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Bitcoin: "A system built for wealth extraction and concentration"
677 sats \ 7 comments \ @crenshaw 6h bitcoin
Mike Green is a staunch bitcoin critic but he's usually worth a listen. From a recent podcast with Danny Moses:
A truly hard-capped currency, as we're describing, can never be used for transactions because the risk of loss during a transaction... if it is non-zero, that closed system ultimately has a far higher cost of capital than any other system and it coalesces eventually to a single holder. It is a system built for wealth extraction and concentration.
I find this critique of bitcoin's hard cap to be the best I've heard yet, mainly because 1) loss is real, and 2) the growing pattern of corporations amassing large amounts aligns. The idea that this would greatly increase the cost of using bitcoin over time makes sense.
He later goes on to talk about putting bitcoin vs gold through a posiwid framework and how the exercise produces very different outcomes for each. This is related to the long-running deflationary vs inflationary money debate, but his main point is cogent (emphasis mine):
The fixed release schedule of bitcoin does not actually reward innovation. You can't speed up or increase the fraction of bitcoin regardless of the price of bitcoin. That actually means that the price of money rises relative to everything else in bitcoin and you end with a fantastically deflationary system.
Credit is a mechanism that allows people to access money before they have actually had the capacity to earn it all in advance and save it. It is a tool for the young to access capital before the old are willing to give it to them. And you can't have a debt-based system, you can't have a role for debt, in a deflationary currency. It's harder to pay that debt in the future than it is otherwise.
So, everything about bitcoin is actually bad for young people, except for the excitement of thumbing their nose at old people.
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72 sats \ 1 reply \ @south_korea_ln 4h
Credit is a mechanism that allows people to access money before they have actually had the capacity to earn it all in advance and save it. It is a tool for the young to access capital before the old are willing to give it to them
Debt is also a mechanism for the olds to extract money from the young before they die. Borrow from future generations.
That's something worth all the mental gymnastics in the world to argue it is actually a good thing for the young. /s
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0 sats \ 0 replies \ @crenshaw OP 1h
I think it cuts both ways. The ability to take on debt earlier in life can come with a lot of benefits, basically enabling someone to borrow against their future to take a risk on themselves. That can pay off big in the long term if leveraged well.
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0 sats \ 0 replies \ @CarlTuckerson 2h
Bitcoin isn’t wealth concentration—it’s wealth decentralization. No oligarchs, no gatekeepers, just code leveling the playing field the Fed keeps flipping over. 🪙✊
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0 sats \ 0 replies \ @denlillaapan 3h
Damn right.
Dude just doesn't realize what unjust wealth it's extracting from!
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0 sats \ 2 replies \ @Diego 5h
What is meant by ‘It is a tool for the young to access capital before the old are willing to give it to them.’
Is the like inheritance?
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0 sats \ 0 replies \ @fiatbad 4h
Starting a business as a fresh college grad in your 20's, might be a good example.
In a Bitcoin world, no one would give you the capital necessary to start the business because you're young, unproven, high-risk. In a credit-based world, it is relatively easy to get the capital.
Based on this, it would seem that Bitcoin is anti-capitalism.... anti-entrepreneurial.
While there is truth to this, I think the truth is somewhere in the middle. Young entrepreneurs could still get capital in a Bitcoin world, but they would have to work harder to convince the capital allocators. They wouldn't be able to "fake" their way into it, the way they can today (ahem... SBF).
It's a very interesting discussion point, nonetheless.
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0 sats \ 0 replies \ @ken 4h
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