…And venture capitalism dies under a bitcoin standard. Why take risk to generate high returns when you can just buy and hold bitcoin to generate high(er) returns with much less risk?
Discussion
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high time preference
There will always be people who take more risk to generate a potential gain that is higher than #btc. The question is whether they justify that risk with their savings/investments.
On a btc standard, people taking those risks will be the hyper productive who vastly produce more value than they consume. This is in contrast to today's degen gamblers who privatize their profits and socialize their losses through absurd low interest loans and bailouts.
How is a yield-bearing stablecoin any different than a run-of-the-mill financial instrument in function (like an etf)? I admit calling it a "stablecoin" is a misnomer though that is the only uniquely suspicious thing that the crypto side brings, and is likely necessary for compliance reasons.
I disagree. I don’t think there are many investments at scale that deliver >25% annual returns based on pure productivity gains. Rather, most gains in the last 50+ years have been through financial engineering and monetary policy manipulation and poorly underwritten debt.
The actual productivity of most investments will be reasonably close to the rate of global GDP growth with some variation based on geographic characteristics and local resource density. There might be pockets of greater productivity BUT it won’t be centralized at scale like we have via these massive companies in public markets today.
And every venture capital investment intends on flipping out to public markets in the end…same with private equity.
The Peter Thiel (Zero to One) thesis for venture capital is completely destroyed in a bitcoin standard.