The Pastor's Heart with Dominic Steele
Christian leaders join Dominic Steele for a deep end conversation about our hearts and different aspects of Christian ministry each Tuesday afternoon.
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The Pastor's Heart with Dominic Steele
Christian Ethics and Bitcoin - with Jeffri Chiam
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How should we guide our congregations in thinking ethically about engagement in Bitcoin?
What is Bitcoin?
How do we as Christian leaders assess the morality of bitcoin?
Proponents say that it’s design fosters transparency and fairness and promotes economic justice.
Critics highlight its speculative risks and potential for illegal use.
Jeffri Chiam is on the team at St Mary’s Cathedral in Kuala Lumpur. In 2024 he completed a final year research project into Bitcoin.
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it is the pastor's heart and dominic steel, and today, the ethics of bitcoin, with jeffrey chiam. How do we guide our congregations in thinking ethically about engagement with bitcoin? What is bitcoin and how do we, as christian leaders, assess morality of it? Proponents say that the design of Bitcoin fosters transparency and fairness and promotes economic justice, whereas critics highlight its speculative risks and potential for illegal use. We haven't yet really wrestled theologically, though, with the ethical issues surrounding Bitcoin, and yet some Christian organizations are accepting donations in Bitcoin and, should they, and some individual Christians are investing in Bitcoin. Jeffrey Chiam is an assistant minister at St Mary's Cathedral in Kuala Lumpur. In 2024, he completed a final year research project into Bitcoin while studying at Sydney Missionary and Bible College. He's with us now. Jeffrey. What is it in your pastor's heart that got you researching this topic? Because I remember trying to talk you out of it.
Speaker 2Yeah, that's a great question, Dominic. My experience with Bitcoin was very mixed. A lot of my friends think that Bitcoin it's the thing that's going to change the world, going to save the economic system, and my interaction with some others say that it's gambling, it's fraud, and I've I realized that more and more people around me are getting into it without really understanding it, without really interacting it with the Bible, and when I research online, there's really limited Christian materials on it and I felt like I have half a year doing a research project. Why not Bitcoin?
Speaker 1So it was also, though, a concern about countries where the economy is more unstable and the currency is more unstable.
Speaker 2Yeah, One of the divisions from my interaction with people is people from currency where it's more stable, like the West, they tend to have a negative impression towards Bitcoin because they don't see the need. But people who are from the global South, they tend to appreciate the value of Bitcoin because more often than not, the government is less trustworthy in some countries and they tend to prefer a decentralized system to secure their work value. Now I want to tackle this issue system to secure their work value.
Speaker 1Now I want to tackle this issue under a couple of headings Firstly, the ethics of the design of Bitcoin and then the ethics of the users who are engaged in Bitcoin and then, if you like, some competing priorities. So let's go to the design. And I mean, I was talking to somebody a day or so ago and I said I was going to be interviewing you about Bitcoin. He said, well, you've got to first start by saying what is it. But I thought, before we start with what is it, let's start with why is it.
Speaker 2Yeah, bitcoin was created 2008, 2009. The backdrop was the global financial crisis. The backdrop was the global financial crisis and a group of people has been thinking through how to navigate the financial crisis and the flaws of current monetary system, where the government is in control, with the central banks, and money printing has been an issue. High inflation has been an issue. High inflation has been an issue and this has been the driving motivation for Bitcoin creator under the name of Satoshi Nakamoto. We don't know whether it's a single person or there's a group of people behind that name that drove Satoshi to create Bitcoin to address the flaw of a system that is highly dependent on a third party, which is the government or the central bank. They hope that a decentralized system can help foster trust again and rebuild that justice.
Speaker 1Now you say decentralized system or new system. I'm always suspicious in these moments because I think surely somebody cleverer than me is going to do something. There's going to be some sneaky selfish thing. That means they're going to be advantaged and I'm going to lose, particularly if I don't know who they are. You know.
Speaker 2Yeah.
Speaker 1And yet, as I read your piece, you seem to be saying the transparency of the decentralized system actually gave us an assurance. Can you speak to that?
Speaker 2Yeah, can you speak to that? Yeah, I think the difference of Bitcoin's decentralized system is that it is the first digital currency that publish all the code online and is accessible. It's able to be audited by firms and experts. Everything is online for you to audit, for you to check and verify.
Speaker 1I'm not an expert in this area, but it has been, but you're persuaded that there is enough auditors out there who say that it is fair, reasonable, all those kind of things.
Speaker 2Yeah, even the Big Four, Deloitte, mentioned in one of their annual report that Bitcoin is one of the more transparent systems and they really command this system because of how easily auditable it is for them that you as a country said we've got this much money because we've got this much gold.
Speaker 1And now increasingly we're seeing governments say well, we haven't got enough gold, we haven't got enough money, so we're just going to print some more. And the difference between Bitcoin and the government that just kind of keeps printing money is that there's a limit of 21 million Bitcoins in the world and the way the thing's been written, more can't be printed.
Speaker 2Yeah, so Bitcoin, it is coded that it will only have 21 million in all of history and, yeah, you can't just change it, unlike fiat money, where the government can print more, can change the law to increase their debt ceiling. So I think that's the main difference. But opponents also argue that for Bitcoin, is it really limited in supply? Because technically you can, because all the codes is online. You can copy the code and create Bitcoin 2.0 or Bitcoin 3.0. But the problem is no one will really trust and use those systems because people will always trust the original version, so that there are for and against argument in terms of the limited supply.
Speaker 1Now, as I was reading on this, how do you get the money? At the beginning, these things called Bitcoin miners. Now, what's a Bitcoin miner, and is it a parallel with a gold miner?
Speaker 2Yeah, I think there's similarity and there's differences. The similarity is that the miners are looking out for a profit resource. The gold miners are looking out for gold. The Bitcoin miners are looking out for new Bitcoin that will be distributed by the system Bitcoin that will be distributed by the system. The difference is how you get it For Bitcoin miner. How they get it is by guessing a long series of code, and if they manage to guess the long series of code, they can combine the latest record of transaction with the existing huge record of transactions and they'd be rewarded for doing that job. We call it proof of work.
Speaker 1So I'm just trying to get this clear when I'm a gold miner, I go to an isolated part of the world and I start digging and I may or may not find gold, and if I got there first, I've got a better chance of finding a bigger block of gold and becoming richer. And it's intrinsically unfair, you know, because the person who finds the gold stumbles on the gold, whatever they get to become rich. But then once we've actually got a pile of gold that actually stands behind our currency, Whereas I think you're saying but a certain amount of energy needs to be spent in order to get that gold, Huge, Huge amounts of energy.
Speaker 1I've got to dig and do mining and all that kind of stuff and I've got to kind of do environmental offsets for my gold mining work and that kind of thing, Whereas in the Bitcoin it's really a computer sitting there coming up with random bits of code and a lot of computing power and so, effectively, a lot of electrical energy and resources in the software and all that kind of thing, but digging for these Bitcoins and you might come across a Bitcoin but you might not.
Speaker 1Yeah, and you've said well, actually, maybe in the past people found lots of Bitcoin quite quickly, but now the mining success rate is we're only finding 0.03% or something of Bitcoin each year.
Speaker 2What is it Now? It's only if you have a supercomputer that's designed for Bitcoin mining that it's possible for you to mine one. Otherwise, it's almost impossible because, it is so competitive. It's like gold mining. If it's that rare and you need to dig, you need special equipment. Normal people like us using our shovel, we can't dig gold anymore.
Speaker 1Yeah.
Speaker 2So, yeah, the analogy applies to Bitcoin, in that our MacBook, our Windows, will not be able to mine Bitcoin anymore. Now.
Speaker 1So okay. So essentially we're saying most of the 21 million Bitcoins have been found 95% about that Right. And I mean actually I do know some people I mean one of my friends they'd invested a little bit of Bitcoin and then they lost their code, and so I mean they said they'd been tracking what they hypothetically would own if they had not lost their code and they keep looking on their hard drives for their code and they keep not being able to find it.
Speaker 2Yeah.
Speaker 1And I think they've lost $15,000 or I don't know what. Something you know. But could somebody else find that code you know or?
Speaker 2Unfortunately, if you are using your own hardware wallet, if you lost that code, it's impossible for you to trace back. But if you are using a company that's running the wallet for you and if you are using them to store Bitcoin for you, it may be possible that they can.
Speaker 1You were telling me about a guy who'd lost billions in that. Tell me about that.
Bitcoin Transparency and Pseudonymity Ethics
Speaker 2Yeah, I think there's this guy in the UK. He stored all his Bitcoin in his hardware wallet. Yeah, Tell me about that. Yeah, I think there's this guy in the UK. He stored all his Bitcoin in his hardware wallet and he dumped it accidentally and after many years, he's still looking up in a garbage site to try to retrieve that billions of Bitcoin that he has lost.
Speaker 1That's really like mining. He's mining for a little bit of hardware that will give him access to billions, and I can see the temptation in going searching through the rubbish dump. Okay, so you're saying there's a transparency about Bitcoin that is actually more attractive than many government-based economic systems.
Speaker 2There's transparency in its code, its operation system, its transactions. Like, let's say, I transfer one Bitcoin to you. It's online, I can't hide it. So how much I own and how much you own In that account, represented in a series of code. Everything is online.
Speaker 1That's a public account, although what does worry me is this whole pseudonymity. Yes, I just said how much I own. How much you own is clear, yeah, but in fact we're using false names.
Speaker 2We're using a series of code.
Speaker 1Right.
Speaker 2Yeah, to protect privacy. So let's say, if I can be identified by this code, then that's full transparency, but if I can't be identified, if I choose to remain pseudonymous, then it really depends on my motivation. I can use this account for good. I can use this account for bad.
Speaker 1So that worries me, because I mean bank accounts in Australia have names attached to them.
Speaker 2Yeah, so modern financial system will require you to know your customer policy. You have to have your photos, your ID. Have know your customer policy. You have to have your photos, your id, um. But bitcoin was created based on this system of series of code, um, so that's a pseudonymity. That system is different from our, the modern financial system that we're used to. But with the gradual legalization of Bitcoin, more and more countries require know-your-customer policy to be in place if you are using Bitcoin.
Speaker 1So, even though Bitcoin, if you like, is pseudonymous, the government of that particular country has said you need to put your name to it.
Speaker 2Yeah, the government. Let's say if you are using a company to buy Bitcoin. Let's say if you are using a trading company to buy Bitcoin, and the company will require you to identify yourself so that all your transactions are verifiable by the regulator which seems sensible in terms of how can you be asked to pay tax if we don't know who you are? Yeah.
Speaker 1And so I can see the pseudonymity promotes me just kind of encourages me to be a tax evader and then think about other illegal things.
Speaker 2Yeah.
Speaker 1Whereas there's something about the transparency of who I am that helps regulate my behavior.
Speaker 2So I think country regulations are catching up with that by implementing more and more laws to protect the risks of pseudonymity more and more laws to protect the risks of pseudonymity?
Speaker 1Are Bitcoin transactions operating outside the law?
Speaker 2It depends on the country. Like China at this moment is completely illegal to use Bitcoin, but in most of the West, the countries have legal provision in place how you can use Bitcoin. So, legally speaking, bitcoin is legal. There's a process like, okay, you have to go through the know, your customer policy, you have to identify yourself. So it really depends on the country you have to identify yourself.
Speaker 1So it really depends on the country. So, based then on the design of Bitcoin, you're giving it overall an ethical tick. Yeah.
Speaker 2I think it has a good heart. I think it was responding to the flaws of the current financial system which we have seen, that it's not working very well at some point. But if you interact with mainstream economies, they will think that Bitcoin still has a long way to prove because it's a very young financial instrument it's just 15 years as compared to money, as compared to gold, which have centuries of history, and whether it can be a valid means of transfer and store of value, the jury is still out there.
Speaker 1Let's dig into the ethics of Bitcoin users a bit more, then. Where are the advantages and where are the risks? Ethically?
Speaker 2I think Bitcoin and money is quite similar in terms of um. People are using it for investment or to protect the work value. Um, though, when it comes to investment, we always have to ask our heart um, how and why are we investing it? For? The Bible is very clear that those who are chasing after hasty profit is condemned, and we should have a long-term, patient mindset towards working towards profit. And Ecclesiastes 11 talks about having a more diversified investment and waiting for a return. So I worry that, with the ups and downs of the value of Bitcoin, there can be a lot of greed behind it, but the same risk is applicable in shares as well. It's not unique to Bitcoin. Yeah, so people can borrow and overinvest and lose a lot of money in shares, in stocks, and people can lose a lot of money in Bitcoin as well.
Speaker 1So in a sense, I think it's the same dilemma, really, between making a long-term investment in a company versus speculating on the share market. It's really a parallel there, isn't it you're saying? So I suppose it's not whether or not I own a car, it's how I drive my car. Yeah, you know, is that the way you're going?
Speaker 2Yeah, yeah, I think so, and I think whether you agree that Bitcoin is an investment ultimately depends on your personal conviction as well. Like, what do you think of Bitcoin? Like, I'd say that people from the global south, from the non-west, potentially they can see more value behind Bitcoin. What's the function of it?
Speaker 1and the value behind it, because they've been let down by their government decisions monetarily, I mean. Those terrible statistics of inflation rises in.
Speaker 2Turkey, egypt, argentina, double digit, even triple digit, inflation. And these people, they are more inclined to see the value behind Bitcoin as a store of value. And if they can see a value behind it as a store of value, and if they can see a value behind it and they can see a long-term future in it, potentially they will think this is an investment and they are not speculating in it, because they are really investing in something they find valuable, not just for the pricing, but for people like us who have more stable government. We don't really see the need of alternative financial instrument or system and and and.
Speaker 1yet, yeah, should I, if I want to be loving to my third world friend, um invest in order to give it more stability, rather than investing in conventional share markets.
Speaker 2Yeah. So that's a great question, but a very complicated one, because if we invest more, that would drive the price more and make it more affordable for them, but if we don't invest, then there will be less people using it and the market will be smaller and the usability will be smaller and the value will be smaller as well. So I don't have an answer for that.
Speaker 1You told a story that I found quite helpful about the opponent of Vladimir Putin, and just give us that story.
Speaker 2Yeah, yeah, so Alexei Navalny the late Mr Navalny because he was opposing Putin's administration. Basically, the government just seized all his accounts, his family's accounts, his children's accounts, and overnight they lost all their savings. Not only that, they have no access to financial institutions, they can't use banks anymore, and Alexei decided that Bitcoin is the way to survive. He chose Bitcoin to receive donation for the necessities of his family, to provide for his family and for him to continue to fund his political campaign for justice against the Russian administration. Yeah, and it worked for them for quite a few years that the Russian government just couldn't stop them using Bitcoin because of the decentralized nature of Bitcoin.
Bitcoin Investment Considerations
Speaker 1Now at one level I think, oh fantastic. But another level if he can evade Putin, then surely the tax cheat can better evade the Australian government.
Speaker 2Yeah, so I think that was a few years ago. We have to bear in mind that laws and technology are catching up as well. Like recently, fbi just cracked down the largest amount of black money because Bitcoin's transaction has all been uploaded online. So the transparency of Bitcoin allowed the government to track all the transactions, but the pseudonymity of Bitcoin's identity allowed people to hide from the government. So there is a double-edged sword, I would think.
Speaker 1Okay, you've done all this research. Would you invest in Bitcoin or have you invested in Bitcoin?
Speaker 2Yeah, I don't have any Bitcoin at this moment. Try to be objective when I'm researching it. But I can see value in Bitcoin. I wouldn't bet my life in it. But yeah, coming from a non-West country, I think there is a place for Bitcoin. But there's still a lot to prove about Bitcoin. It's just 15 years and yeah any disaster, any threat against the system could just destroy it. So we never know what will happen, I think.
Speaker 1But you might have it, as I don't know 5% of your superannuation or something, if the superannuation company was to give you that option.
Speaker 2Yeah, maybe, maybe I'll have to discuss with my wife first.
Speaker 1Very wise. Yeah, yeah, yeah.
Speaker 2I'll talk to Lydia about that.
Speaker 1Jeffrey Chiam has been our guest. Jeffrey is an assistant minister at St Mary's Kuala Lumpur and the cathedral there in Kuala Lumpur, and last year he completed a research project into the ethics of Bitcoin. My name is Dominic Steele. You've been with us on the Pastor's Heart and we'll look forward to your company next Tuesday afternoon.
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