Is It OK To Profit From Bitcoin Influence?
This is not an article about selling your bitcoin. Rather, we will be discussing profiteering or being an influencer in Bitcoin. At what point is it acceptable to make a profit for this type of work in Bitcoin? Not using the asset as a store of value, or as a currency like in El Salvador, but as a source for content or another service.
We’re all familiar with the influencers pursuing recycled content, taken from someone else and rebranded as their own; dropping repetitive buzzwords around Bitcoin; or participating in the neverending echo chambers where rising pundits of social media despotism all desperately seek to get in a one liner that could garner them a greater following.
You could say some of those activities apply to me as a writer in the space. But what about those who are truly making a difference? How do we separate simple profiteering from those who enact real change? First, we should discuss why it matters.
A Protocol Of Philosophy
Inherently, Bitcoin is a resistance to controlled power and cults of personality. Centralization and leaders are subject to the single greatest weakness humanity faces: the human element.
Bitcoin is the first solution to the problem of the human element. It is money written in programmatic code that cannot be controlled by anyone and only listens to the established rules accepted by the system. Attempts to resuscitate the human element back into the network are justifiably met by Bitcoin’s immune system.
Bitcoin has an inherent resistance to influencer personalities and applications that do not practice the established ethos of Bitcoin. Why? Arguably, one might consider that much of the dogma within Bitcoin furthers many values, such as freedom, sovereignty, free markets and others. But it also represents a better future for humanity that is only achievable without centralized control of finance, which brings us to…
The First Influencer Of Bitcoin
For those who don’t know, this is the pseudonym of the person or people who developed Bitcoin. The amount of bitcoin held in the wallet controlled by this pseudonymous creator is immense and has never been used. And that’s the point. But why has Satoshi’s Bitcoin largely gone unused?
Because Satoshi left. They disappeared, and we haven’t heard as much as a peep in years. By now, the creator of this platform could have emerged in a stupendous exhibition of ego, shouting “I told you so!” from the mountains as they paraded the streets of Dubai with a receipt for purchasing Apple that they set on fire because they had enough money to do so.
Not only did Satoshi leave, but no wallet holding that substantial amount of bitcoin has ever sold any of it. Satoshi never sold their bitcoin (at least not the majority). The first influencer of Bitcoin never attempted a claim to fame, never pursued their 15 minutes and allowed their bags of wealth to solidify a worldwide network, while Satoshi held those bags for everyone else.
No credit. No podcast. No monetized blog. No YouTube channel making millions. Just the delivery of the only truly decentralized form of finance humanity will ever achieve because the creator walked away.
If the creator of Bitcoin wouldn’t profit from their own name, why should we?
Because Satoshi Built It Into The System
The Bitcoin protocol is maintained every second of the day without compensation for those who provide the single most crucial element of the entire ecosystem: the nodes.
Nodes operate as validators for the network. They keep track of all of the transactions and agree on what consensus is for the entire blockchain. They are low cost to set up, and low cost to maintain. This is what allows decentralization, and simultaneously is what the “block wars” were about. Because the blocks of transactions are so small, a lot of people can afford to run a node.
They are not compensated. Nodes are completely voluntary, and anyone can enter the system, but they are not compensated for the crucial importance of maintaining the network. Much like Satoshi before them, node operators seek the greater good of furthering the network without personal gain (though running a node does allow you to verify your own transactions).
Does all of this mean that Satoshi never wanted anyone to profit? Not even close. They probably used a few bitcoin before vanishing. But we know the system wants people to profit. How?
Nodes maintain the network by validating all of the transactions and giving the “proof” in a proof-of-work system. Miners provide the “work.”
Miners are given a puzzle to solve at the beginning of each block, which comes about every 10 minutes. In a simplified explanation, if the miners can guess the “password” of the block, then they are given the block reward, which is bitcoin. The miner that solves the block is paid in bitcoin. This is very clearly a model for profit. Solve this puzzle, get paid. So, why did Satoshi believe that the miners should be compensated?
Work, effort, resources. In the proof-of-work model, a necessary output of resources is needed to achieve the calculations that result in solving the block. This can result in heavy energy expenses for the miners, depending on how they acquire their energy, most of which is now clean and renewable. They are incentivized to find clean energy and get their costs as low as possible, allowing a greater margin when expending resources into mining Bitcoin.
What’s The Point?
Understanding the mechanisms that allow Bitcoin to operate and understanding its origin allows us to see a very clear message: Profiting in Bitcoin is permissible when following proof of work.
Resources need to be spent. Cost is associated with the efforts put into the craft associated with Bitcoin. Whether it is leading a course to teach people about Bitcoin, creating content in the form of podcasting or vlogging, creating a new hardware wallet, or even developing financial instruments built for institutions — we cannot say that any of these activities, nor their creators, are pure to principle. What we can do is check the block.
Is this particular person, product or company furthering adoption? Is there a focus on premium content and mentorship offered to the community at large? Or do they seem to be making a political position? Perhaps they are using the network of Bitcoin to further their own audience for personal gain?
Once we have determined the motive, we evaluate the work. In mining, the work is considered the expenditure of resources when solving the puzzle. Michael Saylor famously said that “money is energy.” In many ways, this picture allows us to see the obvious: Energy spent away from home provides money. We go to our jobs, expend energy and return with money (ideally). In many ways, energy can be thought of as time and effort put towards the goal of a particular outcome.
If someone is putting real effort into their creation and an audience forms from that creation, that audience very well may have never entered the ecosystem at all. If we can see the resources spent (time and energy), and we can attribute a positive experience to the product or influencer, then It’s up to the community to decide if the product or influencer provides justifiable value. Measure the proof of work.
How Do You Know When It’s Time To Profit?
Passion fuels many of us, but rarely pays rent. We should address the elephant in the room, which is that all of us have bills to pay. It is perfectly justifiable to want to do something you love and pay your bills at the same time.
What is not justifiable is truly profiteering, or taking advantage of a community, nor is having expectations or feelings of being owed something for your contribution.
I was guilty of this.
I’ve been a writer for years, and when I fell in love with Bitcoin and its values, I desperately wanted to be a writer in the space, and I didn’t care how. When I learned I could be a contributor, I craved the option of having a full-time job as a writer. Not because I thought I deserved it, or that I was better than others. I simply wanted to do what I love and be able to pay my bills.
I needed proof of work. More importantly, I needed to understand the ideals of Bitcoin. The possession of a skill does not entitle one to an income for its utilization.
I encourage those who are like me to create, review the feedback of the community and adjust. The protocol, the principles and the protest to the current system — put all of that before your own personal gain. There are moments where we have to contribute selflessly for the sake of others and for ourselves, there are times of strife and sweat equity that allow us to reach a place of reciprocity based on our effort, or resources expended. Quality begets recognition. Recognition favors those worth being recognized.
The nodes aren’t paid but are essential to the continuation of the protocol. I don’t know that I truly understood Bitcoin until I understood this. We must all be a node before we become a miner.
This is a guest post by Shawn Amick. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.