zimfox on Nostr: Yield on Bitcoin ? When saifedean & saylor discussed this they perhaps overlooked a ...
Yield on Bitcoin ?
When saifedean (npub1gdu…6nak) & saylor (npub15dq…lm5m) discussed this they perhaps overlooked a long-term consideration, that Jeff Booth (npub1s05…eyhe) might have noted.
If #BTC is ∞/21M, the numerator ∞ grows with innovation.
However the incremental value from any innovation is not initially evenly distributed.
Essentially there is a 'Cantillion'-like effect where those nearest to the innovation beneit from the efficiencies or value-add generated.
Over time the technology is adopted by a competitive market, so that eventually each hodler of BTC gains a purchasing power advantage.
Howver during adoption, some hodlers see incremental purchasing power before others, so while 1BTC = 1BTC remains true some can buy more with their BTC (temporarily) due to the innovation.
As many innovations are simultaneous there will be those that can spot good technologies early (or are innovators themselves) and they can acquire trade-able wealth by spending bitcoin.
This allows them to 'spend' bitcoin more effectively than others so they can take a 'commission' in an agency manner, by acting as an intermediary.
The yield they thus generate (whether as participating in cheaper goods or in the form of BTC commission is for providing a service.
This process need not involve debt - however as with any transaction it is not trustless (buying a service is never trustless).
It can thus generate yield. Yield participation might be as a co-venturer (explicit risk in equity but no interest obligation), or it might be on an interest bearing basis (minimal risk).
The key point is that all purchases involve risk (pay up front hoping for execution but funding the exercise) or (pay subsequent to supply where the supplier carries the risk).
The risk reward may be tiny (or even secured by smart contracts if exercised in the digital realm) however, the existence of risk is required to transact so executors of risky transactions will require reward.
By this means a yield for innovation or for participation in trade as an agent is coupled to the time value of the articles acquired - which can ever be zero.
Thus the argument yield vs equity is moot - they are two ways of securing the deflationary economy that Jeff proposes and we expect.
The choice of which path to take is (absent regulation) one of preference. Do you carry risk or pay yield for the avoidance of risk.
In a world with risk-premium (ie any world with finite resources) transactions are the necessary means for decentralisation of innovation and levelling of purchasing power - they are implicit in any traded economy.
But the choice of which to use is open - so both Saifedean and Saylor can be correct, and neither can enforce a view on the other.
Side point - both forms of trade require the rule of property law whether encoded in software, by civic bodies or by threat.
When saifedean (npub1gdu…6nak) & saylor (npub15dq…lm5m) discussed this they perhaps overlooked a long-term consideration, that Jeff Booth (npub1s05…eyhe) might have noted.
If #BTC is ∞/21M, the numerator ∞ grows with innovation.
However the incremental value from any innovation is not initially evenly distributed.
Essentially there is a 'Cantillion'-like effect where those nearest to the innovation beneit from the efficiencies or value-add generated.
Over time the technology is adopted by a competitive market, so that eventually each hodler of BTC gains a purchasing power advantage.
Howver during adoption, some hodlers see incremental purchasing power before others, so while 1BTC = 1BTC remains true some can buy more with their BTC (temporarily) due to the innovation.
As many innovations are simultaneous there will be those that can spot good technologies early (or are innovators themselves) and they can acquire trade-able wealth by spending bitcoin.
This allows them to 'spend' bitcoin more effectively than others so they can take a 'commission' in an agency manner, by acting as an intermediary.
The yield they thus generate (whether as participating in cheaper goods or in the form of BTC commission is for providing a service.
This process need not involve debt - however as with any transaction it is not trustless (buying a service is never trustless).
It can thus generate yield. Yield participation might be as a co-venturer (explicit risk in equity but no interest obligation), or it might be on an interest bearing basis (minimal risk).
The key point is that all purchases involve risk (pay up front hoping for execution but funding the exercise) or (pay subsequent to supply where the supplier carries the risk).
The risk reward may be tiny (or even secured by smart contracts if exercised in the digital realm) however, the existence of risk is required to transact so executors of risky transactions will require reward.
By this means a yield for innovation or for participation in trade as an agent is coupled to the time value of the articles acquired - which can ever be zero.
Thus the argument yield vs equity is moot - they are two ways of securing the deflationary economy that Jeff proposes and we expect.
The choice of which path to take is (absent regulation) one of preference. Do you carry risk or pay yield for the avoidance of risk.
In a world with risk-premium (ie any world with finite resources) transactions are the necessary means for decentralisation of innovation and levelling of purchasing power - they are implicit in any traded economy.
But the choice of which to use is open - so both Saifedean and Saylor can be correct, and neither can enforce a view on the other.
Side point - both forms of trade require the rule of property law whether encoded in software, by civic bodies or by threat.