Much has been written about SoV vs. MoE. I'm not trying to re-hash it here. But as bitcoin's exchange price in US dollars has cracked 100k the investment Slack channel at work started talking about bitcoin.
A long while back I started a bitcoin only channel and we have been growing slowly but with this new discussion we've had kind of a spike in new people. I'm answering a lot of basic questions but something occurred to me this morning. I see a pattern repeating.
I will start by trying to roughly group people.
The Crypto People
The crypto people are usually talking about all the limitations bitcoin has and largely ignoring the reasons, tradeoffs, and benefits. Most of their "arguments" come from ignorance. One thing they don't really say but is implied is that bitcoin will never work as a medium of exchange. Of course, they usually have never heard of Lightning let alone used any of the tech being developed. I rarely hear any of these types of people talk about SoV. They realize that bitcoin is a great store of value. The other thing they talk about of course are those 10x gains.
Minor side note. I have a friend that's into XRP who told me a few weeks ago that bitcoin won't 10x again. I have a reminder set to remind him of what he said in 5 years.
The No Coiners
I've been seeing many questions around bitcoin's adoption and utility as a medium of exchange from the no-coiners in Slack. I assume they are no-coiners based on their questions. They may have "bought" some bitcoin on some service but they are at least new and are clearly not "crypto" people. They also seem to have latched on to this idea that bitcoin is only good for investment. They don't really believe in the SoV but that is really the only thing they are even thinking bitcoin might have going for it. They seem to think of it like a stock. Obviously it would never be a currency. I've pushed back on these thoughts with my own experience with bitcoin and had positive responses.
You see, what both of these types of people think is that bitcoin can't work as a currency. As a medium of exchange. Its not just that they don't think it will be widely adopted as an investment property.
The Vanguard
This is the group you and I fall into. I consider most SN people to be a part of a group I think of as the Vanguard of bitcoin. Some are earlier adopters than others. None of us are late. We believe there is a real need for bitcoin. We are people that have long looked at the world and wondered what was wrong on a very deep level. We have varied political views and ideas about how things should be but we all have deep conviction about bitcoin being a key aspect of making a better future. We are in it for the long term. Its not primarily a way to get rich. Its not about investing. Its about a better world.
We are very different from the average person out there. Some of you might not yet realize this because you are young. You might actually think you are just smarter or special. Of course you are probably smart. Probably smarter than myself but its deeper. You are very different from the average person. If you're like me you will realize that you think about thing most of the people around you do not think about. You think in different ways as well. You question many things others take for granted. I'm not trying to say you are better than others or they are better than you. We are different. We all have value and a role to play in society.
My Thoughts on MoE
A medium of exchange is something widely acceptable in exchange for goods and services. The vanguard will often claim that bitcoin is a medium of exchange. That's true and not true. It can function as one. It is a medium of exchange in certain subcultures but in reality one can't directly exchange it for most goods and services today. Not because the tech doesn't support it but rather because the masses have not adopted it. They don't even understand that it can be used as a MoE.
In case this isn't clear let me explain with an example. Sea shells are not a medium of exchange. No one to my knowledge is using them for this today. I have read that they have been used as currency in the past in certain places. Cigarettes are not a medium of exchange... unless you are in prison. In prisons cigarettes do often function as a medium of exchange in place of fiat paper.
This is what I mean.
- Bitcoin can function as a medium of exchange today
- Bitcoin does function as a medium of exchange today in smaller markets or subcultures just like other things(cigarettes)
- Bitcoin is not a medium of exchange like the US dollar... yet
So, of these three which is least important? The last one.
We all know what bitcoin is and can do. I would argue 99.9% of humans don't even understand bitcoin's value. But, they wonder about MoE. That's the right instinct. I believe outside of the supply cap the ability to transact without a third party is the most important thing bitcoin offers. Without it the supply cap is pretty meaningless. But how do we get there? How do we get to a society where bitcoin is a widely accepted form of payment and exchange?
My View
I say my view because its what I believe. Many have stated this before. Bitcoin in my view will first be seen by most of the world as a good SoV before it will become a MoE. It seems so obvious to me. Granted there are and will be places where MoE is more important or at least equally important but I'm referring to societies where wealth is concentrated.
The people in wealthy nations don't really yet see the need for a new MoE. They do see the need for a place to store their financial energy. But even this SoV aspect isn't widely accepted yet. We haven't even made it that far yet. Kinda mind blowing when you look at the exchange rate today isn't it?
As a significant number of people(who knows what number that is) have bitcoin and value it for its savings properties then they will be more open to its other uses. Right now you have a chicken egg problem. People would not accept something they don't value or understand. People would not spend something they do not have or few accept.
This is why I think it is SO DUMB to argue about SoV vs MoE. Bitcoin can be both. It needs to be both and it will be both. We should be working as members of the vanguard in making sure the ecosystem is ready. Making sure we know the answers to questions. Have written documents. Have produced guides. Have used the tools. Know which ones will work for the people we know.
IMO we still have a long way to go before the average person will "adopt" bitcoin.
I do think there is a intentional attempt to pigeonhole bitcoin as only a SoV. There are a few different reasons for this.
- Shitcoiners know they can't compete on SoV but think they can compete on other things
- Statists don't want to lose fiat control over society. SoV seems to be less of a threat to their power.
- Bitcoiners that run public companies don't want a target on their heads so they downplay bitcoin as currency(Mike Saylor)
- Deep state wants to make bitcoin into just another asset like gold. Paper bitcoiners. Something they can regulate. Its largely a psyop vs. direct attack.
Just realize these are not all the same people and some have different motivations.
Action Steps
Don't be reactionary. Don't get sucked into the wrong arguments. It is easy to do. We all fall into this sometimes but try not to. Focus on these things.
- Bitcoin can be the currency of the world. It will work. We don't need another crypto
- No coiners are not like you. They are almost always believers in the state. They may have more in common with you but they likely aren't ideological about money
- Focus on removing mental blocks. The troupes
- Don't push. Ask questions and answer questions.
- Don't preach to much. You start sounding like a nut or a scammer.
These are my thoughts. I'm still learning and observing.
