Nostr: The Importance of Censorship-Resistant Communication for Innovation and Human Progress
Nostr: The Importance of Censorship-Resistant Communication for Innovation and Human Progress
The Bitcoin Newsletter 26
Welcome to the 26th edition of The Bitcoin Newsletter,
Today, I want to shift focus from Bitcoin and real estate, despite the ongoing work on my book Digital Real Estate. This is because the value storage function traditionally associated with money, today represented by scarce assets like real estate, affects nearly all aspects of human existence, particularly innovation and progress.
However, this discussion is also relevant to Bitcoin and real estate, as it highlights the potential positive social and economic side effects of the demonetization of real estate in favor of bitcoin, something I will explore in great detail in the third and final chapter of my book, which I am currently writing. Newsletter subscribers will be the first to know when the book is published and will receive a special code upon release! I am carefully refining the book in both text and visuals, with close attention to detail. If Bitcoin has taught me anything, it’s the value of a low time preference. Anticipate publication in Q2 2025.
Thanks to advances in encryption, innovative technologies and protocols are emerging that have the potential to change the foundations of our economy and society. At the forefront of this are Bitcoin and Nostr - two groundbreaking protocols that together can usher in a new era of innovation, free from the constraints of the fiat system.
In the 26th edition of the newsletter, I will explore the history and mechanisms that enable Bitcoin and Nostr to act as catalysts for innovation and human progress. Additionally, I have published a long-form article on Habla, a Nostr-based publishing platform, which I used for the first time. This article offers a more comprehensive exploration of the topic, and I will share it at the end of this newsletter for those interested in a deeper understanding of the role that Bitcoin and Nostr can play.
Best regards,
Leon
DEEP DIVE
Nostr: The Importance of Censorship-Resistant Communication for Innovation and Human Progress
How the Fiat System Blocks Human Progress
Historically, scarce money fosters inventiveness and drive, while inflationary money has the opposite effect. In an economic landscape increasingly characterized by inflation, monopolization, and the dominance of institutionalized credit, this trend has fostered a dependence on state funding, compelling individuals to conform to state agendas that often prioritize ideological goals over market needs. This misalignment stifles independent problem-solving and innovation, suppressing creative solutions and misallocating resources.
The fiat-based monetary system makes it difficult for innovation to emerge without institutional funding. Monetary inflation erodes purchasing power, limits financing options, and creates obstacles for new ideas to flourish.
Institutions that typically fund innovation, such as venture capital firms, banks, and universities, often depend on the state, either through regulation or government funding, leading them to support projects aligned with the current political climate. Consequently, this results in a misallocation of capital and social stagnation, observable worldwide
Bitcoin and the weakening state monopoly on innovation
With the introduction of Bitcoin in 2009, the state monopoly on money was broken. Due to its limited supply and excellent monetary properties (absolute scarcity, self-custody, durability, fungibility, divisibility, mobility, resilience), bitcoin is the hardest money ever created. This allows entrepreneurs to preserve the value of their efforts, giving them time and, in the long term, capital to focus on problems and find and fund appropriate solutions. Which, in turn, creates opportunities for innovation to emerge from the free market in a bottom-up manner.
The Role of Censorship-Resistant Communication in Unlocking Innovation
Innovation, especially in the age of the Internet, requires more than capital and people with time. There is a need for efficient and secure real-time communication and collaboration options for people around the world. Communication and collaboration are crucial for efficiently solving increasingly complex problems in a connected world.
Cunningham's Law states that the best way to get the right answer on the Internet is not to ask a question; instead, to post the wrong answer because others will correct you. This underscores the importance of collective intelligence. The law is named after Ward Cunningham, who invented the Wiki software that allows users to create and collaboratively edit web pages or entries via a web browser. The most famous example is wikipdia.com.
Nostr: Communication as a tool for innovation
In late 2019, Lightning developer Fiatjaf published his ideas on a censorship-resistant social network he called Nostr: “Notes and Other Stuff Transmitted by Relays”.
With the actual launch of Nostr shortly after, a protocol that adds a layer of censorship-resistant information-sharing to the Bitcoin and Lightning protocol suite, a new territory of freedom opened up in the same tech-stack as Bitcoin and Lightning.
Although there were a number of other decentralized communication networks besides Bitcoin before Nostr (Bittorrent, Limewire, Napster, etc.), in my view none of them had the potential to have a universal long-term impact on collaboration to solve complex problems facing humanity. Nostr has the potential to enable bottom-up innovation and rapid problem-solving that no one can keep a lid on. With Nostr, Bitcoin, and the Lightning Network, market participants can communicate, collaborate, and reward each other in real time globally, potentially independent of any central authority.
A visual representation of the Nostr protocol, illustrating the interaction between users, applications, and relays, highlighting how information flows in a decentralized, censorship-resistant manner:
Source: Andi Pitt, Ego Death Capital; Nostrica, the start of something big?
Even though individual applications that use Nostr can be switched off, the protocol itself cannot be effectively controlled or turned off by a central party.
Applications connect to many Nostr relays that are run by network participants with technical know-how. These relays distribute information, so if one relay fails, there are others that continue to run. The relays operate largely independently of each other, giving the network resilience because there is no central point of failure. Although Nostr is not based on the Bitcoin blockchain, it utilizes peer-to-peer bitcoin payments via the Lightning Network.
For a long time, I struggled to define the purpose of Nostr beyond its function as a decentralized X. However, I eventually realized that the possibilities are nearly endless. Nostr is a protocol for a freer internet and society, poised to become the gateway to a truly free internet. In this new landscape, we have the opportunity to innovate faster and reward ingenuity, making way for a more empowered and interconnected world.
People can now successfully save in bitcoin, communicate via Nostr, and transact with each other through Lightning, potentially independent of any central authority. In addition, other micropayment solutions and electronic cash systems, such as Cashu, are being developed and implemented on Nostr, further enhancing its capabilities for seamless transactions.
Along with nearly everyone I've spoken to, I am not yet fully capable of grasping what that really means. Especially in view of the increasing dangers that humanity is confronted with in the so-called information age, which could more accurately be termed the disinformation age. Such as misinformation campaigns, AI manipulation, mass surveillance, data privacy breaches, social media echo chambers, inflation, and the erosion of trust in institutions.
If you’re interested in how Nostr, a decentralized protocol for censorship-resistant communication, can help foster collaboration and innovation, I recommend reading my long-format article on Habla News. This platform, which is Nostr based, is one I recently used for the first time. In the article, I explore how the fiat system hinders human progress and why sound money is essential for human flourishing and innovation. I also discuss how Bitcoin breaks the state monopoly on money and how Nostr encourages collaboration and innovation within the free market. The article delves into the history and mechanisms that make this transformation possible.
I would like to thank Uncle R0ckstar for the inspiring conversations and encouraging words.
Find me on Nostr
WORTH TO KNOW
Podcast and publications
TFTC: Real Estate Expert: “Bitcoin Will BREAK The $300T Property Market.”
A couple of weeks ago I had the pleasure of sitting down with Marty for a lively discussion on the TFTC podcast. We delved into topics such as real estate, Bitcoin, individual freedom, the structural problems of the fiat system, and the role Bitcoin can play in addressing these issues. WATCH
The Why Bitcoin Show #67 Leon Wankum - Real Estate & Bitcoin
This month, I had a great conversation with Dale Warburton on The Why Bitcoin Show. Dale, a lawyer by trade who has also worked in the real estate industry, and I discussed the intersection of both asset classes, the intricacies of the Australian real estate market, Bitcoin-backed loans, and how Bitcoin could potentially help solve the housing crisis. WATCH
IDEAS OF INTEREST
Hans-Hermann Hoppe – About Natural Order and its Destruction: This talk is from the 18th Annual Meeting of the Property and Freedom Society, held in Bodrum, Turkey, from September 19 to 24, 2024. In it, Hoppe explains what he describes as the “Natural Order” and how states destroy it. WATCH
Terminal Descent Podcast #1 - AI Dystopia: This episode warns listeners about the potential threats to humanity posed by AI encroachments in our everyday lives. LISTEN
If you want to support me. Feel free. You can send me some satoshi/bitcoin.
Lightning: law@getalby.com
On-chain: bc1qyc9q89wjzmvaw729tj3wsrsfhft53mjycrjxdk
Nostr PubKey
npub1v5k43t905yz6lpr4crlgq2d99e7ahsehk27eex9mz7s3rhzvmesqum8rd9
Resources
Andi Pitt - Nostrica, the start of something big? READ
Photo Credit: Wilbur and Orville Wright. Getty Images.
Disclaimer: the content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Make sure you do your own research before making any investment and be aware of your own risk tolerance. If you like to build on my thoughts, feel free, but please cite me as the source. 2024 - Leon A. Wankum.
Editing and content creation by Clemens Haidinger.
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