Fiat money is just an exploit:
It's arbitrage between the security & immutability of physical gold, & the insecurity and reversibility of it's virtual replacements.
#Bitcoin is simply a technological solution to end the massive, destructive, wasteful political industry and rent seeking structure that has been globally constructed around this arbitrage.
Excited about how long it will take to change the current system.
Ironically, I believe that the first to adapt this miracle will be countries from the Global South. Only then the Western world may see the benefits of hard money.
Interesting to think of it in arbitrage terms đź’Żđź’Ż have a nice day Guy!
It's a shared belief system where people have the ability to systemically exploit that belief system. Not good.
I tend to really dislike the “shared belief system” metaphor because it lends itself to a super flawed mental model for almost anyone who doesn’t have a much deeper understanding of money, but I get the point you are trying to make and agree.
They will find ways to exploit it.
Payment = settlement in bitcoin. There is no gap to arbitrage. You are simply projecting a fiat problem that you may mistakenly believe is some fact of life or political inevitability, onto a technology that doesn’t have this issue. It simply *cant* be exploited in that way. If a technology allows exploitation or arbitrage somewhere, then it will be exploited, but in this situation, and in this particular way, #Bitcoin makes this form of manipulation impossible.
(The proof of this is MtGox, FTX, Alameda, and the 100s of other insolvencies in the space, they played the exact same game that our banks and the fiat financial system does *as a rule,* but Bitcoin refuses to play… so they did, very quickly in fact.)
Fiat money looks like a scam to me.
But can you chill my beans when I think that too much bitcoin is in too few hands?
The rules are perfectly fair. It so happens that distribution naturally dreads out instead of consolidates, and has been doing so for its entire existence. But regardless, the only reason it can give any guarantees whatsoever is because it CANT subjectively say “somebody has too much.” That’s exactly what’s wrong with fiat. All one has to do is have enough political power and a half assed excuse and they can steal from whoever they want to get the “correct” distribution of money.
In other words, inherent to the only way to “fix” your concern, is the very thing that makes fiat such a corrupt and destructive mess.
The *only* possible path to sustainable, good money, is a set of rules that are perfectly and universally enforced without *any* subjective judgements or arbitrary allocations.
Except in the case of the US, where its backing value is a gangster military empire protecting an oil monopoly
That’s simply a means to bolster the arbitrage opportunity so it lasts longer. But fundamentally the gap between settlement and payment would still be there & would manifest in any number of variations of this same system. Since it’s fundamentally I backed, there’s all sorts of political means to give it a “subsidy” of value. Oil monopoly, military force, control of the global banking architecture, printing and handing out endless fiat loans, etc
How can bitcoin work if it's deflationary?
A sound money is the only one that even works. Not a single money in history failed because it was too scarce. To the contrary almost every money in human history that failed, failed because of the ease that it’s supply could be inflated.
But for it to be money, it has to be non volatile right? If it's limited supply, wouldn't always continue to rise in value?
All volatility is relative. It’s just a product of liquidity. Therefore anything that becomes the most widely accepted and adopted store of value, will necessarily be the least volatile asset as well. This goes doubly so for something with a perfectly fixed supply.
When people say “god the prices just keep going up all the time” they don’t think “man the dollar is volatile as shit this year,” even though that’s exactly what it means. That’s because the dollar IS the pricing system, thus it appears as if everything *except* the dollar is moving in price a lot, when really it isn’t.
As far as pricing in general, the point isn’t to have *stable* prices, it’s to have *accurate* prices. For example, if one year there is a huge disaster that suddenly makes food very scarce, we don’t want to arbitrarily force prices to be stable, what we want is the opposite, for the volatility to hit the markets as quickly and throughly as possible, because if the price of food doubles or triples after a huge shortage, it will cause an *enormous* amount of economic activity to shift toward food production. Hell doctors and lawyers might actually pause their practice to grow food in the backyard if the price is right. And that’s exactly what we want, a literally explosion in food supply so we can feed everyone. Stability for the sake of stability is economic suicide. It’s a rejection of the entire role that the pricing system plays, and causes economic imbalance, stagnation in genuine productivity and value, and wastes resources where they aren’t needed.
So to break it down:
• A fixed supply money would go up in value constantly if the economy was becoming more valuable
• A fixed supply money would *accurately* reflect changes in economic conditions, which is what is necessary to *respond* to those changing conditions.
• Volatility is relative. The most liquid and most valuable good (money), will always necessarily be the least volatile. Because it’s the thing we use to measure volatility to begin with. A fixed money supply would do this better and more accurately than anything else.
How is your money rising in value a bad thing?
Fiat money is so yesterday.
