Sound Money on Nostr: On the relative importance of privacy in Bitcoin 👇 Bitcoin is a medium of ...
On the relative importance of privacy in Bitcoin 👇
Bitcoin is a medium of exchange. That is, a good that everyone can easily buy on the market and that is used to a greater or lesser extent in indirect exchange. By definition, Bitcoin is not yet money, since its use as a medium of exchange has not become widespread. However, outside of academia or formal scientific debates, there is no problem in referring to Bitcoin as money. Bitcoin is potentially money, and because of its status as a medium of exchange, the laws of indirect exchange and money fully apply to it.
Those of us who use Bitcoin as a medium of exchange tend to think that transaction privacy is an important issue. And, fortunately, we have very privacy-conscious Bitcoiners who work hard on this front to make life easier for all of us. However, the merit of these Bitcoiners and the recognition that their work deserves should not be an obstacle to pointing out where they may be wrong. It happens to all of us at some point that we cannot see the forest for the trees.
In my opinion, these Bitcoiners too often forget that Bitcoin is fundamentally a medium of exchange (MoE). In fact, they often avoid referring to Bitcoin as MoE or as money. And unfortunately, once you get over the fact that Bitcoin is essentially a medium of exchange and that all practical use cases are a consequence of that MoE status, it's easy to lose your way.
By focusing exclusively on privacy, they don't seem to realize that if Bitcoin weren't a medium of exchange, no one would care about Bitcoin's privacy, because no one would use it, not even them. By not being aware of this, they are prone to underestimate or even belittle the work of those developers who seek to make mass adoption of Bitcoin possible.
They also tend to underestimate the importance of Bitcoin's price. Certainly, prices are only historical data, a thing of the past. However, they allow us to attribute to Bitcoin a certain purchasing power (both in the present and prospectively). And there is nothing more important in a medium of exchange than its purchasing power. In fact, no one uses a good as a medium of exchange without assuming a certain purchasing power. In this sense, it should be clear that the process of using a good as a MoE is successful thanks to the historical exchange prices that continually occur in the markets.
When someone considers the future of Bitcoin in the short and medium term, their expectations may be favorable or unfavorable, depending on their point of view and their analysis. But these expectations can hardly be stable, since Bitcoin is still going through a discovery process. During this process, adoption may stagnate or steadily decline, which would mean that Bitcoin would be failing. That is, during the discovery process, Bitcoin's success necessarily implies a continuous increase in adoption. And for this, tools that facilitate mass adoption are necessary.
Adoption is essential in order to maintain or increase the purchasing power of Bitcoin (a fundamental aspect of a medium of exchange). If purchasing power were to decline on a sustained basis, Bitcoin would not be adopted as a medium of exchange. And of course, in such a case Bitcoin would not be used as a store of value either. Since Bitcoin's store of value is nothing other than the reserve of its purchasing power for the future. That is, Bitcoin's store of value implies its status as a MoE.
In conclusion, Bitcoin's privacy is very important, but so are its adoption as a MoE, its purchasing power and its price, since without them privacy would not be necessary. Therefore, both tools that facilitate privacy and those that promote adoption must grow simultaneously.
Publicado aquà en español
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