BodhiSATtva on Nostr: To me, as someone who studies AI, monetary systems, and #Bitcoin, it seems quite ...
To me, as someone who studies AI, monetary systems, and #Bitcoin, it seems quite obvious where things will go.
Already, most value is digital. 97% of dollars only exist as entries in a bank ledger. Banks can expand and contract those ledgers at will creating money on the spot by pressing a button.
Bitcoin doesn't allow for that. Bitcoin is constrained by algorithms and a specific rule set that cannot be changed without consensus from the users, which is almost impossible.
Value has gone digital, and that's a problem. For now.
The natural state of the economy in a free market would be deflation. As technology gets better and increases productivity, more productivity can be achieved with less work. The end state should be that prices fall. That's a logical conclusion that we can derive by thinking about it objectively.
Now, if you price things in USD, prices continue to rise in an inflationary monetary system because new units are constantly being created. Every time the government deficit spends, every time a loan is issued from a bank, and every time the Fed bails out some business that went under, we pay for it in inflation.
Bank loans directly create new money, they don't actually "loan" anything... Wealth is delegated by centralized entities to those who are willing to take risk. In this respect, Banks and governments are king makers that delegate value to individuals that are willing to take risk. This enriches a few at the cost of literally everybody else.
Those who take the risk and get the newly created currency (debt) benefit because they can go out and use that currency to buy real goods and services, and it follows that those who do not take risk and do not go into debt are then diluted by those new units of currency.
Most good honest people try to avoid going into debt, so they are inevitably being pushed into the margins because as new money is created at higher and higher orders of magnitude (think trillions), their purchasing power is eroded at an accelerating pace. In a debt-based system, you have the law of diminishing returns, and for every dollar that's printed into existence you get less economic "productivity". What this means is that overtime more debt has to be issued to achieve the same result. In perpetuity, forever, into Infinity. So for everyone saving in this system, prices go up forever. That is just the natural state of debt-based inflationary currency. It has only been like this for a very short period of History. This was impossible with gold being used as the currency.
Bitcoin is different. It is its own contained system. The unit of account is the Satoshi and there will only ever be 2.1 quadrillion units, forever. Bitcoin does not have any credit or debt on-chain. In the Bitcoin system, either you control the private keys to an address in the ledger, which gives you the right to move those satoshis, or you don't. If you don't store your private key securely, and someone else gets a hold of it, then they can move that value.
As we continue to move forward in the economy, these infinitely expanding fiat currencies can all enter the Bitcoin ecosystem. In order to acquire Bitcoin, you must sell another currency for Bitcoin. So every time someone trades dollars for Bitcoin, that weakens the equity in the dollar system and strengthens the equity in the Bitcoin system.
Everyone who already holds Bitcoin gets richer anytime someone else joins the network.
Since the current system is built on debt and leverage, it inherently becomes less stable as more value gets sucked into Bitcoin.
The fate of any debt-based fiat currency is to continue to inflate until the currency is worthless. Every single Fiat currency in the history of currencies has done this, except for the few that are currently in the process of doing so. This is the natural state of inflationary debt-based currency.
Now that a secure alternative exists, all of the currencies of nation states will be threatened. The incoming administration understands this, that is why they are going to push through a Strategic Bitcoin Reserve. When they do this, all other sovereign nations will be forced to do the same because of the game theoretic interactions of global currencies. The dollar is the linchpin of the global financial currency scheme, and most foreign currencies are backed with US debt in the form of Treasury securities.
As nation states start to acquire Bitcoin, their national currencies will become less and less stable, And will accelerate in the loss of purchasing power (because math is real and fiat currency isn't).
There are a lot of large actors in the Bitcoin ecosystem now that are pushing the idea that Bitcoin is only an asset. That is not true. Bitcoin is a currency, it directly competes with the dollar, and it can be used in a peer-to-peer manner that completely disintermediates the banks. It also removes the ability to censor and surveil transactions if you know what you're doing.
So, naturally, institutions like BlackRock that thrive on Fiat privilege are very threatened by this, because their entire business model relies on you custodying your assets with them, and them charging a fee to manage those assets. They also gain incredibly asymmetrical advantages by custodying your assets, such as exercising the voting rights for the shares of companies that you hold with them.
The clear path of those who wish to remain in power because they have power over currency would be to corral Bitcoin as an asset, and try to centralize it in the hands of custodying institutions. This way, they do not lose control over currency. The easiest way to do this is to institute a digital ID that is tied to your social security number, that you must use to verify your identity. Once that is in place, they can and will begin to roll out Central Bank digital currencies. Tyrants across the world are openly developing Central Bank digital currencies and have intentions to deploy them.
Europe will likely see a digital Euro by 2030. There are already large steps being taken to try to institute Capital controls and keep people from being able to store value in Bitcoin without providing all of their information and telling institutions where they custody that Bitcoin.
As we move into the future, do not let the fearmongers tell you that Bitcoin is only an asset. By centralizing large amounts of Bitcoin into ETFs, we can potentially see a world in which institutions like BlackRock and the United States try to fork the Bitcoin blockchain.
In the case of a fork, anyone who holds their own private keys gets the same amount of Bitcoin on both forks of the chain. In the past, when we saw a hard fork of Bitcoin during the blocksize wars, users wanted to preserve the decentralized nature of Bitcoin, so users sold the fork that is now known as "Bitcoin cash" into the open market. Since everyone sold that version of the chain, its market value collapsed. This is the power of free markets.
If you custody Bitcoin on an exchange or with someone else in an ETF product, you don't actually hold the private keys. You literally do not own that Bitcoin. So if a fork happens, you may find that what you thought was Bitcoin in an ETF product is now BlackRock coin. And though it may retain some value, the users who so adamantly insist on Bitcoin remaining decentralized and used as a peer-to-peer currency will likely sell it into Oblivion. 93% of the Bitcoin supply has already been mined and a vast majority of it is in the hands of individuals.
If people wait until capital controls are in place and non-kyc sources of acquiring Bitcoin are attacked by the state, they will not be able to access Bitcoin unless they know someone personally who owns it... Order they will have to go through the "approved" channels to acquire Bitcoin which will likely not involve self-custody.
In that case, people will have to provide something of sufficient value to convince some Bitcoiner to part with their Bitcoin If they don't want to use kyc/surveilled Bitcoin.
As nation states realize the blunder of waiting so long to act seriously about Bitcoin, they will be forced to acquire it. That means that the price of Bitcoin will rise drastically because there is not anywhere near enough liquid supply to allow large pools of capital to enter without moving the price dramatically.
Because Bitcoin forces a free market for money on the entire world in a decentralized and peer-to-peer way, anyone who holds it will find themselves in a deflationary monetary system where prices consistently fall. In Bitcoin, all prices will fall to the marginal cost of production... And they have been doing so for 16 years. In the last year alone, the dollar has collapsed 56% against Bitcoin.
There is no one to issue credit to large multinational corporations so that they can maintain their monopolies and remain solvent even though they are in huge piles of debt and don't turn large profits.
The current business model of using debt and leverage to corner markets and establish monopolies will be directly threatened by Bitcoin. Any companies who hold Bitcoin will majorly out-compete any who don't, because Bitcoin's value when measured in Fiat terms will go up forever. When you have Infinity dollars being the measuring stick for finite money, the relative "price" will always go up as the money supply of Fiat expands. That is math.
In a world where AI continues to automate many things and disintermediate many jobs, and robotics provide labor without having to pay wages, all of the productivity gains of society will accelerate in an exponential manner. If governments and banks can continue to print Fiat units, they can siphon all of that value into wherever they want it to go by creating new units of currency ad infinitum, And those who continue to hold that inflationary currency will pay for it in inflation. Because that's how it's designed. These Fiat currencies were designed so that nation states could fund and fight endless wars without actually having to have the capital.
Bitcoin not only destroys the business model of fractionally reserved Banks and nation states that operate on perpetual debt, it forces them to acquire it if they wish to remain solvent, and will greatly enrich anyone who holds Bitcoin before they are forced to buy it.
Thanks for coming to my TED talk.
Already, most value is digital. 97% of dollars only exist as entries in a bank ledger. Banks can expand and contract those ledgers at will creating money on the spot by pressing a button.
Bitcoin doesn't allow for that. Bitcoin is constrained by algorithms and a specific rule set that cannot be changed without consensus from the users, which is almost impossible.
Value has gone digital, and that's a problem. For now.
The natural state of the economy in a free market would be deflation. As technology gets better and increases productivity, more productivity can be achieved with less work. The end state should be that prices fall. That's a logical conclusion that we can derive by thinking about it objectively.
Now, if you price things in USD, prices continue to rise in an inflationary monetary system because new units are constantly being created. Every time the government deficit spends, every time a loan is issued from a bank, and every time the Fed bails out some business that went under, we pay for it in inflation.
Bank loans directly create new money, they don't actually "loan" anything... Wealth is delegated by centralized entities to those who are willing to take risk. In this respect, Banks and governments are king makers that delegate value to individuals that are willing to take risk. This enriches a few at the cost of literally everybody else.
Those who take the risk and get the newly created currency (debt) benefit because they can go out and use that currency to buy real goods and services, and it follows that those who do not take risk and do not go into debt are then diluted by those new units of currency.
Most good honest people try to avoid going into debt, so they are inevitably being pushed into the margins because as new money is created at higher and higher orders of magnitude (think trillions), their purchasing power is eroded at an accelerating pace. In a debt-based system, you have the law of diminishing returns, and for every dollar that's printed into existence you get less economic "productivity". What this means is that overtime more debt has to be issued to achieve the same result. In perpetuity, forever, into Infinity. So for everyone saving in this system, prices go up forever. That is just the natural state of debt-based inflationary currency. It has only been like this for a very short period of History. This was impossible with gold being used as the currency.
Bitcoin is different. It is its own contained system. The unit of account is the Satoshi and there will only ever be 2.1 quadrillion units, forever. Bitcoin does not have any credit or debt on-chain. In the Bitcoin system, either you control the private keys to an address in the ledger, which gives you the right to move those satoshis, or you don't. If you don't store your private key securely, and someone else gets a hold of it, then they can move that value.
As we continue to move forward in the economy, these infinitely expanding fiat currencies can all enter the Bitcoin ecosystem. In order to acquire Bitcoin, you must sell another currency for Bitcoin. So every time someone trades dollars for Bitcoin, that weakens the equity in the dollar system and strengthens the equity in the Bitcoin system.
Everyone who already holds Bitcoin gets richer anytime someone else joins the network.
Since the current system is built on debt and leverage, it inherently becomes less stable as more value gets sucked into Bitcoin.
The fate of any debt-based fiat currency is to continue to inflate until the currency is worthless. Every single Fiat currency in the history of currencies has done this, except for the few that are currently in the process of doing so. This is the natural state of inflationary debt-based currency.
Now that a secure alternative exists, all of the currencies of nation states will be threatened. The incoming administration understands this, that is why they are going to push through a Strategic Bitcoin Reserve. When they do this, all other sovereign nations will be forced to do the same because of the game theoretic interactions of global currencies. The dollar is the linchpin of the global financial currency scheme, and most foreign currencies are backed with US debt in the form of Treasury securities.
As nation states start to acquire Bitcoin, their national currencies will become less and less stable, And will accelerate in the loss of purchasing power (because math is real and fiat currency isn't).
There are a lot of large actors in the Bitcoin ecosystem now that are pushing the idea that Bitcoin is only an asset. That is not true. Bitcoin is a currency, it directly competes with the dollar, and it can be used in a peer-to-peer manner that completely disintermediates the banks. It also removes the ability to censor and surveil transactions if you know what you're doing.
So, naturally, institutions like BlackRock that thrive on Fiat privilege are very threatened by this, because their entire business model relies on you custodying your assets with them, and them charging a fee to manage those assets. They also gain incredibly asymmetrical advantages by custodying your assets, such as exercising the voting rights for the shares of companies that you hold with them.
The clear path of those who wish to remain in power because they have power over currency would be to corral Bitcoin as an asset, and try to centralize it in the hands of custodying institutions. This way, they do not lose control over currency. The easiest way to do this is to institute a digital ID that is tied to your social security number, that you must use to verify your identity. Once that is in place, they can and will begin to roll out Central Bank digital currencies. Tyrants across the world are openly developing Central Bank digital currencies and have intentions to deploy them.
Europe will likely see a digital Euro by 2030. There are already large steps being taken to try to institute Capital controls and keep people from being able to store value in Bitcoin without providing all of their information and telling institutions where they custody that Bitcoin.
As we move into the future, do not let the fearmongers tell you that Bitcoin is only an asset. By centralizing large amounts of Bitcoin into ETFs, we can potentially see a world in which institutions like BlackRock and the United States try to fork the Bitcoin blockchain.
In the case of a fork, anyone who holds their own private keys gets the same amount of Bitcoin on both forks of the chain. In the past, when we saw a hard fork of Bitcoin during the blocksize wars, users wanted to preserve the decentralized nature of Bitcoin, so users sold the fork that is now known as "Bitcoin cash" into the open market. Since everyone sold that version of the chain, its market value collapsed. This is the power of free markets.
If you custody Bitcoin on an exchange or with someone else in an ETF product, you don't actually hold the private keys. You literally do not own that Bitcoin. So if a fork happens, you may find that what you thought was Bitcoin in an ETF product is now BlackRock coin. And though it may retain some value, the users who so adamantly insist on Bitcoin remaining decentralized and used as a peer-to-peer currency will likely sell it into Oblivion. 93% of the Bitcoin supply has already been mined and a vast majority of it is in the hands of individuals.
If people wait until capital controls are in place and non-kyc sources of acquiring Bitcoin are attacked by the state, they will not be able to access Bitcoin unless they know someone personally who owns it... Order they will have to go through the "approved" channels to acquire Bitcoin which will likely not involve self-custody.
In that case, people will have to provide something of sufficient value to convince some Bitcoiner to part with their Bitcoin If they don't want to use kyc/surveilled Bitcoin.
As nation states realize the blunder of waiting so long to act seriously about Bitcoin, they will be forced to acquire it. That means that the price of Bitcoin will rise drastically because there is not anywhere near enough liquid supply to allow large pools of capital to enter without moving the price dramatically.
Because Bitcoin forces a free market for money on the entire world in a decentralized and peer-to-peer way, anyone who holds it will find themselves in a deflationary monetary system where prices consistently fall. In Bitcoin, all prices will fall to the marginal cost of production... And they have been doing so for 16 years. In the last year alone, the dollar has collapsed 56% against Bitcoin.
There is no one to issue credit to large multinational corporations so that they can maintain their monopolies and remain solvent even though they are in huge piles of debt and don't turn large profits.
The current business model of using debt and leverage to corner markets and establish monopolies will be directly threatened by Bitcoin. Any companies who hold Bitcoin will majorly out-compete any who don't, because Bitcoin's value when measured in Fiat terms will go up forever. When you have Infinity dollars being the measuring stick for finite money, the relative "price" will always go up as the money supply of Fiat expands. That is math.
In a world where AI continues to automate many things and disintermediate many jobs, and robotics provide labor without having to pay wages, all of the productivity gains of society will accelerate in an exponential manner. If governments and banks can continue to print Fiat units, they can siphon all of that value into wherever they want it to go by creating new units of currency ad infinitum, And those who continue to hold that inflationary currency will pay for it in inflation. Because that's how it's designed. These Fiat currencies were designed so that nation states could fund and fight endless wars without actually having to have the capital.
Bitcoin not only destroys the business model of fractionally reserved Banks and nation states that operate on perpetual debt, it forces them to acquire it if they wish to remain solvent, and will greatly enrich anyone who holds Bitcoin before they are forced to buy it.
Thanks for coming to my TED talk.