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It's Friday, April 29 2022. I'm Joshua Claycamp. And this is the observer a reflection upon the news from a biblical perspective, in order to help Christians understand how we need to think and feel about current events.
This week Ottawa made the announcement that the Liberal government was going to follow up on its plan to permanently subject crowdfunding platforms to its anti money laundering and terrorist financing regime, a measure that had been initially put in place in response to the freedom convoy, which took place last February. Black locks reporter first reported this issue on April 28, saying quotes Canada's Financial Intelligence Agency FINTRAC says The platforms are now required to register with FINTRAC as well as develop and maintain a compliance program, carry out a know your client requirements and keep certain records such as related to transactions or client identification. This is all very interesting to me, and I'm sure it is to you as well. One of the curiosities that we all witnessed during the freedom convoy blockade of Ottawa during February was the fact that these freedom, these freedom, protesters were able to be financed, were able to buy fuel and were able to get food and other provisions as a result of cryptocurrency and crowd sourced funding utilizing the two major websites, most notably Go Fund Me, as well as the Christian version of GoFundMe, which is known as gifts and go this, this whole financial transaction appeared to be rather secure, because that is the reputation and the legacy of crypto.
And stunningly, as the government invoked the Emergency Powers Act, it became readily apparent to all that the government was actually able to track their cryptocurrency where it was going, how it was being dispersed, they were able to seize various, what are known as wallets, and were able to track exactly where that crypto was downloaded, so to speak, and converted into cash. And they were able in tracking all of these things to seize these accounts to seize these funds. And to stop those funds from continuing to be utilized to finance the freedom convoy. What was interesting to me was that Kryptos reputation is that of being anonymous untrackable secret. And yet, as we saw in February, that reputation was an outright lie, it is apparent that anyone can track it. These are public Ledger's that are available to anyone. And it's simply a matter of knowing where to look and how to understand what you're looking at. If you and I are able to do this, then the government is surely able to do it as well. All of this leads me back to a deeper theological question. What exactly is it that we are doing when we use crypto and I thought that today on the observer, we would take a little bit of a deeper dive on this, especially because this issue is propping up in other places as well.
For example, this last week, it was suggested that crypto is just one big Ponzi scheme. On Tuesday, Sam bank Ben freed founder of ft x, which is a huge cryptocurrencies exchange, opened a giant can of worms by describing quote unquote, yield farming, which is Kryptos makeshift alternative to traditional bank lending. He described it as a Ponzi scheme. He said, quote, you start with a company that builds a box. He said in the latest episode of Bloomberg, odd lots podcast, he said, you start with a company that builds a box. And maybe for now, you just actually ignore what is does or you pretend that this box does literally nothing. It doesn't matter what the box does. You just start with a company that builds a box, and you pour another $300 million into the box, and you get a Psych and then it goes on to infinity. And then everyone makes money. That is a particularly disturbing comment coming from Sam Venkman freed especially as he is the founder and the operator of one of the largest cryptocurrency exchanges in the world. A stunned guest host and a journalist by the name of Matt Lavon replied to Sam Venkman fried with the following he said quote, that was so much more cynical than how I would have ever described crypto farming. You're just like, well, I'm in the Ponzi business and it's pretty good and quote, yes, this actually happened. Here was one of the most prominent figures in the crypto space on an extremely popular and widely listened to financial podcast openly He admitting that a major part of his crypto exchange business his cryptocurrency exchange business was simply a sham. Defining whether or not something is or has become a Ponzi scheme. That Well, it's it's a long forgotten practice, it involves working out if an investments underlying structure creates a negative sum game, with regulated securities, such as what you'd buy on the stock market, we're talking stocks and bonds, here's investors receive a combination of interest payments or dividends, cash flows, these types of things that businesses have because of the products or the goods that they that they sell or the services that they engage in. And so with those interest payments with those dividends and cash flows, at the very least, we know that there is a zero sum endeavor going on there. So with crypto, however, investors don't receive any of these things, they only benefit from a potential rise in the price of the crypto. So when you buy a crypto coin, you buy it at a certain price. And because there are a limited number of crypto coins or bitcoins in the world, the idea is that when you buy one at a certain price, more and more individuals will become interested in this crypto. And as they buy in, the demand increases relative to supply. And since the supply is fixed, but the demand is increasing, the cost of that crypto will go up. And essentially, that's what Sam black, black Venkman fried was saying on his on the podcast, the Bloomberg podcast, the odd lots podcast on Bloomberg.
He was saying that essentially, you you just create a company that makes a box, he was just talking generically here. And he says you just create a lot of hype, his exact word was a lot of psych around this box, and everybody starts throwing money at it. And then he says it goes up to infinity. In other words, there's nothing actually in the box, it doesn't matter what the box does, it doesn't matter if there's an actual product or a good or a service, something that has real value in the box, it's just a box, and you create a sense of value by throwing money at it. You then communicate that value, that sense of value, though illegitimate to others, they throw money at it. And then the price of this box goes up and up and up and up. And now everybody cashes in on this sort of thing. But there's no actual value being created. This is where we as Christians have to step back and say, this actually is a violation of a Christian understanding of currency. You see, when we talk about money as Christians, one of the things we need to remind ourselves is that money is not, in and of itself, the goal of what God has called us to do. In Genesis chapter three, God tells his people, he tells Adam and Eve, that they're to go forth to their to multiply to be fruitful, to fill the earth, to subdue it, and to have dominion over it. And the idea here is that we're going to take this world and we're going to exert ourselves upon it, we're going to work it in the sense that Adam was called to work in a garden. And from it, we're going to help bring the earth to a place where having cultivated it, having labored in it, watered it so forth and so on, and now will produce fruit for us it will yield a crop, we will be able to generate a harvest. In other words, we're to take a field to put it in pure agri agrarian concept, we're going to take a field and we're in a work that field till that field, it is just a field that produces nothing of value, it's just grass, it's just an open field. At best, all we can do is send some sheep or some goats or some other livestock into it to eat the grass. But where to take that field, where to tell it, where to plant it, where to sow seed into it were to weed it and care for it in such a way that over time, what was once just a field full of grass will become a field full of crops that we can then eat. In other words, we give our energy and our time and our labor to the field and from the field. We produce something useful. That's what's going on with money.
You see, we can't all just trade and barter in terms of crops. That really restricts the fluidity of our ability to engage in economic transactions. I may not want a bunch of beets. I may not want a bunch of beans. I may be in the business of growing cabbage. You may be in the business of growing beets and I may work at growing a bunch of cabbage. And I may come to you and say I'd like to trade some cabbage for some of your beets or some of your beans. And you may say, I don't want to any cabbage, therefore, I'm not going to give you any of my beets, or my beans, we've given ourselves to our own respective crops. And we can't all actually trade those crops with each other. Because that is limiting the amount of transactions that can take place since only a limited number of individuals are going to want my cabbage or your beans or beets as the case may be. And so rather than giving ourselves to a crop and using that crop as our currency, we give ourselves to something that will transcend different crops or different products or different goods, different different services, we give ourselves then to cash. And what that means is we go out and we work we give our labor, we give our time, we give our energy to a particular endeavor, whatever that endeavor is, and then we convert that into cash. Cash corresponds to a value that has been created through the giving of energy, time, and resources. So when I labor, my labor is purchasing cash for me, in the same way that if I were to work in a field, I would from that field, pull out some kind of a crop, when it comes to money, old fashion, Canadian loonies, and toonies. When I work, I generate an income, someone is going to pay me for that work, and they're going to pay me in cash, they're going to pay me and loonies and toonies.
Now, of course, in this day and age, it's far more secure, to hold that cash within a bank. And so there might be an electronic transfer of funds from one bank account to the other, but the principle remains the same, I am buying money with my labor. And what that is doing is converting my labor into an asset or a resource, notably cash in this particular instance, that I can then use to go and barter or trade for other things that I might want, because everybody is willing to give whatever it is that they have grown, or produced or created for cash, cash is the universal transaction material it is what we can trade with it is what we can barter with. Coming back to the issue of Bitcoin. Well, Bitcoin, it's not universally welcomed. And Bitcoin, though it is a bit of a currency, it doesn't necessarily hold value in all cultures in all places at all times. One of the things we need to think about as we evaluate the value of Bitcoin, is that it's a little bit of a tricky, a tricky technology. When we are evaluating technology, one of the things that we need to do is we need to ask a series of questions. Whenever there's a new technology, you need to ask the question, what problem does this new technology try to solve? For example, the rise of social media initially solve the problem of delayed communication with loved ones, we were able to post pictures, send messages, see each other online and perhaps text message with each other, or we're engaged in Facebook messenger, messenger messages with each other. And so this technology didn't necessarily solve a problem so much as it greatly accelerated and enhanced communication. So when we look at technology, the first question we have to ask is, if this is a good technology, does it solve a problem? What does it actually solve? You know, does it actually solve that problem?
But then there's another question we need to ask, what are the costs that come with this technology? In other words, what are we actually having to pay or give up? Or what kind of other additional inconvenience Are we having to live with? In order to have this technology? With Bitcoin? what we realize is that the problem it sets out to solve isn't really solved all that well. The fundamental problem that Bitcoin claims to solve is the ability to have quote unquote, peer to peer electronic money transfers, that don't go through a financial institution, in a similar way to how cash works peer to peer. So the idea is you want to have the anonymity of cash, which is not tracked and cannot be known with any degree of certainty. But you want to be able to have the convenience of sending this cash near instantaneously across a distance of 1000s of miles the way you could would say, a digital transfer of cash from one bank account to the other. In this case, Bitcoin attempts to solve that problem in the initial white paper, the primary motivations for Bitcoin as laid out In the very first white paper that was ever written about Bitcoin, the primary motivations for Bitcoin are the need to avoid giving your trust and your personal information with that to intermediaries. It also will solve the problem of reducing transaction costs by reducing costs associated with large institutions such as banks. And it also is attempting to deal with fraud that could be caused by reversible transactions. So the idea is that Bitcoin is irreversible. So in evaluating Bitcoin, we should primarily be comparing it to other payment systems, such as physical cash and electronic payments and banking systems, and evaluating it against those other forms of payments. By asking those questions, does this technology solve the problems that it claims to solve? Well, in evaluating Bitcoin one, one things we find is that cash is a very convenient form of payment that takes seconds to complete, is highly reliable and has a very high degree of privacy, it suffers only from the inconvenience and the insecurity of having to carry around a substantial amount of cash with you at all times. And as a result of that, it is increasingly being replaced by electronic funds transfers. And those electronic funds transfers work extremely well. For example, in a grocery store, I can pay for groceries electronically, using a debit card and a pin, or with the newer cards these days, I don't even need my pin, I can just swipe it, and it will beep and it will take a few seconds to complete a transaction using my banking debit card, or I could also use a credit card. Now, between friends, I can do Instant bank transfers. And depending on the bank that you use, these are usually free. And I can do that 24 hours a day, seven days a week, I can do that for a small to fairly from small, small amounts, like just a few dollars to fairly large amounts of money, you know, several 1000 10s of 1000s dollars. And I can also do this with other slower systems for even larger amounts.
For example, an individual living in Turkey may have the same interbank transfer transfer system, and it may cost them a few pennies to go international. But as far as we can tell, most countries have something that can go international, you can go from Turkey, to the United States of America, and go from United States of America, and to Canada. And all of this can be done through electronic funds transfers, usually with your bank. And it doesn't generally matter what bank you work with, they all have this ability. So the convenience, however, of using these banks does bring some particular security issues. But one of the beauties of banking is that they have a ton of great features for handling fraudulent activity. For example, if you were to get a call this morning about an unusual credit card charge, within 10 minutes of explaining to the individual on the phone that in fact your that was not you and you had not used your credit card to make that charge within a few minutes of explaining that the credit card will be cancelled by your credit card company, all of the ongoing fraudulent charges will either be blocked or tracked for investigative purposes. And all of the old fraudulent charges are now going to be disputed on your behalf and within a matter of days, you will receive a new card in the mail. Now, there is some significant room for improvement here. You need a bank account in order to do these these electronic transfers, which is to say you have to contract with a bank, you have to give your money to a bank in order to make this happen. And one of the things we see is that banks are capable of blocking certain financial activities, which can be bad if you want to use your money to do something that is valuable to you, but perhaps not valuable to the government. And the government decides that they don't want you using your money in that way. And as a result, they're going to pass some Emergency Powers Act, they're going to just enact it. And as a result, you're being blocked from using your money in that way. And further, you're being persecuted in some other way. So there is that.
And then of course there's also the risk of banks going bust, banks or other third parties that we may route payments through have a pretty clear idea of how we are spending our money. And so we lose out on this idea of anonymity or confidentiality, privacy goes out the window. All that to say banks really aren't perfect, but they are fairly well regulated, and have all the financial worries that you and I have banks stealing or losing our money is probably the least of them. Even if a bank goes bust, we have government protection guarantees and we are guaranteed to some of our money is guaranteed by the government and so we will get some of our money back. However, when we look at crypto assets or Bitcoin in this case, one of the things we need to realize is that all of these protections that we see with large banking institutions They don't exist with Bitcoin. What we get with Bitcoin is the suppose that promise of anonymity and privacy and confidentiality, but none of the protections, none of the guarantees and none of the insurance. However, one of the things we see is that even in the myth of anonymity and privacy, well, we don't even really get that, either. So what exactly is it that we get with Bitcoin or other blockchain systems, I don't think we really get anything to be perfectly candid with you. When it comes to Bitcoin, it doesn't actually produce any kind of value. It it's only value is in its limits, and in the fact that as a currency, and given that there's a limited amount of it, it will go up as more and more individuals want to utilize it. But there's no security with it, there's no insurance with it. And there's no protections, it doesn't really actually cover anything that traditional things cover. And as we see the government, they are just as smart as the next person. And they can track these funds through the digital space. You don't necessarily know where the money is going. But you know, where it was on loaded. And you know, where it's being offloaded, you know where the on ramp is, and you know where the off ramp is. And so when you try to download that digital currency into cold, hard cash in order to use it for your purposes, well, right then and there, the government has you, they can see that they can track that, and they know who you are. And so all of this points back to the fact that when it comes to Bitcoin and digital currencies, there really isn't a lot that is offered that is of any significant benefit. It doesn't really matter that you have cash in your wallet, per se. It only matters if you can take that cash out of your wallet and spend it. And when you do that, with Bitcoin, everybody can see you do it. And therefore you're just buying into Bitcoin, because of a myth of security, not because of any actual security.
But next we come to a issue that I wanted to address. I received a question from one of my listeners, a young man by the name of Brody. Brody writes in and he asks, Pastor Josh, on Monday of this week, you talked about the fact that the federal government invoked the Emergency Powers Act and justice needs to be done, accountability needs to be held, and we need to evaluate whether or not Prime Minister Justin Trudeau is in fact worthy of the office as a result of his invocation of the Emergency Powers Act. We need to evaluate that and determine if there needs to be some sort of judicial proceedings. And then again, on Thursday, you were discussing about the fact that the Conservatives had brought up once again, the issue of the Agha Khan from six years ago, and you sort of chuckled at that Pastor Josh and said that that was not a worthwhile endeavor. So which is it? Does Prime Minister Justin Trudeau need to be evaluated in terms of his commission of crimes? Or are these things which we can dismiss as being petty? That's a great question, Brody, I don't want thank you for asking me that question. And in response to that, I would just like to say that when it comes to anything to do with any of our elected government officials, our government officials need to be held to the same standards is any citizen in Canada, they are not above the law, and they need to be evaluated according to the law. They pass the laws. They're responsible for enforcing the laws to a certain extent, along with the RCMP. And as a result, they're not above it. They are also accountable to it. And we are to be a society that is built on law, everyone must be accountable to the law, when I was speaking to yesterday with regards to the controversy with the Agha Khan, is that this is an issue that was clearly unethical. However, there is no evidence to suggest that Prime Minister Justin Trudeau actually gave money to the AGA Khan's organization in any increased amount, and as a result of his having taken from the Agha Khan, this vacation, which was given to him on the AGA Khan's Island in the Bahamas. Now, this is unethical. Indeed this could have and most likely did sway or influence Prime Minister Justin Trudeau and his evaluation of the AGA Khan's organization.
However, it isn't clear at all from the evidence presented that that being influenced in this way actually resulted in the government giving any additional money to the AGA Khan's organizations. So did Prime Minister Justin Trudeau break the law, he doesn't appear to have broken the law. did he act in a manner that was unethical to the act in a manner that brought ill repute upon his office? With those I can heartily agree, but when we're talking about justice, and when we're talking about holding politicians accountable, we need to recognize that when it comes to law, it isn't so much things that may appear shady or may appear dirty or have a poor reputable look to them. It is actually violating the hard black and white Principles of the law. And so it is with this when we look at the actions of Prime Minister Justin Trudeau, we need to remind ourselves that when we evaluate his activity as the Prime Minister of Canada, there are things that are of a reputational character. And these should be evaluated by the electorate, specially when we have an election that comes up. However, when it comes to prosecuting him for crimes, we need to make sure he's actually broken. The law, there are differences between doing something that just appears bad, versus actually doing something that is illegal, and Christians need to know the difference. I am always grateful to hear from my listeners. And I want to just say thank you to Brody for sending me an email and asking that question. If you have a topic that you would like to see covered on the observer, please feel free to tweet that to me on Twitter or email me. Every Friday, I'm looking forward to responding in depth to any questions or topics or news stories that are of curiosity to you. And if you want to know how Christians need to think and respond to a particular item, I would encourage you to send it to me along with your questions, and I'd be happy to discuss it.
Thanks for listening to the observer. And once again, I'm Joshua Claycamp. And you can follow me on Twitter by going to twitter.com/joshua Claycamp. The observer is in ministry of First Baptist Church where Christians seek to discern the news differently. For more information on First Baptist Church of Kamloops. Just go to first Baptist kamloops.org. Or for more information on first Baptist classical Academy, a private school where students are educated according to a Christian worldview. Just go to first Baptist classical.org And I'll see you again on Monday for more of The Observer.