• Leon Wankum writes about how the ability to preserve wealth gave modern humans the edge in evolutionary competition and how different wealth preservation technologies have been used throughout history.
• He compares four common wealth preservation technologies today (gold, bonds, real estate and equities) to bitcoin to show why they underperform and how efficiently bitcoin can help us save and plan for our future.
• He also references Nick Szabo’s essay “Shelling Out: The Origins of Money” to explain why population explosions occurred when homosapiens displaced neanderthalensis in Europe circa 40,000 to 35,000 B.C.
In the modern world, the ability to preserve wealth is integral to the progress and development of any society. Leon Wankum, one of the first financial economics students to write a thesis about Bitcoin in 2015, believes this to be true and has studied the history of wealth preservation technologies to prove it. In his essay, Wankum references Nick Szabo’s essay “Shelling Out: The Origins of Money” to explain why population explosions occurred when homosapiens displaced neanderthalensis in Europe circa 40,000 to 35,000 B.C. Szabo explains that the newcomers, homosapiens, had the same size brain, weaker bones and smaller muscles than the neanderthals, but the biggest difference may have been wealth transfers made more effective or even possible by collectibles. Evidence from a burial at Sungir, Russia, 28,000 BP shows that homosapiens sapiens took pleasure in collecting shells, making jewelry out of them, showing them off and trading them. This led to Wankum’s conclusion that the capability to preserve wealth is one of the foundations of human civilization.
Throughout history, there have been a variety of wealth preservation technologies that have constantly changed and adapted to the technological possibilities of the time. Wankum looks at the four most commonly used wealth preservation technologies today (gold, bonds, real estate and equities) to compare them to Bitcoin to show why they underperform and how efficiently Bitcoin can help us save and plan for our future. He looks at each technology separately and in detail, starting with gold. Gold has been used as a form of wealth preservation for centuries, and is still used by many people for its stability and security. Gold can be bought and sold, and its price is determined by the market. Bonds are another commonly used wealth preservation technology. Bonds are debt instruments issued by governments and corporations. They offer a fixed rate of interest, which can make them a more attractive option than stocks and gold. Real estate is another popular form of wealth preservation, and can be a great way to diversify a portfolio. Real estate investments can provide steady income, and can be profitable in the long term. Finally, equities, or stocks, are one of the most popular forms of wealth preservation. Stocks offer the potential for high returns, but also come with the risk of loss. Wankum specifically looks at ETFs as equity instruments used as a means of long-term savings.
Finally, Wankum looks at Bitcoin as a wealth preservation technology. Bitcoin is a digital currency that operates on a decentralized, peer-to-peer network. It has no central authority or banks, and transactions are encrypted and secure. Bitcoin is also free of government interference, so it is seen as a safe haven for investors who are looking to preserve their wealth. Bitcoin is also highly liquid and can be converted into other currencies quickly and easily. Bitcoin is a relatively new form of wealth preservation technology, and the potential for it to grow and become even more widely accepted is immense.
Overall, Wankum’s essay provides a detailed and informative look at the history of wealth preservation technologies and how Bitcoin can be used as a beneficial tool for saving and planning for the future. He presents a compelling argument for why Bitcoin has the potential to be a more efficient and secure form of wealth preservation, and encourages readers to consider the advantages of this new technology.