Proof of Workforce Pt.3
A Blueprint to Orange-Pilling your Union, from the First-Ever Union to Self-Custody Bitcoin
After just more than 10 years as an elected Union Board Member, four of those as President, I learned some valuable lessons. First, what you do or don’t do as a union leader matters. This is based on the simple fact that a large group of people are placing faith in you to lead the collective group forward. Many members do so in order to focus elsewhere, knowing the future of the organization is in safe hands. Because of this, I understand why union leaders are hesitant when it comes to exploring Bitcoin. After 14 years of less than favorable media coverage, the fears and doubts have been etched into the minds of people all over the world. The critical piece in the Bitcoin model adopted by Santa Monica Firefighters, prioritized removing those fears, as well as removing almost all of the risk.
We are all very familiar with the most common reasons for skepticism of Bitcoin. The big drop from 2021 from all time highs of $69K to $15.5K recently. The FTX collapse. The endless quotes from legacy finance personalities dismissing Bitcoin as worthless. Yet, despite all of this and more, Bitcoin has continued its growth and adoption as a network, monetary instrument, asset, community, and brand. If Bitcoin is a brand, which it is, surely a few of its core values are resilience, continuous innovation, and dependability. Whatever derailments have been directed at Bitcoin, whether direct or indirect, they all have been quickly absorbed, followed by things being built back stronger. Every single time. So as a Union leader, how do we harness the potential of such a promising innovation, while insulating our first step into Bitcoin, so that first step can hold over time.
The Santa Monica Firefighters started with something so simple, at first you want to laugh at and dismiss it. And then you want to laugh some more. However in its simplicity is a well designed model. Below I will lay out the overall model and then break down each part, while briefly walking through rationale and some process. This model is built around what we call Phase 1: Get in and learn.
Step 1: Start from a Place of Trust
It’s important to start from a place of trust. In the event trust is lacking, you should refocus your energy, not on Bitcoin, but on earning the trust of your group. Even if it takes months or years. Alternatively, you could try to educate someone who does have the trust of your union or group, like a leader or influential member.
Ironically, even though Bitcoin is a trustless system, in that you can control and manage your Bitcoin without a custodian, the trust required to “orange pill” a person or group is significant. This is mostly due to something all of us do: grab headlines on topics we don’t care to explore. Whether stories are of people losing their seed phrase or losing on an investment, people grab headlines to form the basis of their understanding. And this phenomenon has nothing to do with intelligence, it has to do with the value of time.
So, Do not overlook this key starting point. Start from a place of trust. Oh, and keep that trust by doing things for the right reason, for the benefit of your membership as a whole.
Also: Ask yourself “Where am I on my Bitcoin Journey?” Due to some fateful events I was blessed with some incredible humans and resources. Be humble enough to ask for help. Seek out input for your efforts. This is proof of workforce. Put in the time, and tap what we all know is one of the most powerful aspects of Bitcoin: ITS COMMUNITY!
Step 2: Conduct Due Diligence
Research the structure of your organization. What are your bylaws? What do they say on what you may be trying to do? What is your corporate structure? Are you a 501 ©(3), LLC? Many unions fall under the 501 c(4) classification. Reach out to your accountant, tax attorney, whatever resources your organization has. Explain what you are trying to do? If you can't do this prior to step 4, approaching leadership/board officers, do everything you can. You want to bring well thought out, vetted and achievable models. You may only get one chance so it must be solid.
Step 3: Build a Model
Build a model that eliminates FUD: fear uncertainty and doubt. Don’t fight or downplay these fears. Members of a long standing and successful organization have earned their uncertainty and in 99% of proposals and actions they are correct to be wary. Especially with new things that are still existent in the proving grounds.
In the case of Santa Monica Firefighters this exploratory model started as a 1 dollar per member, one time assessment, to acquire Bitcoin to be held in self-custody. Self-custody is a means of holding your digital assets by which only you have control over that asset, without the need for a third party custodian like a bank, exchange or company. I see 5 very important reasons to pursue a minimal initial allocation like this.
It overcomes a healthy skepticism: At a dollar, it is easy to overcome the FUD. After all, it's a dollar. This small allocation flips the conversation from fear to curiosity.
Longevity. If passed, this model allows members to weather a volatile dip in the dollar value of Bitcoin. For those who have been in the space for some time, we are more immune to this behavior. However, for someone new, the volatility of Bitcoin can be too much, causing an early exit. You don’t want your membership to exit Bitcoin before they have had the opportunity to truly learn about it.
You learn best when you have skin in the game. When you have some form of initial commitment you pay attention and learn.
Some members will inevitably vote no on whatever measure you bring forward. The minimal one dollar allocation prevents these people from putting up a wall of resistance, if that makes sense. If you were against a Bitcoin allocation, if the measure was for say, 1000 dollars a member, you are going to be pretty emotionally upset if the measure passed. At one dollar, how upset can you be? And this is critical if your union expects to move into more significant investments over time. You will need to bring EVERYONE to understanding Bitcoin and its potential.
A minimal allocation allows a collective group to start off by holding Bitcoin as it was originally designed: in self custody without need of a 3rd party custodian (this also is a cost savings)
This model was also built with an internal committee to advise and guide the implementation process and any next steps. This committee should consist of internal members knowledgeable in Bitcoin, your treasurer, and a few external experts in the space. This should be an advisory committee only with no power to implement any further actions. That power should rest firmly within your union's normal structure. This is important because any further steps should come from the rank and file membership, once again providing a solid foundation that can withstand challenging times.
With a minimal allocation and little to no risk, you have time to decide on a long term mission and structure of any Bitcoin investment. Whether its a Bitcoin Medical Trust, balance sheet allocation, or pooled mining, you have time to explore options and involve your membership.
Step 4: Brief Your Leadership/Union Board
It is critical to involve your union's leadership. These are the individuals elected at large by the union to lead. Therefore do not bypass this step. Fortunately in this, my union has always been blessed with a forward looking and courageous board that has the trust of the membership. Invest the time here. If you run into a union board that is unwilling to learn about Bitcoin, keep looking for a way in. With some creativity, patience, and persistence you will find an opportunity.
Things to keep in mind. Understand your audience. If you have never held any elected office, talk to those who have. Representing any group or constituency as a whole can often be defensive in nature. Not defensive to ideas, defensive in actions. That is because an elected body carries a tremendous burden: The well being and futures of members and their families.
Take your time, and yet again, another benefit of a small allocation with little to no risk to start, is your audience does not need to get to a place of full understanding. That takes years and even then, we are still learning because Bitcoin is still being built in real time.
Step 5: Launch the Measure
There are many ways to bring an item forward to your union or group. At the end of the day, even a small allocation warrants the buy in from the entire membership. This is a long road filled with ups and downs. Even if possible, within your organization's bylaws, to proceed without a membership vote, it is highly recommended to bring an item of this significance to the entire membership. This means it will take time so be patient.
Additionally, consider the format. Online vote, in person meeting etc. The benefit of such a small dollar amount as a one time, one dollar per person assessment, is that it is exploratory in nature and lacking significant consequences. This means members do not have to learn Bitcoin in its entirety.
Lean on members who understand. There is abounding talent found throughout your group or organization. Finding these talents is important. Being that the status quo is always on the defense, education, not persuasion, must be on the offense. Find members who appeal to various parts of your group, and have them work to educate people.
Do you want to know what will likely be the most commonly mentioned thing during the voting phase of this measure? “Why such a small dollar amount, why not more?” That is exactly the kind of outlook you want heading into a learning phase. After explaining why, members are left with a natural curiosity to learn and appetite to take future steps. This is where you want to be, not hiding in a broom closet because Bitcoin predictably dropped 10-15%.
Step 6: Implement the Plan
If you have made it this far, your union or organization has approved the acquisition of some Bitcoin. Congrats. A few recommendations when executing on this.
Stay Neutral. Avoid the temptation of promoting any one company. For example issuing a press release that says you used Company X or Bitcoin Wallet Y. This is for two reasons. First, This is about your union, its members and the start of a long, important and hopefully fruitful journey. Second, In this emerging space we have all seen heroes fall. What I mean by that is, don’t tether your journey to the fate of another company. Things happen, and companies fail. Make this about your members.
Do it Right and Get Help if Needed. Actually, get help, it's needed. This is a team effort, so be honest with your level of comfort with exchanges and self custody. Exchanges are pretty straight forward and there are a lot out there. Bitcoin only exchanges are always great options due to their commitment to Bitcoin, which means they have a commitment to sound finance. For me personally, Bitcoin self-custody has been a 6 year journey. While I can comfortably navigate all types of self-custody options, online, offline, hardware, air gapped, node builds, multi-sig, UTXOs, this took a lot of hours and mistakes. And I am still learning! The amount of content out there is enormous, as well as people who will help. Myself included.
As for the other aspects of executing and implementing, from the purchase to the press release, utilize a support network. Once again, I've been unbelievably blessed with smart, driven people in the Bitcoin space and my life. My only recommendation in this is more of a life lesson. Seek out companionship from those who inspire you and be humble enough to be inspired and taught to begin with. The ego is the death of creativity. Always be humble, especially in the implementation phase. I can connect you to resources if needed and don’t hesitate to reach out.
Look for local stories and significance. Maybe there is a story with a family member or tie to Bitcoin in your organization. Maybe a local Bitcoin story. For the Firefighters, we chose to execute our Bitcoin acquisition on Wilshire and Ocean Ave. The Significance: This location was the finish line of the 2009 LA Marathon. Hal Finney, one of the earliest pioneers of Bitcoin ran in this race and wasn’t able to finish due to what he didn’t know at the time was ALS. The symbolism for us was paying homage to the Genesis of Bitcoin and signaling our commitment to continuing to build upon what others started long before us. And I can’t think of anything more aligned with the ethos of Firefighters all over the world.
Step 7: Educate, Explore and Build
This is the exciting part. The sky's the limit. Here are a few ideas to get you started.
Seek out resources for your members. For us, we were blessed to have so many. In the area of education you have a lot more leeway to partner with community leaders, companies, writers etc. and unlike the acquisition phase of Bitcoin, you are not tied to any of these other entities. Bitcoin is learning. Oh and create a reading list and a quality podcast list.
Support your members going to events and conferences, Bitcoin seminars, meetups. From Bitcoin Core to the Lightning Network there is so much building going on, it is easy to catch up quickly.
Have your committee interact with your members and bring forward different ideas for next steps. Maybe your union wants to set up a Bitcoin Trust with the goal of buying a union hall one day. Whether it is an allocation on the balance sheet, a Bitcoin Medical Trust, or Bitcoin Trust as an investment for later dividends there are so many options. Surely, one will fit your memberships long term goals, if they decide to move forward.
Communications: Keep communications available, but don’t overload. Bring meaningful communications forward. Empower and enable your members to take their own Bitcoin journey. This will be critical to any future steps.
I am here to help and you are not alone. I have started a nonprofit mission called Proof of Workforce. I will travel to visit your union if possible, free of charge, or set up a phone call, zoom call whatever.
Lastly, this is just one way of doing it. Your union may have different characteristics with a different approach. As long as your first step is sustainable enough to learn, there are endless ways that step can take place.
My mission to explore Bitcoin and the workforce is a continuously evolving journey. The parallels and values shared between the two are incredibly powerful. You are a key part of this work for which I am just a conduit. I love unions and I love bitcoin, and I am optimistic and excited for the future intersection of both.
**These comments are my own personally and I do not speak on behalf of the Santa Monica Firefighters, Local 1109
