Maybe governments shouldn’t offer so many subsidies? It’s screws up the free market incentive structure and worsens wealth inequality.

GM nostr

The way I see it, the market for government bonds is completely irrational. We have trillions of dollars per year being invested into an institution that hasn’t turned a profit in over 2 decades and has no prospect of making profit ever again. The main holders of government debt are other countries, social security, state governments, pension funds, and public companies. I can only imagine 3 ways that the US manages its massive debt:

1) issue more bonds

This option seems like an outright Ponzi scheme that will inevitably fail. As they operate at a deficit year after year, the government debt will grow exponentially. People eventually realize that their “guaranteed risk-free” return on investment is solely funded by new investors instead of actual profits. As people stop buying bonds, interest rates will rise to try to entice people to join the game and delay the its collapse. The holders of government debt as an asset will lose all that value as the government has no way to repay its debt.

2) print money

This option is where I think we are ultimately heading. It is effectively pushing all of the costs of government inefficiency, waste, and arguably harmful spending onto the holders of the US dollar. Inflating the currency discourages people from holding it, worsening inflation. It also disincentivizes people from buying bonds as they approach negative returns in real terms. The last holders of debt and currency will lose all that it is worth.

3) operate at a surplus

If the government shows some kind of financial responsibility, I still think it is possible to pay off the debt. We would need to cut government spending to only the essentials, but no politician would ever do that.

This is one of my favorite arguments for bitcoin’s inevitable adoption. People will still need money. But I’m also a little worried. Early adopters will be rewarded, but somebody will be left holding the bag. People are relying on social security and pension funds for their retirement. It isn’t going to be pretty when the value of their assets collapses. This is my main fear of hyperbitcoinization.

I don’t have any for al education in economics so please correct anything that is wrong.

#grownostr #bitcoin

How would Bitcoin bonds work? The US is used to taking debt in a money that they can print and devalue over time. The same strategy won’t work for bitcoin.

Also, wouldn’t this be accelerating the replacement of USD for Bitcoin as the reserve asset? I can’t imagine many politicians would want that.

GM nostr

I realized yesterday that bitcoin and nostr are giving me the opportunity to be a part of something truly revolutionary. They have really changed the way I think about the world. We now have uncensorable technologies that secure natural human rights, a reality that seems impossible in the digital age.

My friends and family know that I am into bitcoin and nostr, but they don’t understand why. Being a part of the bitcoin and nostr communities, I feel like I have a responsibility to represent them well. I am motivated to live, act, and speak ethically and confidently. I want to show everyone that bitcoin and nostr are respectable communities for anyone that values human rights, not just for anarchists and illegal activities as many people suspect.

#grownostr #bitcoin

Where? How?

Anyone can use bitcoin without censorship. That’s the whole point.

He’s a really smart guy. I wish he was here on nostr. I’m not on twitter, so thanks for sharing.

I’m a college student in Texas. I got into crypto during the 2021 bull run and got smoked by the bankruptcies. At the bottom of the bear market in 2022, I started learning about what sets Bitcoin apart. Now all my savings are in Bitcoin (cold storage) and I’m running a node. I hope to have a little mining setup soon for learning purposes.

I’m really excited to see the progress that humanity can make when the system treats everyone fairly.

Yeah I also try to stop myself from bringing it up all the time. I can see how it could get annoying. It’s just hard because it’s such a big part of my worldview.

Nostr is great. I’m enjoying it so far. It’s just hard to get anyone to read my posts. Thanks for the follow btw.

I think the biggest bottleneck for bitcoin adoption is education. I’ve tried to convince several people in the past year to learn about it, but they weren’t very interested.

Bitcoin will eventually win because our wealth goes up over time, which allows us to build. Fiat is self-destructive and makes its holders poor.

I never tried it and probably never will. It seems too risky for me. I don’t get stressed when the Bitcoin price goes down. I would get stressed if I was on leverage. I wouldn’t want to be in a position where I could be forced to sell at low prices.

I haven’t read Gradually Then Suddenly, but it’s definitely on my list.

I’m currently reading The Fiat Standard by nostr:npub1gdu7w6l6w65qhrdeaf6eyywepwe7v7ezqtugsrxy7hl7ypjsvxksd76nak and I’m getting a better understanding of just how influential incentives are. Nature’s incentives, expressed through the free market, are perfectly designed to constantly improve quality of life by rewarding people that do good for the world and punishing people that don’t. Fiat incentives kill the free market and nature’s incentives with it by rewarding the politically connected regardless of how productive they are. Bitcoin fixes this because Bitcoin’s incentives are aligned with nature.

It seems unlikely as of right now. I’m just pointing out that it’s a possibility.

I understand that I may not be able to make you and the government may not be able to force you, but the market can effectively force you. If there aren’t enough miners on the chain without a tail emission, it is vulnerable to a 51% attack. If all the miners migrate to the new chain for the slightly higher block reward, it would be more secure. The more secure chain would naturally have more users and a higher value per coin.

Thanks for the video, Matthew.

This might be a hot take, but I wouldn’t be too opposed to a tail emission if that’s what it takes to keep incentivizing miners to secure the network.

I would imagine that plenty of people will want to use the base layer, so there would be enough transaction fees that this wouldn’t be necessary. But if everyone transitions to lightning or bitcoin banks, we might need to stop halving the reward.

A 0.01 BTC block reward would be .0025% increase in the supply every year. Bitcoin would easily maintain its status as the hardest money. It would be a small price to pay in my opinion.

This is a problem that we will face decades from now, and there are good arguments for both sides. Maybe solo miners will be willing to take a loss to secure the network or maybe energy will be so cheap that everyone will be mining bitcoin.

I’m curious what everyone thinks.

New nostr user here. I’m not really into social media, but nostr has a different and healthier vibe. I’m excited to contribute to and engage with this ecosystem of freedom-focused people.

I just have one hesitation before I’m sold on nostr: How are current users supposed to find the posts of new users (me) unless I pay someone running a popular relay to put me on there? In other words, if anyone sees this post, how did you find it?