Bitcoin is the lubricant
1640 sats \ 14 comments \ @kr 18 Mar bitcoin
Bicycles need lubricants to reduce friction between gears and chains, allowing you to efficiently transform your pedaling energy into motion.
While lubricant is important to ensure your bike functions well, it doesn’t eliminate the need for you to pedal it.
Likewise, money is the economic lubricant that reduces friction between buyers and sellers, allowing you to efficiently transform your past work into goods and services.
While money is important to ensure an economy functions well, it doesn’t eliminate the need for buyers and sellers who are working to gather more resources.
What’s my point?
When estimating Bitcoin’s future value, consider how much money will be needed to act as lubricant for a functioning global economy, rather than dividing the total size of the global economy by 21 million.
Our ~$500 trillion global economy is a machine that functions well with ~$20 trillion of gold and fiat money acting as a lubricant, a number that would be even smaller if we all used the same currency.
Bitcoin is not the machine, it’s the lubricant.
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161 sats \ 0 replies \ @halalmoney 18 Mar
Prediction: part of Bitcoin’s effects will be a downward drag on GDP as it will reduce low value actors of consumption. This will be more than offset by Bitcoin underpinning long-term productive activities e.g. decentralised power generation and the production of high-grade artifacts.
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238 sats \ 0 replies \ @ambosstech 19 Mar
Love this!
As bitcoiners, we have to catch ourselves when we've become accustomed to moralizing the choice of asset. While Bitcoin is a moral choice of money, that shouldn't extend to moralizing the use of money. Money will be used for good and bad things and the tech needs to work in both cases, especially at the protocol level.
Bitcoin will be used for speculation, gambling, drug trafficking, terrorism, but it will more importantly be used for your child's allowance, humanitarian projects, buying a home, and settling a dispute.
Bitcoin is neutral and that is one of its greatest features.
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174 sats \ 1 reply \ @DiedOnTitan 19 Mar
Absolutely. Common phrases in English support this notion: Grease the wheels, grease the palm (bribe), throw money at the problem (to get it unstuck), money makes the world go round, etc.
An interesting orthogonal question would be to ask what applications of value transfer does Bitcoin unlock that are simply not feasible with fiat? For example, micro-transactions. We cannot use PayPal or credit cards or even cash for any single transaction under $0.01. Far higher for credit cards. Additionally, credit cards and PayPal have rigid onboarding requirements. One needs a bank account for starters. But right here on @sn, we regularly transact with zaps that are less than a penny. And there are certainly people that are unbanked or have de-banked themselves. Also, in the the world of IoT we will likely require micro-transactions to keep the swarm "lubricated".
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16 sats \ 0 replies \ @kr OP 19 Mar
yeah great point, i think it’s likely that a better lubricant opens up totally new opportunities that grow the entire economy.
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166 sats \ 1 reply \ @arrivederci 18 Mar
This post appears to only be looking at the medium of exchange function of money, while ignoring its store of value function
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10 sats \ 0 replies \ @kr OP 19 Mar
you’re right that the bike lubricant analogy doesn’t account for a store of value, but the calculation i made at the bottom of the post does.
to close the loop on the bike analogy, imagine money is the entire bottle of bike lubricant (not just the amount applied to your bike).
you might spread some on your gears and chains as needed, and keep most of it in the bottle for future use.
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89 sats \ 0 replies \ @BlokchainB 19 Mar
I think it works well for the Western and developed nations.
But on mass it’s a terrible system for the majority of the world. Hopefully bitcoin is a much better system over the next 100 years
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109 sats \ 4 replies \ @Undisciplined 18 Mar
My daughter asked what I was reading and I told her she might not like it. It's about transactions costs and I like thinking about transactions costs.
It's very cute to hear a four year old say "I like transactions costs, too."
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23 sats \ 1 reply \ @elvismercury 18 Mar
She would love Michael Munger's podcast, then, as might you.
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27 sats \ 0 replies \ @Undisciplined 19 Mar
I probably would, but I haven't listened to it. I didn't even know he had one. I've heard him on Econ Talk dozens of times. He's one of my wife's favorite guests on there.
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23 sats \ 1 reply \ @SimpleStacker 18 Mar
Maybe she can grow up to be a lawyer then lol
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0 sats \ 0 replies \ @Undisciplined 18 Mar
Yeah, she might not have meant it the same way I did.
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72 sats \ 0 replies \ @0xbitcoiner 18 Mar
Bitcoin Is The Alarm System
🔗 #470447
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62 sats \ 0 replies \ @DesertDave 18 Mar
I like the a analogy. Thank you.
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