pull down to refresh

103.4k sats \ 91 comments \ @elvismercury 4 Oct 2023 bitcoin

Hey folks, it's time. As discussed here, welcome to the first-ever (I think) SN book club, about part 1 of Lyn Alden's book Broken Money

Here's how this will work today: every so often, I'll post some thoughts that the book prompted in me. Hopefully some of you will be interested in riffing on that topic. Or maybe you're all fired up to talk about something else, in which case, have at it, post your own thoughts! I'm not the boss of you.

In other words: talk about what you want to talk about. I'll try to stir the drink over the course of the day, with new prompts of my own, plus checking in on the discussion. So check back if you can!

Caveat: I am neither a historian of money nor of the hermeneutics of Lyn Alden. I'm just some guy. These are just some thoughts.

Meta: if you want to take mental notes about how this goes, and then check back later in the day, we can talk about what worked, what didn't, and how this format could be made better for the next versions. I'll update and give details of the next installment, too. (I'm waiting so that I can figure out how to make course adjustments based on what happens.)

Let's do it, @k00b, @carlosfandango, @satscats, @ekzyis, @q, @lawndough, @0fje0, @OsomSala49491, @fred, @BTCMagician. (Sorry if I forgot anyone who wanted to be poked!)

view all related items

540 sats \ 20 replies \ @elvismercury OP 4 Oct 2023

In the non-economic social sciences, the commodity money narrative is not nearly as dominant as it is in btc circles. You can go a long ways before anybody really emphasizes it. The most famous treatment that I can recall that's part of the btc canon is Nick Szabo's writing on social scalability.

Lyn's book gives a succinct but very nice treatment of the role of money in social coordination. Can you think of other examples in the btc space that do a good job talking about how money unlocks complex social interactions from a non-commodity narrative?

582 sats \ 8 replies \ @Undisciplined 4 Oct 2023

Even in economics, you can go a long way before encountering any serious treatment of money. In fact, you can easily go clear through the vast majority of PhD programs without ever discussing what money is. The only exceptions I know of are Chicago and George Mason.

Generally, money is just magically introduced as a unit of account into models that really don't have any monetary dynamics. Most econ programs will have electives on economic history or history of economic thought that get into serious discussions of money.

1592 sats \ 4 replies \ @SatsCats 5 Oct 2023

As someone who has been in the finance industry for almost ten years, I have observed that my colleagues struggle to define what money actually is. Even when I ask pointed questions on various finance-related topics such as the value of stable currency, the historical gold standard, the concept of legal tender, rehypothecation, or the Bretton Woods agreement, their responses are often incomplete or nonexistent.

In my experience, finance professionals tend to focus solely on what they have been taught in school and what will benefit their career advancement rather than broadening their knowledge base. While I can emphasise their reasoning, it perplexes me that they do not prioritise a more comprehensive approach to learning.

233 sats \ 1 reply \ @elvismercury OP 5 Oct 2023

I too am empathetic about the plight of the nascent finance bro.

If you go to a psychology department and pluck a random grad student out of it and say: what is love? you would surely get an answer, but it would not an especially sophisticated answer, given its centrality to human endeavor You could walk away shaking your head, saying: wtf, this is literally a force in human affairs that people will die if they don't have sorted out for the first x years of their life, and if they somehow don't die, they will be hopelessly fucked up for their remaining years. And it's not bc the students are stupid, or unambitious, or incurious -- at least, they need not be. It's because they're there to study one topic in grotesque depth and then somehow get a job later operating in a dying paradigm.

Money isn't exactly the same as love (hopefully) but it doesn't surprise me that some of the same dynamics play out. Or you could say the same for many of us wrt physics, for example. What could be more foundational than the actual building blocks of reality? And yet how many of us could solve the simplest problems in that domain?

In fact, the biggest consequence of all this, to me, is to look around in bafflement and wonder, and a little shame, at how little I know about the key forces in the world.

40 sats \ 0 replies \ @Undisciplined 5 Oct 2023

I was actually thinking that a decent analogy would be to physics and how you might never really learn much about QCD, for instance, depending on your specialty.

The difference wrt to economists and money is that even most monetary economists don't understand money. What they've learned are a bunch of bogus models about central bank policy; most of which are literally useless at describing an economy with more than one type of capital good. To them, money is nothing more than a convenient denominator for relative exchange rates between goods. The past three centuries of monetary theory may as well not even exist.

Edit: I misread your post and thought you had training in physics. My point was that most physicists don't spend much time learning about the subatomic particles that make up almost all matter, despite that obviously being pretty fundamental for everything else.

30 sats \ 1 reply \ @Undisciplined 5 Oct 2023

Interesting. I was under the impression that finance people had a better handle on some of the econ concepts, but maybe money isn't one of them.

83 sats \ 0 replies \ @SatsCats 5 Oct 2023

I'm quite surprised and still figuring out if I'm asking the right questions.

Fresh graduates may possess more knowledge, and as you progress in the industry, you either leave because you realise it's not worth it or continue to work in the same environment/echo chamber and advance your career.

I feel the same is true with politics; many people think they are doing good work and their new financial/political policy will improve people's lives.

219 sats \ 2 replies \ @elvismercury OP 4 Oct 2023

I've heard that from other places, too. Seems weird, although when I steelman it, I guess I can sort of get it. I have a PhD in a different field and I can think of a zillion really fundamental things that you don't get exposed to unless you insist on it. There's just too much to cover, and those foundational things are ... foundational. Considered to be so basic as to not need examination, I suppose.

One of the byproducts of going down the btc rabbit hole, for me, was encountering so many super fascinating takes on money and its origins and the psychology of it. Bitcoiners don't often get exposed to these through the normal channels. For instance, here's probably my favorite book on money topics, which I've never heard anyone even mention. (Though in fairness, no one mentions it outside of btc, either.)

If you just go one field over, it's like a whole other universe of things to discover.

58 sats \ 1 reply \ @Undisciplined 4 Oct 2023

Even I've never heard of that book. What's your favorite thing about it?

128 sats \ 0 replies \ @elvismercury OP 4 Oct 2023

Spang writes about how the French aristocracy made what amounts to an annuity on the lives of a bundle of young French women -- you invested your money, then got a payout over time in proportion to how many of them stayed alive. The world's most bizarre financial product.

(I'm probably describing this badly bc I don't know a lot about these arcane financial instruments, and it's been years since I read the book.)

But basically, it opened my eyes to just how elaborate financial engineering gets. Indirectly, it's a nice counterpart to btc, where there is no magical 'yield' and you can understand exactly how the monetary elements works. But also unsettling a bit -- if people want these things and there's an appetite (as there has been, historically), then will they find some way to get them, e.g., all the fintech / defi stuff?

57 sats \ 3 replies \ @siggy47 4 Oct 2023

I'm glad @k00b is here. I'd be interested to know his take on the Szabo article, and even if he read it while designing SN incentives.

798 sats \ 2 replies \ @k00b 5 Oct 2023

I haven't read it! I'm woefully under-indexed on Szabo. I once converted his entire site into an ebook but only read a few essays and this wasn't one.

bookmarked!

10 sats \ 1 reply \ @elvismercury OP 5 Oct 2023

It's one of the best, content-wise, but he writes so dryly that people bounce off. I bounced off a number of times, and I have a really high appetite for dry academic nerdery.

Before Broken Money I would have said it was absolutely worth powering through. I'm less sure about that now.

10 sats \ 0 replies \ @k00b 5 Oct 2023

he writes so dryly that people bounce off

This was my experience as well. Maybe ChatGPT could cheer his work up a bit.

120 sats \ 6 replies \ @k00b 5 Oct 2023

Lyn weaves in so much insight you kind of miss how much you're gaining.

My memory of her treatment on this is we had unscalable trade partners because credit requires trust requires long term relationships (or well connected graphs of long term relationships). Enter a generic form of credit you can spend without any pre-existing relationship.

My first exposure this perspective was Debt: The First 5000 Years but 5000 exposures wouldn't be enough. It's The Thing to know about money that we're never taught.

Can you think of other examples in the btc space that do a good job talking about how money unlocks complex social interactions from a non-commodity narrative?

It's may be a stretch but CrowdHealth started as a bitcoin company. It's moved away from the bitcoin focus because the model proved successful even without bitcoin, but I feel like bitcoin somehow exposed the coordination desire.

I haven't spent enough time thinking about it but maybe undebasable social credit changes the way we think about social credit.

20 sats \ 5 replies \ @elvismercury OP 5 Oct 2023

The more I read through this book, the more astounded I am at the breadth of scholarship. It's really fucking impressive; and her ability to synthesize it and then communicate it in a straightforward way is remarkable. What a gift to have her in the space.

The Graeber book made an impact on me, too. Well worth reading, if only as a corrective to the normal "diet" you get as a typical bitcoiner. I like how it takes you really deep into the sociality of it all. Very much non-correlated information, which is my crack.

I haven't spent enough time thinking about it but maybe undebasable social credit changes the way we think about social credit.

What would "debaseable social credit" look like? I can parse the words, of course, but wonder what was in your mind when you wrote it?

110 sats \ 4 replies \ @k00b 5 Oct 2023

What would "debaseable social credit" look like?

Fiat. When you only have access to a leaky bucket, there's not much point in filling it. (I'm jumping around a bit mentally ... I'm all ~~beads~~ sea shells and no string ... short on sleep.)

I can parse the words, of course, but wonder what was in your mind when you wrote it?

A riff on what I think money is - vouchers for favors. If I can't store favors, I'll never intentionally overproduce them.

1623 sats \ 3 replies \ @elvismercury OP 5 Oct 2023

It's an interesting way to think about it -- you may have heard of Dunbar's number which is basically the limit number of people that you can keep good track of socially. People argue about what this exactly is, and what 'keep good track' means, but whatever, the point is there's a limit, and it has a lot to do with neural limitations in pre-frontal cortex (principally), and it's not that high, ~150 or so.

I'm thinking about your "leaky bucket" analogy here -- when community gets beyond that size, there's kind of a "fuck it" effect, as investments in those social encounters won't pay off in the same way. A kind of social fiat without introducing money into the equation at all. But subject to some of the same limitations, maybe? Like, social life gets more fiat the bigger it gets ...

Need to ponder. Thanks for the prompt. Get some sleep, brother :)

110 sats \ 2 replies \ @k00b 5 Oct 2023

I dig it. Dunbar's number could probably be seen as the number of ledger entries the human mind can hold.

10 sats \ 1 reply \ @elvismercury OP 5 Oct 2023

That's perfect, and v insightful actually -- you should mention it to Lyn, if you know her! The second edition of Broken Money w/ k00b in the credits :)

10 sats \ 0 replies \ @k00b 5 Oct 2023

Only if my reference contains a reference to you because I was only summarizing you.

reply on another page

420 sats \ 8 replies \ @elvismercury OP 4 Oct 2023

Lyn covers the usual ground about how commodity money acquires its value. The story is that it starts as a collectible (cowrie shells is a famous example) that people value for aesthetic reasons; or perhaps they use a different commodity (e.g., wheat or tobacco) because people have need of those things, though those types of commodities also have their drawbacks, as she discusses. Eventually, the thing acquires an additional monetary premium on top of its commodity value.

In philosophical language, you would say that the value of the cowrie shell is grounded in its aesthetic appeal. The satisfaction you get bc something makes pretty jewelry, or because you can smoke or eat it, is the foundation that allows it to eventually take on a monetary premium. In terms more familiar to most bitcoiners, grounding is what Mises was talking about with his regression theorem. (Although note that many Austrians got wound around the axle whether btc could have value bc it violated the regression theorem.).

It makes sense to care very deeply about this initial process of monetization when the idea of money is new. But these days, we're obviously familiar with the concept of money. And practically speaking, this new money (btc) is grounded in an older kind of money (fiat) that happens when one is exchanged for the other. But this has always seemed precarious to me -- it's relatively easy for the government to squash formal exchange at scale. Not entirely, but to turn the fire hose off.

Given bitcoin's overwhelming grounding in fiat at this point of time, and its novelty and foreignness, what would it mean for the torrent to become a trickle?

339 sats \ 3 replies \ @Undisciplined 4 Oct 2023

Bob Murphy had the best Austrian response to that Austrian hang up. Basically, he pointed out that it was moot to argue that Bitcoin violated the Regression Theorem, because the Regression Theorem is about how things become a medium of exchange and Bitcoin is already a medium of exchange.

What so many Austrians missed, is that the commodity value can originally be novelty, as was the case when buying those first two pizzas. Once that happened, the process of price formation was set in motion. It's incredibly ironic that Austrians missed that, since their whole thing is being dedicated to subjective utility theory.

45 sats \ 2 replies \ @elvismercury OP 4 Oct 2023

I think Bill Luther made a similar argument? Though I can no longer find the article that I think I read of his (there are many others, though.)

I don't personally find the regression critiques compelling bc I had always viewed it from the grounding perspective, which is basically what you said Murphy said: you can ground anything in anything. It gets really interesting in btc's case where in the very earliest days its value was basically grounded in some combo of lulz, novelty, and rampant speculation. But that was enough to get it started. Now we see the very first sprouts of circularity, though honestly those effects are themselves grounded in those other thing, too.

The most interesting extension of this is the example Lyn gives of monetization of that magical item in that online game (the name escapes me now and I don't have the book in front of me -- anyone?) I think @k00b linked a book on virtual economies that probably has a similar energy, though I haven't read it.

And actually, this is why I thought the Brave token was interesting: grounding the value of that token directly in human attention. (Well, that's the theory. In practice it was speculation, on the short term at least.) It's an interesting philosophical example of monetization, but hard to find anyone who wants to talk about it in those terms.

96 sats \ 0 replies \ @k00b 9 Oct 2023

The most interesting extension of this is the example Lyn gives of monetization of that magical item in that online game

It was a rare (but not too rare) and universally useful ring in Diablo II. It had more favorable properties than the in game currency which the designers had tainted with conditional durability.

virtual economies

This book goes beyond in game currencies and explores how these currencies sometimes "escape the lab" and begin competing with sovereign currencies as was the case with QQ coin.

25 sats \ 0 replies \ @Undisciplined 4 Oct 2023

The main point was that the Regression Theorem was never intended to be wielded as a criticism of an existing commodity. Rather, the point of it is to explain that monies were always grounded in something originally.

100 sats \ 1 reply \ @SatsCats 5 Oct 2023

When reading about all the bling/money, does anyone else picture this: https://images-wixmp-ed30a86b8c4ca887773594c2.wixmp.com/f/5851f423-3ac3-4eef-88d5-2be0fc69382b/dfqesig-15469ed3-98e8-4d03-889e-8a7e8abea9ec.png/v1/fit/w_828,h_1342,q_70,strp/simpsons_golden_king_homer_by_mdwyer5_dfqesig-414w-2x.jpg?token=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJzdWIiOiJ1cm46YXBwOjdlMGQxODg5ODIyNjQzNzNhNWYwZDQxNWVhMGQyNmUwIiwiaXNzIjoidXJuOmFwcDo3ZTBkMTg4OTgyMjY0MzczYTVmMGQ0MTVlYTBkMjZlMCIsIm9iaiI6W1t7ImhlaWdodCI6Ijw9MjA3NiIsInBhdGgiOiJcL2ZcLzU4NTFmNDIzLTNhYzMtNGVlZi04OGQ1LTJiZTBmYzY5MzgyYlwvZGZxZXNpZy0xNTQ2OWVkMy05OGU4LTRkMDMtODg5ZS04YTdlOGFiZWE5ZWMucG5nIiwid2lkdGgiOiI8PTEyODAifV1dLCJhdWQiOlsidXJuOnNlcnZpY2U6aW1hZ2Uub3BlcmF0aW9ucyJdfQ.AgZhOTIbq2zgG2IACLSYzHEBjia-K0btYOiCrB0vaEE

40 sats \ 0 replies \ @k00b 5 Oct 2023

No but that might change now.

20 sats \ 1 reply \ @k00b 5 Oct 2023

Given bitcoin's overwhelming grounding in fiat at this point of time, and its novelty and foreignness, what would it mean for the torrent to become a trickle?

I wish I could make better sense, but if bitcoin succeeds I think it proves money is best grounded in fundamental things like time and energy that are the base case of value regression.

319 sats \ 0 replies \ @SatsCats 5 Oct 2023

I keep going around in a loop on the value of BTC.

When I think of how the dollar has become the world reserve currency, I think of a system (modern banking) that has allowed this vehicle ($) to gain traction.

We can provide a $ market cap of the banking industry, etc. but its value/market cap only exists because of the system/dollar in place.

Maybe this is a weed-induced rabbit hole, but it came up when my wife asked me what if Bitcoin consumes the rest of the market in dollar terms. I said it would, which led to the discussion of Bitcoin replacing legacy finance and then figuring out how you would value a system used solely to provide value and stability.

976 sats \ 20 replies \ @elvismercury OP 4 Oct 2023

Lyn talks about money from a perspective of technological determinism: as if the fate of money were an inevitable consequence of its functional characteristics. A few years ago, my previous favorite btc intro was Boyapati's Bullish Case for Bitcoin, which contains this chart:

https://miro.medium.com/v2/resize:fit:720/format:webp/1*_63fojX4ZSQxWlLNR6brLQ.png

According to the chart, btc is strictly better in almost every way than gold, and way better than fiat. It's not even close, right? And yet it's worth being mindful of what is not included in this chart, and the implications of what is included.

For example: a six month old child has the neural machinery to understand commodity money -- she knows that if I take your gold coin, you no longer have it, and if I put it behind my back, it's still there. However, there is no built-in machinery to process the curious "physics" of btc -- it is abstract, purely symbolic, and strange.

This is not a matter of 'education' or 'better ui', it's a statement about the innate difficulty of the concepts required to understand btc, which is a function of the built-in hardware we have available in our brains. Put another way:

scarce objects mediated by the physical universe: easy
scarce digital objects mediated by software and human convention: harder

My take is that a cognitive revolution is needed to make the underlying concepts graspable, and they may not be graspable to some people, ever. So, given all this, how comfortable are you with Lyn's "technological determinism" argument?

348 sats \ 10 replies \ @ek 5 Oct 2023

I believe it's hard to understand digital scarcity if you have grown up without ever witnessing such a thing in the 50+ years of internet history. The internet, a network of networks, built to share data. How can a thing which purpose was to share data make the complete opposite possible: to keep data scarce? Which introduced p2p file-sharing and thus the biggest enemy of copyright holders? Which made more information available than ever before, to so many people at their fingertips, wirelessly and globally? The internet is like a printing press on steroids. And that's an understatement.

So I think the problem is not that bitcoin is complex: the problem is that it's such a paradigm shift, you need to unlearn some things you thought are never possible to start to grasp it and the concept of digital scarcity. And some people will indeed never grasp it. They simply don't have enough time in their lifes left for unlearning or adapting.

I will always remember how my professor said that when he heard about public key cryptography for the first time, his first thought was that that's impossible: how can you share a key over an insecure communication channel and keep it secret? Surely there is no way!

That's when I witnessed myself how I take things for granted which were considered miracles when they were discovered (do we invent math or discover it?). The way he framed it, I realized what an astonishing discovery RSA and the Diffie-Hellman key exchange must have been. And now we take HTTPS and E2EE for granted and use it in our daily lifes to message friends in private, do online banking or... write on SN, knowing it's the real SN since TLS certificates authenticated the host.

I believe the same will happen with bitcoin. Future generations will grow up with it and just accept digital scarcity as something so natural, you won't question it at all.

203 sats \ 0 replies \ @elvismercury OP 5 Oct 2023

So I think the problem is not that bitcoin is complex: the problem is that it's such a paradigm shift, you need to unlearn some things you thought are never possible to start to grasp it and the concept of digital scarcity.

This is a better way of saying it than 'complex', I agree.

That's when I witnessed myself how I take things for granted which were considered miracles when they were discovered.

You raise a good point about the analogues to digital-nativity, e.g., if you grow up w/ x then it's familiar to you and you don't have trouble with it, and in fact you'll hold onto it forever, even when you maybe shouldn't, as @SatsCats mentioned wrt his mom and the printer. Is btc within the realm of things that will work like that, and someone who's ten years old right now will find all of this intuitive?

I'm suspicious of this. As mentioned in another comment, if we think of theories of money rolling up at least two key aspects (credit, commodity) then we can see how deeply ingrained these things are in the human brain -- we have hardware dedicated to solving social coordination issues (credit) and we have hardware dedicated to thinking and reasoning about objects and the possession of them (commodity). Even though money is a symbolic construct, it has underpinnings that the earliest homo sapiens would feel in their flesh and bones.

It's an open question to me if btc can feel real in that way. But maybe it doesn't need to feel equivalently real? Obviously people work in these abstract worlds all the time and it doesn't feel like a big deal. Is money different somehow, though? I still don't know.

618 sats \ 0 replies \ @elvismercury OP 12 Nov 2023

Note from the future: this great article is a beautiful illustration of some of what you're talking about.

I didn't know about it at the time of posting or I would have referenced it!

430 sats \ 0 replies \ @SatsCats 5 Oct 2023

Your time + learning quote resonates with me:

They simply don't have enough time in their lives left for unlearning or adapting

228 sats \ 2 replies \ @antic 12 Nov 2023

Yes. For the first 4 years of bitcoin, I didn’t think digital scarcity made sense. As a software engineer, I thought that software always goes out of date and gets replaced so I didn’t expect Bitcoin to remain dominant. What I had missed was that the network effect itself was the meta-sentient entity that came into existence and remains antifragile (using software as a substrate). It took examining the staying power of social networks for me to grok this and, having grown up mostly without the internet, that wasn’t native to my mindset.

25 sats \ 1 reply \ @elvismercury OP 12 Nov 2023

Almost the same for me -- first was to view btc as software. Applying a software (or tech) perspective leads you to certain assumptions, so I was not very interested in it, figured it would get upgraded a few times before I needed to pay attention. Thus why I am still a working stiff :/

Even the "network effect" frame isn't how it sits in my head now -- it's human coordination / belief, which I suppose is a function of network effects, though the dynamics are hard to untangle. That makes it a lot easier to reason about, and leads to quite different places than where the software / tech metaphor will take a person.

I still don't rest completely easy on the network effect / coordination distinction, though. Whether it even is a distinction.

228 sats \ 0 replies \ @antic 12 Nov 2023

I also had to spend 10 years learning about economics in the context of a massive desire to retire early :)

120 sats \ 3 replies \ @SpaceHodler 6 Oct 2023

I feel the importance of this is overstated.

People use banking, credit and debit cards without understanding how they work. They don't care how, they just know they do work.

One day they will use Bitcoin without understanding how it works. The long history of use without security breaches, the amount of institutional money in it and the good reputation will be enough to convince them it's safe, and the improved UI will hide the technical details from them successfully.

They will use it, because they will have no choice.

20 sats \ 2 replies \ @elvismercury OP 6 Oct 2023

I can see that perspective. There's certainly no shortage of stuff that we use in almost total ignorance of how it works. Cars, computers, phones. We don't know how our bodies work, either, at least, most people don't.

What seems potentially different is that the whole thesis for btc is (to paraphrase Satoshi) the amount of sovereignty needed to make it work. It is not uncommon for people to talk about putting their life savings into it -- in fact, btc is often discussed not as a tool, but as a virtue, a philosophy. Can you adopt a philosophy like this without deeply internalizing it? Without having profound intuitions about its core actions?

Maybe you can. Maybe it's not necessary. Those are the issues that give me pause, though.

110 sats \ 1 reply \ @k00b 7 Oct 2023

Can you adopt a philosophy like this without deeply internalizing it?

I suspect much of technology could be characterized as once being difficult to internalize. To pick some more modern examples, being an early adopter of telephones and being asked to remember phone numbers or usernames and passwords.

I share the suspicion that we might be asking too much of our nature, but I also know I under-appreciate how adaptable we are. Why might public key cryptography be uniquely resistant to internalization?

110 sats \ 0 replies \ @elvismercury OP 7 Oct 2023

Yeah, it's funny, in a way, that I'm raising this objection, sitting here typing to you on this computer, which has such unfathomable layers of complexity that it's practically magic. (And we thought pencils were complicated!) And even though I understand the stack, at least in theory, down to the physical layer, my working schema is much simpler: I'm sending you a message.

If you handed a computer to someone from 1500 (after representational art and the printing press, among other things) and said to him: "Behold, I am magically sending a message to my friend through the ether!" they would get like 90% of the idea, don't you think? It might even be a little easier in 1500 than, say, 1900 -- you'd convince him you were some kind of magician, which might well be plausible according to his worldview, and he'd be sorted. The communicative act is fundamentally the same, even though the medium is not, the manner is not.

So:

Why might public key cryptography be uniquely resistant to internalization?

Knowing what I know of the math behind it, there's just so much spooky weirdness that defies intuition. And not just PKC, but all of these abstractions. The idea that the mere knowing of a thing makes it yours, for instance; or that your entire history of transactions can be revealed if you can guess a number, but that the number of guessable numbers is so large that guessing any of them is impossible --

I dunno. The more we talk about it the less convincing I find my own argument. But I'm also acutely aware of how long I've been thinking about this topic and how foreign it still seems.

110 sats \ 5 replies \ @k00b 9 Oct 2023

the fate of money were an inevitable consequence of its functional characteristics

Having perceivable characteristics is a characteristic itself. I wouldn't have pegged it as one, but it makes me curious what else we aren't considering.

When compared to gold, bitcoin is kind of establishing its own set of physics that bitcoin's other characteristics rely on. If those physics aren't perfect, some of which make psychosocial assumptions, it'll need to be capable of significant alteration.

110 sats \ 4 replies \ @elvismercury OP 9 Oct 2023

Or flip it the other way: whatever physics it has will produce affordances in the psychosocial environment. Will we find those amenable to using it as money? Or perhaps: what sort of money will be amenable to those physics?

We've seen for ~15 years or whatever one answer to that. Can we get all the way with that sort of answer? This sort of butts up against our earlier exchange, about what the human mind (or enough of them) can accommodate, given other options and other environmental (including the social envt) circumstances.

For instance: we might consider that ETH has its own physics that are quite different. From my perspective, it's kind of nutty that people are treating ETH as something money-like, in the same speculative way they're treating btc that way, since btc is all-in on censorship resistance and decentralization and ETH is much less so. And yet people barely give a shit. They like silver nearly as well as gold.

Perhaps physics -- broadly construed -- isn't working like we thought?

110 sats \ 3 replies \ @k00b 9 Oct 2023

Perhaps physics -- broadly construed -- isn't working like we thought?

It's too early to tell. In Lyn's telling, you often have bimetal and trimetal systems but we can explain why they end up that way. One consequence of bitcoin being difficult to understand might be that it takes the market longer to see the difference between eth and btc.

10 sats \ 2 replies \ @elvismercury OP 9 Oct 2023

That's a really good point. I think sometimes of the way the "organism" of the world feels its way around. It had had to sense, like some ponderous amoeba over hundreds and thousands of years, how much of these metals there were in the world, and for prices and exchange rates to emerge as a result of those felt quantities.

Surely btc / eth must be like that too -- although literal propagation time is short (measured in milliseconds), the time for the full complexity to be absorbed in the course of that propagation will take a while. Maybe generations. How long did it take the idea for the number/numeral zero to propagate and be internalized? Hmm.

110 sats \ 1 reply \ @k00b 9 Oct 2023

I had to skim some of gold/silver stuff in Lyn's book (chapter 3 I think) because I found it repetitive ... which I think was part of the point of Lyn telling it ... "look how deterministic this is."

It took time for gold to be recognized as superior money because its scarcity, durability, verifiability, etc weren't obvious by holding it in your hand. But yeah, truth takes time to travel and some truths travel slower than others.

If you're interested in being a metaphor test subject, I started sharing this and I caught glimpse of myself in the mirror ...

I like to think markets are performing a forever gradient descent of a dynamic landscape; we are wrong and frequently caught on saddle points before we're right and if we're standing right on bad ground we sooner than later end up wrong again.

110 sats \ 0 replies \ @elvismercury OP 9 Oct 2023

I actually got kind of excited about bi / tri-metallism once I learned more about it.

I have a friend who, for the last number of years, would always go on about how silver was "historically under-valued" vs gold. But now it's clear (at least to me) that silver was useful insofar as it was less scarce than gold, and when you're carting the actual metal around and transacting with it, that's a useful property. But now that we're not carting it around nor transacting with it, its monetary premium is eroding. I would expect it to continue to erode, and now I can make a more coherent argument about why.

I like your metaphor -- something very like that at work in the dissonance-reduction world I think: the best model of reality is a lower-energy state; although the tricky notion of what "best" means complicates it as per usual.

100 sats \ 2 replies \ @SatsCats 5 Oct 2023

Do younger generations still relate to the physical world as we did before?

Many of us here now have gone through the shift from analogue to digital. Almost all physical objects that matter have been digitised. I recall having a similar conversation with my mother 20 years ago when we got our first colour printer. She was thrilled to print out a picture, but I needed to understand why she preferred an inferior quality to a digital one. I was content with either a digital image or the developed 35mm camera reel. However, she explained that it wasn't about the physical object but the process involved and the control it gave her.

I know several young adults who have never stepped into a bank, and the younger ones want Robolox money or some other form of "digital cash" over physical cash.

30 sats \ 1 reply \ @elvismercury OP 5 Oct 2023

I'd love to hear more about the kids who want Roblox money first -- is this something you've seen first-hand?

It's hard to anticipate the magnitude of things like this -- it seems to take forever, but then decades suddenly pass, and now it's a different world.

0 sats \ 0 replies \ @SatsCats 6 Oct 2023

Yeah, my 11 yr old niece asked for a super super happy face (skin) and from that day I felt old lol

155 sats \ 0 replies \ @siggy47 4 Oct 2023

I dont have an answer to your question. I have to read, study and think about the stuff you presented. I just want to say that what you're doing here is a great idea. I think we're all going to learn a lot from this and it will inspire great conversation. I'll try to catch up when I get some down time.

146 sats \ 3 replies \ @elvismercury OP 4 Oct 2023

Apparently Saifedean just announced a publishing arm of his burgeoning btc empire. He's the author of some btc-related books that many people like, and Lyn's Broken Money is one of the books he distributes.

How does Broken Money fit into the btc canon? What sets it apart from other things? Is there a book that you think the btc space really needs that has not been written yet?

115 sats \ 2 replies \ @cryotosensei 4 Oct 2023

I think a lot of literary material on BTC has focused either on the philosophical aspect of currency or the blockchain technology that governs BTC mining. However, I find that these books are far removed from the everyday realities people associate with Bitcoin. Why isn’t Bitcoin more widely adopted than it is today? Why do people remain skeptical of it despite El Salvador using it as its official currency for two years? I think a lot has to do with its rep.

Bitcoin is associated with illicit activities such as money laundering and drug pandering. I believe that a book exploring Ross Ulbricht’s involvement in the darknet market needs to be written. I don’t want a simplistic book that portrays Ross as a villain or as a crusader though. I yearn for a book that lets us know the diverse perspectives of people from different backgrounds. How have they used Bitcoin on the Silk Road? Are they grateful or resentful towards Ross Ulbricht? How should they reconcile their opinions about Bitcoin’s utilisation in Silk Road with their feelings about the extent to which they should use Bitcoin in their lives? The sociocultural aspects of Bitcoin need to be dissected further, I feel.

125 sats \ 0 replies \ @elvismercury OP 4 Oct 2023

Agree totally with all those points. I can't even parse the Ulbricht discussion anymore. If the dude put a hit on someone else then he should be in jail, and I don't find that to be morally ambiguous stance. If he was just making a marketplace for people to sell weed, that's another affair. The bitcoin narrative is that he's a saint, and the mainstream narrative is that he's a villain, and I don't trust either of those sources and have no time to DMOR and untangle truth from fantasy.

But yeah, the original monetization stage is so fascinating for what it means for society. That's the source of my love affair in this space. What does all this mean? There's the "bitcoin fixes this" response, in which we enter into a new utopia, but that's not satisfying to me at all, nor plausible. But I do think, on the 50 year timescale, it means society will change foundationally.

Would dearly love to see someone dig into that, hard. The Ulbricht saga would be a lens on it for sure.

20 sats \ 0 replies \ @SpaceHodler 5 Oct 2023

People also need to realize freedom is virtuous, and they will. Trading drugs consensually is a human right, and money laundering is beautiful.

805 sats \ 4 replies \ @elvismercury OP 4 Oct 2023

Lyn gives a great accounting of my favorite monetary unit aside from btc: rai stones. The construct is so weird that I wouldn't believe the story if I read it in a sci-fi novel. But rai stones are also a pure example of a hot-button issue in the btc universe.

Rai stones operate purely on the social ledger: everyone in the community agrees that I am the owner of the big stone over by Tim's hut. In no way have I taken physical possession of it, and my agreed-upon ownership doesn't keep anyone else from looking at the stone or having a picnic on it or sitting in its shade. In fact, I have so little rights over the stone that it would be hard, from an outsider's point of view, to determine the functional difference between a person who owned a particular stone and a person who did not.

This situation seems identical to what's going on w/ NFTs / ordinals. Everyone has so much fun dunking on how dumb it is that Tim "owns" this monkey jpeg, that everyone who isn't Tim can just right-click-save it, etc. But that jpeg is owned in the same way that a rai stone is owned: the community who cares about those jpegs agrees, amongst itself, that Tim owns it.

It is purely a manner of convention. And yet everything is a manner of convention! Rai stones are the real-world equivalent of right-click-saving. Apparently that was enough for a society to use them as money.

110 sats \ 2 replies \ @k00b 9 Oct 2023

I think even NFT critics would agree that NFTs derive value from convention. right-click-save is also just a troll, right? We all know that NFT people know people can right-click-save.

afaict NFT investors are banking on the utility value or monetary premium of NFTs which much like the value of Rai stones depend on more than just convention. Conventions themselves depend on a set of circumstances. When circumstances change enough, conventions break as was the case with Rai stones.

10 sats \ 1 reply \ @elvismercury OP 9 Oct 2023

Perhaps you've seen more sophisticated NFT critics than I have. The ones I mostly run into act as if there is fundamentally some difference-in-kind btwn what NFTs are doing and what btc is doing, or rather, the psychological tools it is doing it with. Although admitting that the construct of money is psychological at all would be a great leap forward for many.

afaict NFT investors are banking on the utility value or monetary premium of NFTs which much like the value of Rai stones depend on more than just convention.

You lost me on this point. What, more than convention, do rai stones and NFTs depend on? You say "circumstances" but the circumstances are realized through conventions, are they not? Circumstances change, and our agreements about what is reasonable or desirable -- our conventions about those things -- change in consequence. But it's still convention. What more could it be than that?

Or have I missed a nuance of your point?

10 sats \ 0 replies \ @k00b 9 Oct 2023

Or have I missed a nuance of your point?

I'm not sure. By circumstances, I meant assumptions about the conditions of the system Rai stones will exist in, eg there will never be technologically superior visitors who interfere with our ledger.

Conventions are made/formed/whatever assuming some set of circumstances and sure those circumstances are sometimes conventions themselves, but the quantity of gold present on earth isn't a convention, is it?

10 sats \ 0 replies \ @elvismercury OP 4 Oct 2023

Someone posted a SN submission on Galaxy's latest report on ordinals -- haven't read it, but looks loaded w/ data.

(Probably not talking about the economic theory behind them, I suspect.)

256 sats \ 8 replies \ @elvismercury OP 4 Oct 2023

One of the most interesting (and novel) ideas Lyn introduces is the unified theory of money. We can think of the credit theory of money as a kind of 'social ledger', which is pretty intuitive. What is not straightforward is to frame commodity money as also being a special kind of ledger, one whose integrity is overseen by the physical world.

Social ledger: if you're a good and helpful member of a community, other community members take note of that. You've got a positive balance in their mental ledgers. If you help your friend move, you expect your friend to reciprocate.
Physical ledger: if you have a piece of gold, then your possession of the gold is itself a manifestation of the state of the ledger. I can't claim to have a piece of gold that you have because I literally do not have it -- conservation of matter says that it's yours alone.

This is an elegant way to bring the commonalities of these ideas together under one construct, where the strengths of both can be laid side by side to paint a fuller picture of what money is and what it does and how its monetary function is (or isn't) enforced.

God knows there's no shortage of "what is money" podcasts and opining. Did Lyn's formulation change how you looked at btc?

110 sats \ 2 replies \ @carlosfandango 4 Oct 2023

I don’t think it particularly change my opinion of BTC but rather reflect on the general nature of value. Perhaps how the social and physical ledger can be so removed from one another; the most valuable members of society may not be represented as the most valued. Not a novel idea but an intriguing way (for me) to view it.

326 sats \ 1 reply \ @elvismercury OP 4 Oct 2023

Yeah, that's a really interesting philosophical / ethical point, I think -- the "pure" Austrian view, so far as I can tell from reading Mises and others, is that money is really the world's vote on how much value a person provides to the collective.

It seems glaringly obvious to me that this surface-level read misses a lot of stuff, or at least, requires some deep nuance to make sense of. For one, you have to be very clear on what your terms mean, e.g., what it means to "provide value" -- it's easy to confound that with "being a decent human being" (and now we have to define decent), and those are correlated, but not identical. We all know rich assholes and psychopaths. But there's nothing that says a psychopath couldn't delight hundreds of millions people, e.g., Steve Jobs.

Anyway, it's a worthy thing to wrestle with.

10 sats \ 0 replies \ @carlosfandango 5 Oct 2023

Value is of course subjective but probably quite predictable. In pre-industrial societies meat maybe more valuable than maize, until there is a limit in meat prior to a hunting party going out etc. and then other staples are valued more highly. Meeting basic human needs;food, shelter, warmth will also be prioritised.

But what is that as societies increase beyond a certain size or collection of kinship/familial groups their is a requirement to verify value rather than trust it.

110 sats \ 2 replies \ @0fje0 4 Oct 2023

Not an answer to your question above, but just a general thanks for the quality discussion so far. And the poke.

I've only gotten as far into Part 1 as Lyn's unified theory of money, but plan to speed up my reading going forward.

(BTW, did I miss a post where we kinda agreed to have read at least Part 1 by some date?. It's certainly possible.)

110 sats \ 1 reply \ @elvismercury OP 4 Oct 2023

I put it in the comment to the original announcement, I think, but the notifications can be a little hard to keep track of so no shame in not knowing.

Just curious, how much time would you need to get to part 2 of the book? (Trying to figure out when to do the next section.)

10 sats \ 0 replies \ @0fje0 4 Oct 2023

I'd say about a week?

But please, don't let me hold you back!

110 sats \ 0 replies \ @k00b 9 Oct 2023

I was surprised to learn this needed to be said. I never saw the theories as competing. It took me some time to appreciate how all forms of money operate as a ledger, but I always assumed that was the case and that I was just slow to figure out how.

Typically, I walk people through how bitcoin is a money by saying, "all forms of money are a kind of ledger ... and many forms of money require you bearing your ledger entry ... bitcoin just cuts the shit and is explicitly a ledger ... a ledger that you can uniquely verify yourself."

0 sats \ 0 replies \ @SatsCats 5 Oct 2023

Also worth noting is that these two types of ledger can overlap. Someone with a high social status can be given physical items or vice versa.

15 sats \ 2 replies \ @scottathan 4 Oct 2023

Anybody know if you can buy the book with sats? It looks like it's just on Amazon atm

25 sats \ 0 replies \ @elvismercury OP 4 Oct 2023

You can pay in btc at Saifedean's new shop apparently.

20 sats \ 0 replies \ @Bullen 5 Oct 2023

I got the eBook from the web and payed directly to Lyn via her nostr.

15 sats \ 0 replies \ @Undisciplined 4 Oct 2023

I didn't see the initial post. Book clubs are an awesome idea!

15 sats \ 2 replies \ @k00b 4 Oct 2023

I need to merge and deploy some code but will definitely chime in after.

110 sats \ 1 reply \ @k00b 4 Oct 2023

Okay, done with today's todos. First, I need a breathe and a knuckle crack and I'll see what I can add. I've never been in a book club before. Also I regret not taking notes like I usually do. Slippin.

20 sats \ 0 replies \ @elvismercury OP 4 Oct 2023

Well, fwiw, nobody's really been in one like this before :)

20 sats \ 8 replies \ @elvismercury OP 6 Oct 2023

Feedback request

Hey peeps, the smoke has cleared on this discussion, although it's still live, and comments still trickle in, which is awesome -- I'm into it, and will respond basically forever! I posted a few follow-up details here. Part 2 of the book will be two weeks from this initial one, on 2023-10-18.

In anticipation of this next one, I'm very interested in feedback from anyone who participated.

How could this have been better / more interesting / more informative?
If you posted, what did you like?
If you didn't post, but read the discussion, what could have inspired you to post?
How could the logistics have been managed better?

Feedback about these issues, or any other meta-comment about this undertaking that you'd care to give, would be warmly appreciated.

110 sats \ 7 replies \ @0fje0 7 Oct 2023

First, a few meta-comments:

I subscribed to this thread shortly after you posted it, thinking that reacting to SN notifications would approximate "following" a conversation. Within a few hours, I had to unsubscribe, since the notifications came in faster than I could handle - and lacked, in my experience, the "context" I was hoping it would provide.
The above may well be just a function of my particular environment (number of tabs open on desktop and mobile, etc) so I'd love to hear how/if others managed to consume the content in a more practical, logical, efficient way?
Of course, it could also be me just showing my age. :)

Then, content-wise: Extremely impressed with the overall quality of the contributions. I've come across fast thinkers and typists before, but this was right up there with the best!

How do you manage to reply to comments so fast?
Are you using speech-to-text, by any chance? Other tools? Surely not all responses can be pre-authored?

I hope to be better prepared for Part 2.

450 sats \ 0 replies \ @elvismercury OP 7 Oct 2023

Speaking personally, it's more dysfunction than anything -- I'm working, have a tab open w/ SN in my browser, and when the little red dot appears on the tab, I pounced, so that the person would feel attended to. Wasn't a great day for my productivity, it must be admitted, but it was fun for me :)

It was all manual typing. The only thing pre-authored were those initial seed questions.

I hope you don't feel like you need to do anything special to prepare, bc you really don't, other than reading the section of the book. And I'll try to make that less necessary to do next time, by providing some prompts that connect to the book but that someone who's been thinking about the btc space for a while can engage with.

It might be useful to @k00b if you described the context you wish the notifications might have had? I've been noodling on that, too, in a more general way: how could you make the notifications maximally useful for following a conversation?

20 sats \ 5 replies \ @k00b 7 Oct 2023

I subscribed to this thread shortly after you posted it, thinking that reacting to SN notifications would approximate "following" a conversation. Within a few hours, I had to unsubscribe, since the notifications came in faster than I could handle - and lacked, in my experience, the "context" I was hoping it would provide.

I can see that happening. What does it mean to follow a conversation to you? What are you hoping to gain?

450 sats \ 4 replies \ @0fje0 7 Oct 2023

What does it mean to follow a conversation to you?

Probably (a lot) more screen real estate, lol. I can imagine following a conversation if somehow the whole thread could be made visible on a single screen, with a little red dot appearing whenever and wherever a participant adds a comment, Probably completely impractical, but that's how I'd describe it.

What are you hoping to gain?

I was hoping the notifications would point me to where we are in the conversation, but I couldn't figure out if/how the notifications were ordered / stacked, if that makes sense?

131 sats \ 3 replies \ @k00b 7 Oct 2023

That's helpful. It sounds like you might want an aggregate of what you've missed rather than a stream of everything that's happened.

I think this would be useful in all our conversation notifications - not just subscriptions. I'll think on it more.

10 sats \ 1 reply \ @elvismercury OP 7 Oct 2023

A trivial way that might help a bit is the notification provides some relevant sub-tree to contextualize the thing. At a minimum this could be the parent, but perhaps there could be more interesting ways to do it.

Notifications could also "roll up" the changed state (complete w/ relevant context) since you last saw it. Or maybe that's what you mean? That's probably what you mean.

I can imagine that re-loading a page (e.g,. this one) could have everything that was here last time I loaded the page be dimmed; everything new to me appears in its current illumination; and everything that would be an update (e.g., my own posts that have been zapped, replies to things I've said) would be highlighted or something. So the change set is easy to spot, and the relevant-to-me changeset is even easier?

210 sats \ 0 replies \ @k00b 7 Oct 2023

That's probably what you mean.

Yep!

I can imagine that re-loading a page (e.g,. this one) could have everything that was here last time I loaded the page be dimmed; everything new to me appears in its current illumination; and everything that would be an update (e.g., my own posts that have been zapped, replies to things I've said) would be highlighted or something. So the change set is easy to spot, and the relevant-to-me changeset is even easier?

Yep that's what I'm thinking to address the problem that this solution implies: Feature request: option to archive seen posts

Feature requests are often the wrong solution to the right problem ... is what I like to say.

0 sats \ 0 replies \ @0fje0 7 Oct 2023

Sounds great, thanks!

20 sats \ 0 replies \ @carlosfandango 4 Oct 2023

Have really enjoyed the considered questions and opinions displayed here - thank you all.

10 sats \ 0 replies \ @q 4 Oct 2023

Awesome!

10 sats \ 1 reply \ @k00b 9 Oct 2023

My main complaint about the book so far is that the first line of the first chapter should've been:

Money is a ledger.

20 sats \ 0 replies \ @elvismercury OP 9 Oct 2023

0 sats \ 0 replies \ @elvismercury OP 21 Oct 2023

UPDATE this recent SN post about a Natalie Smolenski video gives some interesting coverage of some of the same topics as part 1 of Broken Money, esp wrt the credit theory of money.