... What problems would this fix, really?
I can't count on both hands and toes how often I've heard people shout "Bitcoin fixes this!" at virtually any problem they lay their eyes on, only to fail or fall silent when asked how Bitcoin will fix it, or if it's a critic; Why Bitcoin can't fix it!
Let's get back to the initial question, shall we?
It's a quite simple one, really; What problems can Bitcoin fix once it's a globally accepted monetary medium, and what problems can't Bitcoin fix, no matter Bitcoin's status?
Here's a working theory I have. I think there are major still gaps in my understanding, but here goes:
If Bitcoin became a global monetary medium / reserve currency, I think it could make a solid dent in what I see as one of the most profound and systemic environmental problems.
Easy creation of soft money by reserve banks and commercial banks places a massive burden on future populations and ecosystems for this reason: every dollar created today is a future claim on a finite amount of biophysical resources.
New money and new debt claims are made every second of every day, but when these transactions happen and new resources are then owed to someone or something the future, there are no new trees created, no new lithium, oil, sweet potatoes, or cotton.
So under the current financial system we're racking up a massive and unlimited balance sheet in which some entities are rich "on paper" but there will logically come a time when those claims can't be met by biophysical reality.
I wonder if that time is already here, and if there was a run on the planetary resource bank, would there be enough resources to even cash out?
One might argue that inflation takes care of this, as a dollar created today won't be worth much in terms of tangible wealth (eggs, wool socks etc.) in 50 years time, so the debts we are racking up currently are less than they appear to be.
There may be some truth in that, but seems to me in a practical timeline of a decade or two, our I.O.U.s are still vastly outpacing what's actually available to extract from the planetary system, and they get cashed in a lot faster than most resources can regenerate (and lots can't). And even with inflation eroding what the claims are actually worth, our spending outpaces that.
Someone might say that market price signals also take care of this to some extent. If we run short on lumber, as happened recently, the dollar price goes up to better reflect it's scarcity and value. But at the speed new money is being created, I'm not so sure the price signal works as efficiently as it should in theory. I'm wobbly on this point, need to learn more.
In my understanding, this whole biophysical debt situation would be less possible if we had a harder form of money.
Ultimately we exchange money for physical goods and services (even if they are bits of information on silicone), and ultimately we exchange energy to extract or manufacture those goods and services.
So... To finally come to the crux here... I think Bitcoin could fix at least some of this, and maybe a lot of it, as it is a hard money which is directly connected to energy.
Unlike unlimited fiat, we can't just generate or capture more Bitcoin without significant energetic cost, either by mining it directly or exchanging goods and services for it, which also cost energy.
Bitcoin adoption seems like a step in the direction of a monetary system more closely linked to the laws of physics and biology. A system where market forces could send more accurate price signals, and could make more rational and sane decisions about what's worth what, and how much "what" is actually available.
TLDR: infinite fiat and debt = infinite resource claims on a finite system. Bitcoin fixes this as a finite hard money which is linked to the cost of energy. Real wealth in any form at it's base = energy.
These are still back-of-napkin ideas for me, maybe some of you have thought about this a lot harder than I have. I welcome your input and pointing out any gaping holes in this argument, or further suggested reading
This is a great writeup. Infinite debt chasing finite resources nicely captures the argument in a succinct and memorable way.
I think environmentalists are generally hostile to Bitcoin, but this way of putting will force them to at least think about whether fiat is really better for the environment.
Awesome, interesting theory mate, I really like it and I'm with you on that; "infinite fiat and debt = infinite resource claims on a finite system".
A capped monetary medium could very well put a hold on this, cool.
Please be sure to keep on working on this, would love to read an in-depth post about it!
I'll check back in after people have a chance to weigh in, but a good place to start would be problems that have popped up since abandoning the gold standard. In particular, look at the reasons governments have abandoned gold standards in the past.
447 sats \ 6 replies \ @Fabs OP 5 Jan
Hah! You have a list at hand or what? 😆
I like this one:
Much like the Articles of Confederation, sound money was working too well for the elites to allow it to continue.
That hurts me as a simple, common pleb.
working too well for the elites to allow it to continue
That was really poor wording on my part. I meant that the elites put an end to sound money because it was benefiting everyone else. Hopefully, that's how you read it.
640 sats \ 0 replies \ @Fabs OP 5 Jan
I did read it like that on the third occasion, yes. 🤫
Many of the historical reasons for abandoning the gold standard had to do with funding wars. At a glance, I would also say that's something that has increased since America went off the gold standard.
I doubt Bitcoin ends all war, but sound money is not something war mongers like very much.
Bitcoin is an antiparasitic It's a tool for storing energy for the future, resistant to parasites feeding on your labour
It doesn't power down all the nukes in the world, or stop a few scientists from messing with furin cleavage sites and spreading a virus across the entire planet. All of us still share an atmosphere with these psychopaths.
I think Eric is spot on here, listen to at least 11:11 - 19:55 about Project Defuse.
Bitcoin is perfect energy money, but our fundamental understanding of energy is incomplete. Academia has been just as dishonest and manipulative about physics for the last 80 years as they have about economics.
If the economics field has been tainted and manipulated by TPTB trying to consolidate power, why wouldn't they do that exact same thing in physics, a much more consequential field of study?
I believe they have.
Well-questioned. I have also found silence when the questions are uncomfortable.
Which questions in particular?
About Bitcoin fixes this! I don't have any specific memories at the moment.
I ask because I agree with the sentiment that Bitcoin "fixes" many, many things by changing incentive structures and taking power away from authoritarian governments.
Could you provide a few examples?
  • Crime. Why do most people steal? Because they want something that they can't afford. What does Bitcoin do to costs? It makes things cheaper.
  • It forces people to work and give effort if they want to make a living instead of living off of other people (Medicaid, food stamps, etc), thereby making society more productive and efficient overall.
  • Reduces all forms of red tape by minimizing or eliminating government. Great for companies and great for people building for themselves.
  • If a government exists at all, it makes that government more efficient because it actually has to provide services that people want for it to continue existing.
  • It liberates those that would have been imprisoned otherwise for things that did not harm another person, their property, or their rights.
  • It may increase charity as those who are most willing to give typically can afford to lose what they give.
  • It rewards those that create and give real value instead of potentially being subsidized.
I could go on and on.
Crime. Why do most people steal? Because they want something that they can't afford. What does Bitcoin do to costs? It makes things cheaper.
There's not widespread agreement on why most people steal, but there's widespread agreement on why they don't steal, and the reason they don't steal is what you've just claimed. You're giving the same wrong folk wisdom as do people who think rapists are extra horny or their victims were dressed too sexy. Pick up an introductory book on the sociology of deviance if you want to actually learn about this topic.
I could go on and on.
Going on and on with facile explanations for complex issues is exactly what OP was trying to prevent. Your list is a masturbatory fantasy that demonstrates that you actually don't know a thing about any of the topics you're opining on; although I can hardly blame you, since this whole ecosystem is full of similar horseshit, and you can make a lengthy "career" as a talking head on btc podcasts preaching this same Good News.
I was about to delete this because it's me being an aggressive dick, but then I saw this comment of yours and figured you could take it.
"OP-Approved" 😉
Your're right. I worded that poorly and that's what I get for rushing while at work. What I meant was: [In my own experience with the criminals in my family and the ones they've associated with] people often steal because they need a saleable asset to make ends meet or just because they want some extra value.
Sure, there are those that do it for fun too. I'm not insinuating that Bitcoin eliminates all crime, but it definitely de-incentivizes some crime.
Hm, I'm having a hard time on some of the examples you've listed above;
The first point goes far beyond simple stealing, and people who steal do so not only because they can't get it the fair way, it's also because they get a kick or something akin to that out of it, or so I think at least.
The second point taps into the state and it's welfare-programs, and I don't see how or why these would change or stop existing because we have a capped monetary medium, for the ones depending or profiting from these programs won't be happy to hear that these are being put to rest.
The third point needs some expanding.
The fourth point makes sense, but only when said government is dependent on the taxpayers to actually pay those taxes out of free will, worded otherwise; People pay the government sum "X" for services they value, such as; a working police force, maintenance of existing infrastructure and the expansion of it et cetera.
The fifth point needs some expanding as well.
The sixt point isn't different in such a setting as is today, the opposite may come true; If a currency increases in value over time, people may be more * hesitant* to give anything of said currency away.
The seven point I agree on, it's either do or die.
I'd like to hear your take on this.
Thanks, thanks :)