Today, governments and central banks have absolute power over money. Now central banks have the right to create money as debt and charge interest on it, while governments can spend as much as they want and devalue money when they need it.

Bitcoin is the first step towards separating money from the state. This is a radical idea that we need to start thinking about and the concept of which needs to be understood.

Over the past 100 years, we have witnessed terrible monetary catastrophes under the control of central banks. These are extreme monetary inflation during the two world wars and hyperinflation, which destroyed the savings of millions of people.

Under the existing central bank mechanism, governments extract wealth from the economy by spending deficits, and banks extract wealth by charging interest on money as they create it by lending. Our problem is that governments control our money, and we and the next generations are forced to pay for things that don't work or that we disagree with.

The separation of money and the state will force governments to work harder to earn our taxes. This will push governments to become more reasonable in how they spend them, ultimately transforming taxation into a voluntary pay-by-results function.

The problem with fiat currency is the trust that is necessary for it to work. The central bank must be trusted not to devalue the currency. Governments with huge funding deficits often resort to the printing press to pay off creditors, causing inflation.

In extreme situations that get out of complete control, hyperinflation can begin. In countries like Venezuela, we are seeing one of the worst cases of hyperinflation in modern history — 10 million percent.

The root problem of a traditional currency is the trust required for it to work. The central bank needs to be trusted not to devalue the currency, but the history of fiat currencies is full of losses of this trust.

Banks need to be trusted to keep our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction of the reserve.

We must trust them with our privacy, trust them to prevent identity thieves from emptying our accounts," Satoshi Nakamoto wrote in 2009.

If you look at the infrastructure investments that are pouring into bitcoin at the institutional level, you will understand that we are preparing for a leap. Too many "smart money" think that bitcoin is not a fad, and that it is designed for the long term.

Only by separating money from the state can society get rid of waves of inflation and recessions and destabilizing economic periods that political messiahs use to spread fear and seize power.

Bitcoin can be a stabilizing force for the financial system. The problem is that most big governments and big banks don't think so. More precisely, they are well aware that if they give up control over money, their power will decrease, they will become extremely weak and will not last long.

People will quickly realize that they have other options and will start paying for competitive goods and services instead of supporting failed monopolies.