SnipingSpider on Nostr: The Future Under a Bitcoin Standard Hello Nostr, I want to share my thoughts on how a ...

The Future Under a Bitcoin Standard

Hello Nostr,

I want to share my thoughts on how a Bitcoin standard could shape the future. I’ve been thinking a lot about how Bitcoin, with its fixed supply of 21 million, could influence the global economy and bring real positive changes. A deflationary system, where things become cheaper over time, would encourage saving, force businesses to focus on long-term value, and lead to innovation in important areas like healthcare, technology, aviation, mobility, and finance. However, I also recognize there are challenges that come with such a system. Let me take you through a balanced look at the potential pros and cons of a Bitcoin standard.


1. Efficiency and Automation

Pro:
In a deflationary economy, where things become cheaper over time, businesses would need to become more efficient to stay competitive. History has shown this before. For instance, during the Industrial Revolution, businesses developed innovations like the steam engine and assembly line to improve productivity and reduce costs.
Under a Bitcoin standard, businesses would likely invest heavily in automation and AI to get more done with fewer resources, which could especially benefit industries like healthcare, where efficiency is crucial to reducing costs and improving care.

Con:
Deflation can also lead to a deflationary spiral, where people delay spending in anticipation of even lower prices, which decreases demand. If businesses face falling revenues due to this lack of consumer demand, they may have to cut costs further, potentially leading to layoffs and reduced economic activity. So, while efficiency would increase, there’s a risk of lower spending harming growth.


2. Long-Term Value Creation

Pro:
One of the biggest advantages of a deflationary system is that it encourages saving. As money increases in value, businesses and individuals are incentivized to delay consumption and invest in long-term projects. For example, during historical deflationary periods, such as the Great Depression, governments and businesses focused on infrastructure and long-term growth initiatives.
In a Bitcoin-based economy, businesses would likely focus on long-term investments in areas like quantum computing, renewable energy, and AI, which require substantial upfront investment but offer significant long-term benefits.

Con:
That said, the downside of focusing too much on long-term value is that short-term demand might suffer. Deflation can result in a slowdown of consumption, as people prefer to save rather than spend. This reduction in consumer demand can hurt businesses, slow down the economy, and even cause recessions, as seen during the Long Depression. While investments in technology may increase, it’s important to recognize that an overly deflationary environment could reduce immediate spending and economic activity.


3. Decentralized Innovation

Pro:
Bitcoin itself is decentralized, and adopting a Bitcoin standard could spur the growth of more decentralized technologies. We’re already seeing this with the rise of Bitcoin, DeFi (decentralized finance), and other peer-to-peer networks. Similar innovations arose during the post-World War II era, when decentralized industries and local economies flourished. Decentralized systems can make industries like healthcare more secure and efficient by using technologies like blockchain to protect sensitive data.

Con:
Without a central bank or government controlling the money supply, there may be less flexibility to manage economic shocks, and decentralized systems could struggle to coordinate responses during economic downturns.


4. Sustainability and Resource Efficiency

Pro:
Deflation naturally pushes businesses to innovate and use resources more efficiently. Historical examples, such as World War II, demonstrate how resource scarcity can drive significant technological advancements, such as the development of aircraft technology and more efficient manufacturing processes.
A Bitcoin standard could promote sustainability, with businesses focusing on renewable energy and low-waste production methods, creating more environmentally friendly systems.

Con:
On the other hand, deflation can also make it harder for businesses to invest in new technologies due to reduced revenues. Lower consumer spending could lead to fewer profits, which in turn may make it difficult for companies to fund sustainability projects. There’s a real possibility that businesses might focus too much on cutting costs in the short term, leading to underinvestment in long-term sustainable solutions.


5. Financial Innovation

Pro:
Bitcoin has already sparked significant innovation in the financial world, particularly with Bitcoin and DeFi. These decentralized platforms allow for peer-to-peer lending, secure transactions, and other financial activities without traditional intermediaries, creating a more inclusive and transparent system. As Bitcoin becomes the dominant currency, we could see more advanced financial tools that offer security, efficiency, and access to underserved populations.

Con:
However, deflation can make borrowing and debt management more challenging, as the real value of debts increases over time. This has been a major issue historically during deflationary periods like the Great Depression, when many borrowers struggled to repay their loans as money became more valuable. In a Bitcoin economy, financial innovation could thrive, but widespread defaults on existing debts could be a serious problem, especially for those reliant on credit.


6. Less Debt, More Real Value

Pro:
In a deflationary system, the focus shifts away from borrowing and toward creating real value. Under a Bitcoin standard, businesses would rely less on cheap credit and more on sustainable growth strategies. This has been seen in past deflationary periods, such as during the Long Depression, where companies had to find new ways to generate real, sustainable value.
This shift could benefit sectors like healthcare, where efficiency and innovation are necessary for providing better services without relying on massive amounts of debt.

Con:
But this comes with the risk of debt defaults. As deflation increases the value of money, it also increases the real cost of repaying debts. Historically, deflation has led to waves of bankruptcies and financial crises, as seen in the Great Depression, where the burden of repaying loans became overwhelming for businesses and individuals. While the emphasis on real value is positive, the transition to a deflationary economy could cause significant disruption to debt-reliant sectors.


7. Making War Less Lucrative

Pro:
A Bitcoin-based economy could make war less profitable. Since Bitcoin’s value would constantly rise, the costs of waging war would be enormous, and any failed attack would likely leave the enemy wealthier. Historically, during deflationary periods, the high cost of conflict discouraged countries from engaging in war, as seen in post-World War I Europe, where deflation made it harder to justify large-scale military actions.

Con:
However, history also shows that military spending can be used as a tool to stimulate economies during deflationary periods. For example, during the Great Depression, countries like Germany and Japan ramped up military spending to reduce unemployment and increase demand. While Bitcoin might make war expensive, governments might still turn to military spending to boost their economies in times of deflation.


Energy and Labor Value in Fiat vs. Bitcoin Systems

Pro:
In a fiat system, the money you earn represents the energy and time you’ve invested. However, inflation constantly erodes the value of that stored labor. Under a Bitcoin standard, this changes. Bitcoin’s fixed supply means that your labor and energy are preserved over time, without the risk of inflation diminishing their value. This makes Bitcoin a more stable and reliable "energy-storage" system than fiat currencies, which are subject to inflationary pressures.

Con:
While Bitcoin preserves the value of your labor, the risk is that a deflationary system could widen wealth inequality. Wealthier individuals, who hold more assets, would benefit the most from Bitcoin’s rising value, while those with debt would suffer from the increasing burden of repayment. In a Bitcoin economy, this could lead to greater economic divides between those who hold Bitcoin and those who rely on credit.



Conclusion

"No matter the political orientation, political decisions often benefit only certain parts of society while others are disadvantaged. Even if an investment was well-thought-out and pursued the right goals, it may not bring the desired success. Through new elections or the influence of other lobbies, such projects often lose importance. In the end, costs arise that do not pay off, and particularly disadvantaged groups, such as poorer people who neither have the knowledge nor the capital to invest, end up as losers. I see Bitcoin in a similar way: many are losers because they entered too late or had little capital. But ultimately, both situations result from our current system, in which it is assumed that politics acts in the interest of society."

"In a Bitcoin Standard, many who do not benefit would fall behind due to a lack of knowledge or capital—similar to our current system. This is reminiscent of the Babylon Complex: the attempt to create a perfect order while simultaneously leaving parts of society behind. If the financial average rises, a deflationary system could make sense. It could become more efficient if we develop processes that also benefit the poorer segments of society. Because the wealthy would still be willing to bear most of the costs for progress and the highest quality."



To sum it all up, a Bitcoin standard could drive innovation, efficiency, and long-term value creation, fostering a more sustainable and decentralized future. However, it’s important to consider the challenges associated with deflation, such as the potential for economic stagnation, increased debt burdens, and widening inequality. Historical evidence from deflationary periods, such as the Great Depression and the Long Depression, shows that while deflation can spark innovation, it can also cause significant economic disruption.

One common criticism from left-wing or MMT advocates is that a Bitcoin standard is unfair because it benefits early adopters and those with capital, while those who enter later or have fewer resources struggle to catch up. However, this is not the fault of Bitcoin itself. In fact, if the world had started together with a Bitcoin standard, with an equal distribution of Bitcoin among all people from the beginning, everyone would have the same opportunity to benefit. This would make the system inherently fair—more so than the current fiat-based system.

But that’s not how life works, and Bitcoin has already become essential in many places where people struggle daily with inflation and political instability. For example, in Africa, where inflation is rampant and local currencies are unstable, people have turned to Bitcoin as a solution. As shown in the documentary The Silent Bitcoin Revolution of Africa by Max DeMarco (npub1lel…kvyz), we see the growing adoption of Bitcoin by individuals looking for alternatives to protect their wealth and improve their lives. This shows that, while the West often views Bitcoin through a speculative lens, people in other parts of the world are using it to fight for basic financial stability.

The rise of decentralized innovations goes beyond just Bitcoin. Technologies like #Nostr and other decentralized communication platforms are already providing people with the tools to reclaim their freedom from centralized control. These systems allow for open, censorship-resistant communication and give individuals more control over their data and information. In a future where decentralization takes center stage, people can rely not only on Bitcoin but also on decentralized technologies like Nostr, DeFi, and distributed networks to make their lives easier and more secure.

The world never stops turning—just like Bitcoin, it’s volatile, with ups and downs. But I believe in humanity’s ability to choose what we need most as a global community, without giving politicians or governments limitless access to money-printing. Bitcoin is already a tool for change, offering real alternatives to people dealing with systemic failures. I’m not against the idea of a functioning state or financial system, but Bitcoin and other decentralized technologies are already serving as means of creating positive change in places that need it most.

The alternative would be to optimize and stick with our current system. I see both approaches as valid, but I’m also optimistic about the potential of a better future with Bitcoin and decentralized innovations leading the way. These technologies offer us the chance to rebuild systems that are fairer, more resilient, and better for everyone, no matter where they live or what resources they have.

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by SnipingSpider (npub1evs…szhp)

Max DeMarco (npub1lel…kvyz) leonwankum (npub1v5k…8rd9)
preston (npub1s5y…6q7z) Derek Ross (npub18am…p424) jack (npub1sg6…f63m) jack (npub1sg6…f63m) Roman Reher (npub1a3x…459q) LynAlden (npub1a2c…w83a)
jack mallers (npub1cn4…3vle)

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