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Paradigms

One way to think about when big things change -- when a paradigm shifts, as Kuhn would put it -- is when the existing paradigm accrues enough damage from how it mismatches the world (this is obvious) but also when there's something new that can account for those errors better than the existing paradigm (this is not obvious to most people).
In other words, it's not enough for the Current Thing to be broken; a suitable replacement must also be waiting in the wings. Or, as Carlota Perez would have it, the infrastructure for the New Thing has to be sufficiently built out:
Two decades after the big-bang of the Age of Steel, profound changes had to be made again. The ‘belle époque’ based on the unleashing of the full potential of the third paradigm, with its truly international markets, required world-wide regulation (from the general acceptance of the London-based Gold Standard to universal agreements on measurement, patents, insurance, transport, communications and shipping practices), while the structural changes in production, including the growth of important science-related industries had to be facilitated by deep educational reforms and social legislation.
More briefly: a lot of stuff had to be in place before the Age of Steel could take off, despite the importance and obviousness of steel's potential benefits.
It's also important to note that even if this thing waiting in the wings is clearly and demonstrably superior in regard to a really high-stakes issue, that alone isn't enough. A sad illustration of this is that a dude named Ignaz Semelweis figured out that having doctors wash their hands when they delivered babies reduced maternal mortality drastically. He demonstrated it empirically. But handwashing wasn't standard practice, people didn't understand why it worked, and doctors felt that it offended their dignity, for reasons that I've never understood exactly.
What do you think happened when Semelweis wasn't in charge anymore?
The director who took over from Semmelweis at his last clinic stopped the practice of handwashing. Maternal mortality rates immediately jumped sixfold.
[...]
The virtual elimination of childbed fever happened not because of Semmelweis’s contributions, but instead thanks to Louis Pasteur’s. Why? Because Pasteur changed not just a procedure, but an entire science. In the 1860s, he conducted a set of experiments that demonstrated to physicians not only that Semmelweis had been right, but why he had been right. [2]
Truth isn't enough, even when it's easily demonstrated and replicated. A slew of social forces have to be aligned, too.

A thought experiment

So this has got me thinking: what is the best possible reasonable scenario[1] for btc to be maximally successful ten years from now? At first I was going to define what maximally successful meant, but upon further review I'll leave it unspecified, so you can tell me what it means to you.
Once you've answered that, I'm curious about the converse, too: what's the worst possible reasonable scenario that would prevent bitcoin's success in ten years?

Notes

[1] I use reasonable scenario here to mean: something that could plausibly happen outside of your hopium-derived fantasies.
[2] The story of Semelweis vs Pasteur has been covered in a bunch of places, but I got this quote from this unlikely source.
These are right off the dome. If I think of something better, I'll circle back around. I'm also choosing what I think are very high probability scenarios, rather than stretching the range of plausibility.

BPRS

A large number of nations and US states make some official recognition of bitcoin as money. It's still a relatively small minority using bitcoin regularly, but they're able to do so out in the open with fairly high confidence that they won't face reprisal from the state.

WPRS

I've talked about my concerns that the US will bring civil asset forfeiture against the bitcoin community. I could imagine them creating some sort of "clean" credential to certify that certain sats have not been used in criminal activity, with all other sats being unapproved.
If they're draconian enough about seizing unapproved bitcoin and effective in getting other nations to follow suit, I could imagine our vision for bitcoin being extremely stifled.
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A large number of nations and US states make some official recognition of bitcoin as money.
That's a good one. I think relatively small number of other governmental entities legitimizing btc would go quite a long way for a host of reasons.
I could imagine them creating some sort of "clean" credential to certify that certain sats have not been used in criminal activity.
I'm not a lawyer because I have a modicum of a moral compass (j/k @siggy47, mostly) but scenarios like this kind of make me wish that I was, bc I have so many questions. I literally have no idea if such a thing is 2/10 difficulty, or 7/10 difficulty. It would be nice to have actual knowledge about what it would entail.
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I’m also not a lawyer, but libertarians have been sounding the alarm about civil asset forfeiture for quite a while.
The state can seize anything that is claimed to be suspected of being involved in a crime and the burden is on the owner to demonstrate that it wasn’t.
Considering how many potentially taxable events have gone unreported with bitcoin, it would probably be easy to go after a lot of it on those grounds alone.
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That would move a large portion of the economy to the gray zone. No compliance, no taxes, no nonsense. But also no legal protection.
Of course not everything can move there. You can't buy a house or a car outside of the purview of the state, as those things need to be registered with the thugs.
Bitcoin would split into clean and dirty UTXOs. Dirty bitcoin would be cheaper as clean bitcoin can be used in the gray economy, but dirty bitcoin costs sats to clean and make it spendable in the compliant economy.
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That's very much the scenario I'm imagining.
The reason I'm concerned about it is that it creates two adoption hurdles for us: 1) getting people to use bitcoin at all and 2) getting them to use dirty bitcoin.
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83 sats \ 15 replies \ @Fabs 1 May
"Dirty bitcoin" is nothing but a human construct that creates problems where there are none; there is no "dirty" or "clean" bitcoin, there's simply bitcoin.
They [the gov] isn't burning or destroying money or other assets they seize, things that could be labeled as "dirty" just as well, no, they use those assets to improve the police, for example, by acquiring more and better police cars, uniforms, guns, training, et cetera---and there's nothing wrong with that.
Why should it be different with bitcoin?
They [the gov] isn't burning any seized ("dirty") bitcoin either, no, they auction it FFS, they profit off of it, FFS.
Hypocrisy is running wild on the upper levels.
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I get all that. My concern is essentially that they can create a barrier to adoption by incentivizing merchants to only accept "clean" bitcoin. If adoption develops along those lines, it'll be a huge setback for "freedom money".
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83 sats \ 13 replies \ @Fabs 1 May
People need to start being rational and think for themselves, not simply do as told by big daddy gov.
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Sure, but they're not going to.
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22 sats \ 11 replies \ @Fabs 1 May
One of the reasons why I'm an outspoken misanthrope.
407 sats \ 4 replies \ @k00b 1 May
I have a terrible gauge for what's reasonable. I tend to be pessimistic toward things out of my control. To expect change I have to believe incentives, or their visibility, will change.
For me, time-unbounded maximal success for bitcoin is that it's nearly as easy to use self-custodially as it is custodially. I think this is how it survives all the forces that want to destroy it. I think we can get closer to that in 10 years, but it's unreasonable to think it'll happen unless bitcoin is seriously attacked (and it looks we'll be getting another degree of that "gift" soon). Any other kind of success I can think of likely leads to bitcoin going the way of gold.
If central banks begin holding bitcoin, and bitcoin becomes a sanctioned money, and before we get easy self-custody, (I think) it leads to us trusting entities that aren't invested in bitcoin's long term success and we get soft on the things that make bitcoin valuable.
I think the best possible scenario for bitcoin is it's severely and progressively attacked and we anticipate and adapt to survive it. The worst possible scenario is bitcoin isn't attacked, becomes ubiquitous, and is only then attacked and more people suffer a loss from it.
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I think the best possible scenario for bitcoin is it's severely and progressively attacked and we anticipate and adapt to survive it. The worst possible scenario is bitcoin isn't attacked, becomes ubiquitous, and is only then attacked and more people suffer a loss from it.
I had an answer like this in mind, but not as elegant as the way you've put it. I had imagined it as a basketball metaphor:
Think of btc as a team in the NBA at the beginning of the season. The best thing that could happen is if the team faced enough adversity that they were forced to suffer, to scramble, to fight with each other and figure out who to be, but not so much adversity that they were torn apart by it and fell into learned helplessness.
Over the course of the season they slowly improved, with many ups and downs, but got on a run before the playoffs -- they started really putting it together. In the playoffs, every series was close, but high variance -- they won big and they lost big. They faced elimination. They had to manage euphoria. They made adjustments. Round 1 demanded a somewhat different approach than round 2. Different heroes emerged each series. The players grew and evolved and adapted.
They win the title in the end, exhausted but jubilant.
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Love the metaphor. It reminds me of how gambling addicts are thought to be made by their early wins, or the idea that peaking early is bad.
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I have a terrible gauge for what's reasonable.
I feel like this is a setup for the punchline "and that's why I was able to create Stacker News." Building a fully functional site with the features it has from the ground up seems like something that would have daunted reasonable people.
I think the best possible scenario for bitcoin is it's severely and progressively attacked and we anticipate and adapt to survive it. The worst possible scenario is bitcoin isn't attacked, becomes ubiquitous, and is only then attacked and more people suffer a loss from it.
This makes sense, and it's an interesting conundrum. BTC needs to be attacked severely to thrive, but we also don't want attacks that fully succeed, either. Sort of like the carnival game where you have to roll the bowling ball hard enough to get over a hump, but if it's just a bit too hard, it ends up where you started.
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100 sats \ 0 replies \ @kepford 2 May
I think you are on to something. Its easy to get complacent. Its easy to say you believe or think things but when someone points a gun in your face it becomes all to real. Talk is cheap. Thoughts don't change things. Actions do. It was thinking through game theories that really opened my eyes to bitcoin so I think I'm in agreement with your thoughts here.
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Best case scenario- Bitcoin supplants gold as the dominant global, neutral money and is widely held by individuals and institutions. Significant adoption as a medium of exchange is underway. There is a vibrant ecosystem of layer 2/scaling solutions to support the base layer. Hash rate is stable or growing. Base layer and ancillary layers are in demand but not stretched beyond capacity.
Worst case scenario- Bitcoin was only ever seen as a trading vehicle and way to make fiat gains. It didn’t reach its full potential and faded into obscurity when number failed to continue going up aggressively. It is still around in a decade but no one cares besides hardcore bitcoiners. Everyone else has accepted their CBDC, complete surveillance, perpetually exploited and extracted from, fate. Maybe Bitcoin will survive the ice age and be hope for a future generation but this generation has failed.
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50 sats \ 0 replies \ @jgbtc 1 May
When I think about your worst case (which I do from time to time) I always come back to: "What is happening to USD during all this?" Will people just bend over and take hyperinflation? Maybe so, but like Christine said, if there is an escape that escape will be used. Anyways, it's interesting to think about.
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Your best case scenario strikes me as more or less the path we're on. That's nice.
I didn't include it in my description, but part of my worst case scenario is that adoption stalls out because most people don't see the upside in using bitcoin compared to whatever digital fiat is in use.
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The ideas of hyperbitcoinzation and fiat being dead and Bitcoin as the global reserve currency didn't seem feasible in only 10 years. A few steps closer to that from where we are now did.
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Best scenario
  • Storing your funds in non-custodial becomes as friction-free n idiotproof as saving the equivalent with conventional & digital banks, so people are incentivised to switch to BTC saving
  • Abolishment of CBDC projects haha
  • A viable creator’s economy is flourishing, empowering creators to legitimately live off the sats they earn from various assignments
  • Taxation laws get more clarified so that it makes business sense for businesses to pay their employees with BTC
My two sats’ worth
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CBDCs yikes we need to educate more people as they get confused big time on this one!
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If governments (especially Westen governments) keep doing what they are currently doing, with that i mean the fiatisation of all aspects of society, bitcoin's BPRS will naturally emerge...
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