27 sats \ 0 replies \ @telcobert 21 Apr \ on: What Would Carl Menger Think Of Bitcoin? libertarian
Answers below already explain some aspects how Bitcoin is not imposed by law and is very much evolving in a Darwinistic way from prior experiments in digital money, beginning with David Chaum, etc.
Bitcoin is also still evolving as it is not yet competitive with USD, as evidenced by the lack of mass adoption vs. dollar notes, dollar deposits and USDT tokens, due to its 6 to 10 times higher volatility. Bitcoin only sees some use as a Store of Value (hedge/investment), negligible use as a Medium of Exchange, and no use as a Unit of Account.
Therefore, the next step in Bitcoin's undoubted evolution will likely be some mechanism, system, and institution which give it the requisite elastic supply so its volatility can be competitive with the big nation state fiat currencies.
Gambling oriented real-money betting exchanges should never be called "prediction markets" in first place. Information oriented prediction markets like Prediki are way more precise, more informative and most of all, do not ask for real money payment from participants.
That said, using them needs quite some methodological know for proper application to the forecasting issue at hand.
At the moment, Javier Milei would dollarise the country, according to the Ocampo/Chachanosky plan. The hope is that he will liberalise money and banking sufficiently to allow business use of Bitcoin credit money and the legal operation of mints running Bitcredit Protocol. It could mean business adoption for the first time before Bitcoin loses Argentina to the dollar.
Agree with the fixed liberty sentiment, decentralisation being the most embattled one of them. At some stage, it may even be considered not only a citizen's right but even duty to run a validating node, just like voting at an election.
Is nothing. The opposite of what you seem to believe. There is a 100% capital requirement for holding bitcoin. It is 0% for holding EU government debt. It is prohibitive.
You are asking the right question when focusing on companies, as "Bitcoin adoption" is a completely vague concept in the public debate, with all kinds of statistics trying to prove that it may be happening. If some new digital thing is right, it will be adopted very fast, as seen with ChatGPT.
The difficulty has been publicly known right from the outset in 2009. Reticence to learn or lack of knowledge has absolutely nothing to do with it. The difficulty is simply that Bitcoin is volatile.
Companies in the real economy need a stable money. They either have cash piles or they have debt. If either fluctuates 10 % in a day as Bitcoin a few days ago, it can wipe out an annual profit. The adoption of Bitcoin stops before it even starts. As is, it cannot be a money.
That is why the statutes of central banks prescribe a stable purchasing power and value of their currency as a top responsibility. Evidently, if money demand of the real economy fluctuates all the time and Bitcoin base money supply is fixed, then the value of Bitcoin fluctuates, which is the opposite of what's needed. Once people realise (timing is difficult to tell) it will drop like a stone.
I trust that answers your question.
PS: There is a project which is writing code to fix the Bitcoin supply elasticity problem and stabilise Bitcoin's value, Bitcredit Protocol on www.bit.cr (disclosure: I am involved with it). It is a highly controversial project, though, as most hodlers of bitcoin today actually like it to remain a highly volatile asset, not as a rock-steady unit of account. Not that it matters what they want.
Countries in financial crisis should be interested. Argentinia might benefit most: great country, abysmal political system.
The worst case WILL happen: the way of the tulips, if the last generation bitcoiners don't change. It will be deservedly go back to $0, as these bitcoiners have lost sight of what bitcoin was supposed to be: the best money mankind ever had.
They have set their inner eye on the ridiculous idea of "to the moon", on getting rich quick by buying a few measly sats and sitting on them till they grow a beard. That's not the way. Speculators like Black Rock get this type excited, not advances on the ascension to money.
It is telling that projects like Bitcredit Protocol – an effort I am involved in - which write code add to expand bitcoin capabilities and functionalities for the real economy – get support and contributions less from this "∞/21m" type bitcoiners but mostly from bankers who are sick and tired of the fiat system going dystopic and increasingly out of control. That's the people who are willing to put in the effort to put things right, not the "sat stackers".
In an economy using a hard money standard, is there a way to express the value of the total supply of the money?
The value of the money depends on both, the supply and the demand for money, so no. You will just know the quantity, its value is the inverse of whatever commodity you wish compare, at marginal utility
For example, how would it relate to total non-monetary wealth?
There is no relation to a stock number, money demand is mostly a function of expected transactional needs, flow.
Or perhaps the present value of all future production of goods?
Certainly not. Money is a present good.
Does velocity come into play somehow?
No, velocity is merely a descriptor.
If there isn't a strict equivalence relation, is there a compelling lower or upper bound?
See answer 1.
Or is the question unanswerable, perhaps due to the distributed nature of an economy?
Kind of, because it is the subjective money demand of individuals which determines aggregate money demand. The other reason is that there is money and claims to money which both serve as medium of exchange. In a fiat system, they are indistinguishable, in a gold system there are banknotes, in a bitcoin system there are the proposed bitcredits.
Does the answer change if the assumption of hard money is removed?
No.
Is anyone aware of any literature addressing the topic?
There is still no better and more rigorous than The Theory of Money and Credit by Ludwig von Mises,
It's a Free Software which makes Bitcoin usable for real economy.
We are currently investigating candidate technologies for the retail phase.
See: https://www.bit.cr/flow#h.xtyba39fxhoi
We'd be most interested in a chat about the ins and outs of using Fedi for that part
We are considering Fedi as a candidate technology for retail phase of Bitcredit Protocol. Fedi custodial risk is a bummer, though. Still, it might be worthwhile to have a chat, sometimes.
Yes, there is a possible role for Fedimint in the retail part of Bitcredit, although this introduces some custodial risk. An alternative solution may be ARK.
The novel solution of Bitcredit lies elsewhere. It mints bitcoin-denominated currency from commercial e-bills issued by businesses, real economy value, instead of just transforming or locking financial value.
Let's say, Bitcredit is a new on-ramp for accelerated adoption by the real economy.
Site has 404 errors
Feel free to provide details in the project's telegram channel for a bounty. https://t.me/bitcredit_community
Yet another shitcoin
Definitely not. It is bitcoin credit money, an "M1" on bitcoin base money "M0".
Thanks for your questions.
it aims to create a new non-inflationary and elastic currency backed by Bitcoin.
Kind of. Let's be precise:
- Bitcredit is a currency redeemable 1:1 in bitcoin.
- As it is credit money it is elastic, yes. However, it is strictly limited by proof of real value.
it sound like you're making a currency with a fixed exchange rate to Bitcoin.
Yes, the buildup of this elastic bitcredit M1 on top of fixed bitcoin M0 will stabilise the value of bitcoin AND bitcredit, as it is 1:1 to bitcoin.
How is the bitcredit UTXO redeemable for a bitcoin UTXO if it's backed by a "broad basked of goods"?
When buyers pay sellers of real goods (or services) with a bitcoin denominated e-bill, their liability is "backed by the goods" they bought. When these buyers then pay the bill of exchange at maturity in bitcoin on mainchain, this provides the input for bitcredit redemption.
So e-bills are a derivative of bitcredits?
No. commercial e-bills denominated in bitcoin are the raw material from which wildcats (Bitcredit Full Nodes) mint bitcredits.
Hope that clarifies.