are yours alone, usable and accessible from anywhere, simply by means of a password that can be carried in your head. Dictators who refuse to make democratic concessions could therefore face mass capital flight, as their most productive citizens leave for more favourable societies – this time taking their money with them.
2.1.5. Undermining mass surveillance
While the Bitcoin blockchain (the online ledger containing all Bitcoin transactions) is public, payments are made only pseudonymously, and do not require the sort of personal information (e.g. name, bank account, or address) that governments, corporations, and merchants sell or leak on a regular basis.
Further developments to Bitcoin (such as the Lightning Network, Taproot, Graftroot and Schnorr Signatures) are already making it cheaper and easier to send bitcoins privately.
2.2. How Bitcoin works
As for how all of this is achieved at a technical level, I recommend this video by 3Blue1Brown. But here’s my simplified explanation:
Each person has a public key (analogous to an email address) and a private key (analogous to a password). Any bitcoins you own are encrypted to your public key/address. When you want to pay someone, you use your private key to unlock your bitcoins from your public key/address, and then broadcast your proposed transaction to the rest of the Bitcoin community, over the Internet.
The Bitcoin blockchain is a list of all the transactions that have ever been made. It’s by checking this list that we work out who owns how many bitcoins. And it’s only by adding your proposed transaction to the blockchain that it becomes permanent.
So, how does that happen? There are people in the Bitcoin community, called miners, whose job it is to listen out for people’s proposed transactions. Once they’ve received a large enough batch (or “block”) of these proposals, all the miners start competing to validate them – that is, to attach them to the blockchain. For each block of proposed transactions, there exists a certain number that, when combined with the proposed block and fed through a specific cryptographic function, produces a specific desired output. The miners are trying to work out what that correct input number is, but the only way they can do so is by repeated trial and error.
The incentive for each miner is that, if they discover that correct input number first, they receive a block subsidy – that is, a limited number of newly created bitcoins. Importantly, the block subsidy is programmed to decrease gradually as more blocks are validated and appended to the blockchain, which is how we guarantee that there will never be more than 21 million bitcoins in existence. (As for what incentive miners will have to keep validating blocks as the block subsidy shrinks, they also earn a small fee from blockchain transactions.) Bitcoin’s monetary policy is thereby enshrined in code; nobody can change it.
But why such a cumbersome process just to validate transactions? It’s because this is how you prevent fraud despite not having a central authority. Bitcoin follows a protocol known as proof of work: whenever there are two conflicting versions of what the blockchain looks like, the rule is to simply go with the longer one – that is, with the version that has had the most computational work put into creating it. As a result, placing a fraudulent transaction would be too computationally expensive for anyone to do.
Say, for example, that I want to defraud you: I’ve just broadcast a message to you specifically, saying that I intend to pay you a bitcoin – but I don’t broadcast that message to the rest of the network. That way, if I succeed, nobody else will accept that you actually own the bitcoin that I supposedly paid you.
What I’ve just done is create a competing, fraudulent version of the blockchain, and I’m trying to convince you alone that it’s real. The problem for me is that you’re also hearing about the (true) version of the blockchain that everyone else in the network is using. So, how will you decide which version to believe? In accordance with proof of work, you go along with whichever blockchain is longer. That means that, in order to convince you that my fraudulent version is real, I would need to mine transactions and grow my fraudulent blockchain at a fast enough rate that it stays longer than the true version of the blockchain – that is, longer than the version of the blockchain that all the other miners in the network are collectively working on. I couldn’t do it, unless I somehow owned most of the computing power in the Bitcoin community. Almost immediately, you would defer to the true version of the blockchain, and start demanding your money from me.
(Note: the Bitcoin blockchain probably isn’t the surface-level payments layer that most of us will be directly interacting with in the future. In the same way that our current financial system operates in layers, with each layer bulk-settling the transactions recorded in the layer above, the blockchain is intended as the base layer that will permanently settle transactions made at a more superficial level. Still, the option to transact directly on the blockchain is always there, which is the important bit.)
2.3. But why Bitcoin specifically?
At this point, it’s necessary to differentiate Bitcoin from the rest of the crypto universe that was spawned in its wake. Given all the alternative cryptocurrencies (“altcoins”) and blockchain-based products out there, why should we pay special attention to Bitcoin?
2.3.1. Most other cryptocurrencies serve different purposes.
At the time of writing, there are over 20,000 cryptocurrencies in existence.
Nearly all of them can be dismissed at the outset, on the grounds of being useless, irrelevant, or simply scams: many people have realised that inventing your own money/technology and convincing others of its utility for five minutes can make you rich. Some altcoins were even launched as a joke.
A few remaining cryptocurrencies are arguably helpful or at least well intended, but specialise in entirely different uses from those of Bitcoin, and therefore operate according to different rules. Taking a look at some of the biggest altcoins (in terms of market capitalisation) currently out there:
Ethereum (along with similar platforms such as Solana) is designed to support various software applications that also make use of blockchains. This is where you’ll hear terms like “decentralised finance” (DeFi), “non-fungible tokens” (NFTs), or “Decentralised Autonomous Organisations” (DAOs).
There’s been some debate over just how useful these applications will be, and whether it even makes sense to use blockchains in this way. It has also been suggested that, even if such uses prove legitimate, they could simply be incorporated into the Bitcoin system in due course. Whatever your view, the point is that these kinds of cryptocurrency aren’t competing with Bitcoin on global monetary reform – which means that their altruistic potential is significantly different.
Stablecoins are cryptocurrencies that (in theory) have their value pegged to that of a stable reserve asset. Tether and US Dollar Coin, for example, are popular stablecoins that are both programmed to be worth 1 USD, always. This offers some respite to people in developing nations who need a way to keep their savings safe (both from the local authorities and from domestic inflation), but who can’t accept the price volatility that is inherent to Bitcoin at this early stage.
Again, however, such altcoins have little relevance to Bitcoin’s long-term objective – the aim of Bitcoin is not to express fiat money as cryptocurrency; it’s to escape fiat money altogether.
Ripple is also primarily a payment network, but one that acts as an intermediary between banks. It confirms transactions using a consensus mechanism operated by bank servers.
This has nothing to do with Bitcoin.
So, if you’ve only ever heard about “crypto/blockchain” in the collective, or if your main exposure to cryptocurrency has been through speculative gambling, then it may not have been apparent why the various cryptocurrencies out there actually exist, and how they differ from one another. However, if the aim is to work out which is best placed to solve the fundamental problem of fiat currency, then one can’t simply treat them as interchangeable – there’s a huge amount of diversity, for better or worse.
(For the same reason, the fact that many altcoins are flawed or fraudulent doesn’t necessitate that the same is true of Bitcoin. The fact that certain stablecoin companies have been accused of misrepresenting their reserve holdings, for example, has absolutely no implications for a grass-roots movement like Bitcoin, since Bitcoin doesn’t have a controlling company, or reserve holdings, or indeed any information about its protocol that could be made secret. The only real mystery surrounding Bitcoin is who on Earth invented it.)
2.3.2. Bitcoin benefits from its network effect.
That said, Bitcoin has seen its share of copycats that ostensibly seek the same objectives as Bitcoin, while claiming to offer improvements in the form of minor tweaks to the original protocol. For example,
Bitcoin XT, Bitcoin Classic, Bitcoin Unlimited, Bitcoin Cash, and Bitcoin Gold are “hard forks” (i.e. alternatives derived from the original Bitcoin code) that use different block sizes from that used by Bitcoin. (The block size refers to the standardised size of each discrete data segment in the blockchain.)
Litecoin is essentially an imitation of Bitcoin, but secures transactions with a different cryptographic algorithm (Scrypt as opposed to SHA-256), and caps its supply of coins at 84 million as opposed to Bitcoin’s 21 million.
However, none of these alternatives has achieved anything like the lasting success of Bitcoin. Of the hard forks, only Bitcoin Cash (currently the 29th-biggest cryptocurrency) has any kind of relevance, while Litecoin has dropped to 21st place after falling out fashion years ago. Bitcoin, on the other hand, has held between 40 and 60 percent of the total cryptocurrency-market capitalisation for the past five years (it used to be above 80 percent when fewer cryptocurrencies existed). This has kept it between 2 and 5 times the size of Ethereum (the second-largest cryptocurrency), and far bigger than any altcoin that is designed for the same purpose as Bitcoin.
The reason for Bitcoin’s dominance is simple: the power of any social network (such as a language, social-media website, or currency) lies not in how difficult it is to create, but rather in the number of people who have opted in to the system. This is especially true of cryptocurrencies, where the security of the network (i.e. the amount of computing power that a malicious actor needs before they can manipulate transactions) grows with the number of participating nodes. Therefore, for any competitor to oust Bitcoin as a decentralised store of value, it would need to be radically better to the point that a critical mass of people would voluntarily abandon a network containing decades’ worth of investment, infrastructure, and security, all of which was responsible for guaranteeing the value of their own assets.
Another issue is that it is difficult to fully replicate Bitcoin’s decentralised structure. It’s impossible to point to any person or group that has significant authority over the Bitcoin network in the long term; as mentioned above, the pseudonymous founder(s) of Bitcoin stayed around only long enough to hatch the idea, before vanishing for good. However, with Bitcoin now having established itself as the leading cryptocurrency, any competitor would need to amass significant resources and personnel in order to build and promote their new system, which would only undermine the narrative that it is a truly decentralised network free from top-down influence.
So, why should we consider Bitcoin specifically as the antidote to fiat money?
It’s by far the most (and perhaps the only) promising candidate. Why would you not?
3. How neglected is this issue?
Global adoption of Bitcoin is still relatively low, but increasing quickly. Much of this is undoubtedly due to mere price speculation, but there are also regions where Bitcoin is gaining public favour for its empowerment of the financially disenfranchised (e.g. in Nigeria, Cuba, Russia, Afghanistan, and Palestine). I think this indicates a need for more people who can accelerate and guide its development.
The Human Freedom Index includes consideration of “access to sound money”. However, as far as I am aware, the Human Rights Foundation is the only charity/non-profit that actively promotes financial sovereignty and the role of Bitcoin in achieving it.
I have seen very little interest in this topic within Effective Altruism. This essay is only the second detailed post on Bitcoin that I can find in this forum (the first one having been published just over a week ago). In my own conversations with EA members, the general reaction to Bitcoin alternates between polite interest and outright scepticism. Given that Bitcoin is a potentially transformative development that is most likely here to stay, I think it is time to study this issue seriously.
4. Suggestions for Effective Altruism and members
4.1. Supporting Bitcoin projects/organisations
A common institutional approach, both within Bitcoin and in similar technical fields, has been to fund independent contributors to open-source Bitcoin projects. Examples include the grant programs by Spiral, OpenSats, and the Human Rights Foundation.
The Summer of Bitcoin is another example worth considering: it’s a global online internship program that introduces university students to open-source development of Bitcoin applications.
That said, I am not aware of any efforts to analyse the cost-effectiveness of such projects.
At an individual level, one could consider working for a Bitcoin-related company (Bitcoiner Jobs is a popular website for such opportunities). I would recommend considering any role that improves the performance, robustness, or accessibility of the Bitcoin network; software engineers are in greatest demand, but there is also a significant need for operations and communications staff.
4.2. Bitcoin as a means of long-term investment for altruistic causes
One potentially important cause mentioned by 80,000 Hours is the search for an investment vehicle that could fund altruistic causes in the long-term future. What better place to start than by examining an asset that is designed to be the ultimate long-term store of value?
Of course, there can be no certainty about how well Bitcoin will survive contact with the future. On the other hand, it’s done remarkably well since 2009. If it continues on this trajectory, and succeeds in establishing a new global reserve currency (or something similar), then its potential future upside dwarfs what one risks losing by adding it to the portfolio at this (still very early) stage in its adoption curve. A relatively small investment now could yield a massive altruistic payoff in several decades.
4.3. Education and discussion
Above all, what this topic needs is more awareness and understanding.
An important step that Effective Altruism could take immediately is to initiate informed discussion of Bitcoin on the 80,000 Hours podcast with Rob Wiblin. The first guest I recommend inviting is
Lyn Alden: an engineer and financial analyst who has written many detailed articles on the the workings of Bitcoin, as well as on the macroeconomic context that makes it so compelling right now. Here is one of her more entry-level talks on one of the world’s most popular Bitcoin podcasts.
I also recommend interviewing
Alex Gladstein: Chief Strategy Officer of the Human Rights Foundation. He can tell you about the problems encountered by the billions of people around the world who don’t have access to acceptably stable currencies. He can also tell you about the many people who already use Bitcoin in order to safeguard their financial sovereignty.
Appendix: responses to common criticisms of Bitcoin
1. “Bitcoin is too volatile”
“Bitcoin is not too volatile” (Parker Lewis)
2. “Bitcoin uses too much energy”
“Bitcoin’s energy usage isn’t a problem. Here’s why.” (Lyn Alden)
“Bitcoin does not waste energy” (Parker Lewis)
3. “Bitcoin is a Ponzi scheme”
“Bitcoin: addressing the Ponzi scheme characterization” (Lyn Alden)
4. “Bitcoin cannot scale”
“What is the Lightning Network? (Explained Simply)” (99Bitcoins)
“A look at the Lightning Network” (Lyn Alden)
“Bitcoin is not too slow” (Parker Lewis)
5. “Bitcoin is deflationary”
“Deflationary spiral” (Bitcoin Wiki)
6. “[Insert name of altcoin] will oust Bitcoin”
“Analyzing Bitcoin’s network effect” (Lyn Alden)
7. “Bitcoin could be banned”
“Bitcoin cannot be banned” (Parker Lewis)
“Why you shouldn’t be worried about a Bitcoin ban” (Robert Price)
8. “If you lose your private key, you lose your bitcoins forever”
Then take care not to lose your private key. Alternatively, use custodial wallets: services where your private keys are held by an institution, similarly to how you might entrust your savings to a bank. Multi-signature wallets also allow you to spread your risk between several keys or people. That said, the option to take sole responsibility for your savings is the fundamental point, and the problem is that it’s not currently available to people who need it.
See the Bitcoin Wiki for more rebuttals.