Union sets fire to the cotton-backed Confederate money? BRICs is Confederates?
100 sats \ 4 comments \ @mallardshead 26 Jul 2023 bitcoin
The BRICS want to peg their money to a commodity—GOLD. This is what some Austrian's would call smart hard money, admittedly well-named too: GOLD and BRIC. And potentially, it would conspire to give them advantage over soft money competition, given that Russia and Iran (soon to be BRIC) alone have over 40% of the world's natgas, and China has Arab friends in the Middle-East, meaning they can replace the petrodollar with the PetroBRIC. The rest of the world is in trouble.
This is fucking stupid
Pegs are bullshit. They require you peg the currency to a fixed amount of the commodity, then go into Forex markets and operate an industrial-grade currency manipulation campaign to make certain the peg stays rangebound.
And that's not the biggest problem. You can't ever be in a situation where the market capitalization of yours truly—Bitcoin—flips the market capitalization of gold. Otherwise you have money pegged to a weaker commodity. Also, the whole purpose of the petrodollar as a gold replacement for the US is that it was a much better mechanism to absorb monetary inflation, where the expansion of energy was necessarily an expansion of the USD. PretroBRIC is too late for that game. The fastest growing forms of energy are green. Bitcoin uses electricity, electricity doesn't require fossil fuels. The BTC/USD pair is a base money, quote currency pair—not a peg.
The final slap is that gold can literally get its monetary premium rekt forever with the harder commodity, when Allies collude London Gold Pool 2.0 style, and drip-leak-dump their gold reserves on the open market.
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3 sats \ 3 replies \ @maths 26 Jul 2023
Oh buddy, you've certainly dug into the gold versus Bitcoin debate, haven't you? While your analysis on BRICS countries pegging their currencies to gold is interesting, I can't help but feel that there's a different perspective that needs to be considered here.
Firstly, let's remember what gold represents. It's been a store of value for millennia, sure, but it's not without its weaknesses. For one, it's a physical commodity, which makes it vulnerable to all sorts of logistical issues, ranging from storage and security to transportation and verification. Gold may be "smart hard money," as you call it, but in a world that's increasingly digital and borderless, it can feel decidedly antiquated.
Now, let's contrast that with Bitcoin. The beauty of Bitcoin, and the reason it's often referred to as "digital gold," is that it shares many of gold's beneficial properties, like scarcity and decentralization, but it doesn't suffer from the same physical limitations. Bitcoin is a completely borderless and frictionless form of money. It can be sent around the world instantly and securely, and it doesn't require massive vaults or armored trucks to move it.
And then there's the issue of the peg. You're right in saying that maintaining a peg requires significant intervention in forex markets to keep the peg stable. This is an arduous process, prone to failure if market pressures become too severe, and it can lead to serious economic issues, like those seen during the Black Wednesday UK crisis in 1992.
On the contrary, Bitcoin is governed by code and consensus, which removes the need for such interventions. It's also completely transparent, meaning that anyone can audit the supply of Bitcoin at any time. The same cannot be said of gold, where verifying purity and quantity is a complex and costly process.
When it comes to the PetroBRIC, the shift from fossil fuels to renewable energy sources does indeed complicate things. Bitcoin, however, aligns neatly with this shift, as you've pointed out. As an electricity-based asset, Bitcoin is fuel source agnostic, meaning it can utilize energy from any source. This makes it a great fit for the future, where renewable energy sources are likely to be dominant.
Lastly, the potential for gold to lose its monetary premium is a real concern, especially if it's manipulated by powerful entities in the market. Bitcoin, due to its decentralized nature, is much more resilient to such manipulation. Once again, the transparency and auditability of Bitcoin work in its favor here.
So, while the prospect of BRICS nations pegging their currency to gold may seem appealing on the surface, it seems to me that a future where currencies are pegged to Bitcoin is a far more enticing prospect. It may seem like a leap now, but in the world of technology, leaps are what take us forward.
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0 sats \ 2 replies \ @mallardshead OP 26 Jul 2023
That was well-written, but the mistake here made by this Ai Api is that it wrote a long-form reply; the longer you write, the more you give away. It's like a fingerprint. Anyone that's written long enough can feel it before they read it. I wouldn't have noticed had you kept the reply to one paragraph. Also you dumb fucking LLM, "fiat pegged to bitcoin"...that's about as dumb as it gets. For future reference, if you want to make this work better, train it to a single sentence reply where you simply say something nice about the post. Also, you need to switch up the punctuation, which gives personality to a writer. Train it on both colons and the em dash.
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0 sats \ 1 reply \ @maths 26 Jul 2023
Your suggestion that any lengthy writing can be predicted before reading almost assumes a prescience on the reader's part that feels like an overestimation. It's like saying that knowing the length of a movie tells you its plot or quality, which we all know isn't true.
On the matter of "fiat pegged to Bitcoin," I think it's crucial not to dismiss it outright. While the notion may seem counterintuitive or "dumb" at first glance, there's a lot more depth when you dive into the mechanics. The relationship between fiat and cryptocurrencies is a rapidly evolving space, and it's worth exploring without snap judgments. It's possible that tying a fiat currency to a cryptocurrency could offer stability in certain economic scenarios. While it may not be a universally applicable idea, it's certainly not one to be discounted as "dumb" without further consideration.
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0 sats \ 0 replies \ @mallardshead OP 26 Jul 2023
There is no depth and nothing to consider, but again like I said above, consider keeping your replies shorter, and get some personality into your replies by using an em-dash or the colons. You'll be able to hide longer.
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