We don’t need corporations to adopt Bitcoin as a medium of exchange right away—we need people to adopt it first. Local groups, communities, and small producers trading and helping each other, rejecting dirty fiat not because it’s convenient but because they want freedom. Freedom from a system designed to exploit. The transition starts with individuals—holders who want to break free from fiat for good. Like, if you’re a Bitcoiner and you sell a product but you don’t accept payments in Bitcoin, you’re just larping.

But this movement also requires a shift from relying on centralized services to embracing decentralized servers. Twenty years ago, running your own server was expensive and impractical, which handed power to tech giants like Google, Facebook, and Apple. Now, running a server is cheaper and easier—and in another 20 years, it’ll likely be trivial. Imagine a future where every third house has a home server, used for running a Bitcoin node, hosting email, creating content, managing your own Nostr relay, storing files, hosting a personal website, and even operating an online store.

With a single device, all these corporate walled gardens crumble, just like legacy media has already. And the thread that ties it all together? Your Bitcoin wallet. This vision is achievable within our lifetimes—but it’s threatened by what I call the “normie effect.”

Saylor speaks to normies—offering them the language of convenience and security. And while he isn’t one of them, that’s the angle he plays. But Bitcoin doesn’t need more Saylor-style marketing. It needs more paranoid crypto-anarchists. People who run nodes. People willing to part with some of their Bitcoin to kickstart a peer-to-peer economy.

I’m optimistic—probably a bit naive—but I want the dangerous new, not the crappy but safe old. I don’t want property in cyberspace, digital art, or backed by energy commodities. I don’t want corporate suits defining Bitcoin’s purpose or government bureaucrats giving me permission to run a node or use a self-custody wallet.

I want money you can’t fuck with.

I asked DeepSeek to critically analyse my post. It has some interesting insights: **DeepThink Analysis: Bitcoin's Store of Value vs. Medium of Exchange Dilemma**

*Breaking down the post’s arguments, assumptions, and implications through first principles and economic theory.*

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### **1. Core Premises of the Argument**

The post hinges on two foundational claims:

1. **Store of Value (SoV) depends on Medium of Exchange (MoE)**: A monetary asset cannot sustainably function as a SoV without being actively used in transactions.

2. **Bitcoin’s custodial stagnation risk**: If Bitcoin becomes trapped in passive custodial accounts (e.g., ETFs, exchanges), its network will atrophy, eroding its value proposition.

---

### **2. Breaking Down the Argument**

#### **A. Store of Value vs. Medium of Exchange: A False Dichotomy?**

**Post’s Claim**: Bitcoin risks becoming a “sub-par SoV” if it fails to gain traction as a MoE. Gold is cited as a flawed SoV due to its limited MoE utility.

**Critical Analysis**:

- **Gold’s Dual Role**: Gold’s industrial/ornamental demand provides intrinsic value, whereas Bitcoin’s value is purely monetary. This makes Bitcoin *more dependent* on its monetary utility (MoE/SoV) than gold.

- **SoV ≠ MoE**: Historically, many SoVs (e.g., art, collectibles) lack MoE utility but retain value due to scarcity and demand. However, Bitcoin’s value is *network-dependent*—if its transactional use collapses, its security model (mining/node incentives) could unravel.

**Key Question**: *Can Bitcoin’s SoV narrative survive long-term without a thriving MoE layer?*

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#### **B. Custodial Centralization and Network Atrophy**

**Post’s Claim**: If 99.8% of Bitcoin is custodied passively, the network loses purpose.

**Critical Analysis**:

- **Mining Incentives**: Block rewards (newly minted BTC) currently subsidize miners. By 2140, fees must replace this revenue. If transactions dry up, miners exit, weakening security.

- **Node Decentralization**: If running nodes becomes “pointless” (no transactions to validate), Bitcoin’s censorship resistance degrades.

- **Custodial Lockup**: ETFs and exchanges *do* centralize Bitcoin’s liquidity, but they also onboard institutional capital. This creates a tension: custodians boost price (SoV) but undermine network health (MoE).

**Key Insight**: *Bitcoin’s security model assumes a fee market driven by MoE demand. Without it, the system risks a death spiral.*

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#### **C. The Gold Comparison: Missing Nuance**

**Post’s Claim**: Gold’s physical scarcity and industrial use make it a better SoV than Bitcoin.

**Counterpoints**:

- **Gold’s MoE Failure**: Gold failed as money not due to lack of utility, but because of *practical limitations* (portability, divisibility). Bitcoin solves these.

- **Bitcoin’s Digital Scarcity**: Bitcoin’s immutability and auditability make it a *superior* form of scarcity. Gold’s supply is technically infinite (asteroid mining, alchemy).

- **Network Effects**: Gold’s value is static; Bitcoin’s grows with adoption (Metcalfe’s Law).

**Key Question**: *Is Bitcoin’s digital scarcity sufficient to offset its lack of “real-world” utility?*

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### **3. First-Principles Flaws in the Argument**

#### **A. Misunderstanding Monetary Evolution**

Money often evolves in stages:

1. **Collectible** (SoV) → 2. **Store of Value** → 3. **Medium of Exchange**.

Bitcoin is likely following this path (e.g., digital gold → transactional layer via Lightning). Dismissing SoV as a “sub-par” phase ignores historical precedent.

#### **B. Ignoring Layer-2 Solutions**

The post conflates Bitcoin’s base layer (SoV-optimized) with its MoE potential. Lightning Network and Fedimint are explicitly designed to decouple SoV and MoE functions, enabling both.

#### **C. Overestimating Custodial Permanence**

Custodians (e.g., ETFs) are a *bridge*, not an endpoint. As Bitcoin matures, tools like self-custody wallets and regulatory clarity could shift behavior.

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### **4. A Better Framework: Bitcoin’s Dual-Layer Future**

To reconcile SoV and MoE, Bitcoin could evolve into a layered system:

- **Layer 1 (SoV)**: Base settlement layer for large, infrequent transactions (e.g., savings, institutional reserves).

- **Layer 2 (MoE)**: Lightning, Fedimint, or sidechains for daily transactions, privacy, and microtransactions.

**Benefits**:

- Separates security (Layer 1) from utility (Layer 2).

- Aligns incentives: Layer 1 fees fund security; Layer 2 fees drive adoption.

---

### **5. Risks Unaddressed by the Post**

- **Volatility Trap**: If Bitcoin’s price stabilizes *too early*, it loses speculative appeal before MoE adoption matures.

- **Regulatory Sabotage**: Governments could cripple MoE use via transaction taxes or KYC mandates, forcing Bitcoin into custodial silos.

- **Cultural Inertia**: The “HODL” mentality may become too entrenched to reverse.

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### **6. Conclusion: A Path Forward**

The post’s warnings are valid but incomplete. Bitcoin’s survival depends on:

1. **Balancing SoV and MoE**: Layer 1 for savings, Layer 2 for spending.

2. **Resisting Custodial Capture**: Prioritizing self-custody tools and privacy-preserving transactions.

3. **Incentivizing Network Health**: Ensuring fees (MoE) eventually replace block rewards (SoV).

**Final Verdict**: Bitcoin’s future isn’t *either* SoV *or* MoE—it’s both, operating in symbiotic layers. The greatest threat isn’t custodial stagnation; it’s failing to build the infrastructure and culture to support this duality.