The Bitcoin Migration
The exodus from from an inherently broken monetary network that can’t be fixed to an inherently strong monetary network that can’t be broken.
Introduction
Understanding bitcoin and its value is a challenging, multidisciplinary, daunting task. Even the most ardent students of bitcoin arrive at a point years later where they know there is still so much more to learn.
This is a brief effort to address the most salient points about what makes bitcoin special; not a shortcut, but a prioritized outline to at least try and bring the reader to a point of wanting to learn more, if not conviction, as many of us have, in the unprecedented singular importance of what bitcoin represents. This is an effort to bring the reader through a handful of stages of logical progression from what is money, to what makes an ideal money, to how bitcoin is this ideal money, to how there isn’t any alternative solution and how there can never be an alternative solution to money.
What is money?
Money is just a ledger of who owns what; a ledger of stored economic energy. There are three roles of money: Store of Value, Medium of Exchange and Unit of Account. Money ultimately has to facilitate investment, consumption and savings. A good money should accomplish all these things. It is a construct arrived at to better facilitate and coordinate human economic interaction for everyone in society. It is a solution organically arrived at to specifically address these problems vs. something that exists for its own sake. Money is the most saleable good in society, a universal language of value that facilitates all economic activity as seamlessly as possible, ideally across both space and time. Money is an idea, a concept; at its core it is pure information, though historically this information has manifested in physical form (e.g. sea shells, beads, precious metals, paper proxies for precious metals, and now nothing more than government-imposed paper) . In this sense, historically, money was bound to nature, which could not easily be cheated. “Modern” fiat money of course has no such binds, which we will get into later.
Money is always a means to an end, never an end in itself. Money is always a shared recognition, never as some have mistakenly suggested a shared belief or shared illusion. Any money used in society is not so much a leap of faith from the user/owner but a calculation not only of what you value as the best money, but more importantly a calculation of what others interpret, recognize and value as the best money. Shared recognition doesn’t change from day to day, though certainly as confidence in a money erodes over time, people can be expected to try and identify and move to a better money, especially if the erosion is noticed as significant and accelerating.
Why is money important?
Money is one half of every trade in the world; It is arguably one half of every product or service. This means it has a big role, big as in >$300 trillion big. Because of its gigantic market size, one might argue that it’s all the more important that such a network work efficiently, effectively, ethically and transparently. People talk about notions of ‘intrinsic value’ or ‘backed by’ but a good money is simply an honest ledger, and the best money just achieves that job better than any competing solution.
There can be multiple monies, and one can even argue everything is a form of money, just that most are bad monies and ultimately most societies gravitate toward a single money, where there is consensus that it is the best money, emergent through shared recognition over time.
Money is a conservative concept by definition - it’s to everyone’s interest that money is stable, reliable, resolute, predictable, ideally even boring; it is not (nor should be) a speculative asset. It can be seen as a “flight to safety” but even more fundamentally it can be better understood as the default home for one’s economic energy (if/when the money is functioning well as a money of course) available for investment or consumption, but only as the need, want or calculation arises. Its default role, as store of value, should be steadfast and uncompromising; from that default role decisions can be made (investment, consumption or continuing to save). Money is not meant to be ‘innovative’, but should become the most predictable thing, like the sun rising in the east. It thereby becomes the most reliable thing, an ideal foundation upon which human economic calculation, endeavor and civilization itself, can unfold and prosper.
A short note on gold
Gold was the best money in human civilization for thousands of years; this significant amount of time brings a measure of credibility and confidence, a “Lindy effect”, an important characteristic of a money. While it had most of the attributes of an ideal money - divisible, recognizable, indestructible, it most importantly was more credibly scarce than any competing money. However, it became centralized out of necessity (held at banks for security and practicality) and instead ‘paper’ gold (an IOU or claim on gold centrally-held) become more widely used because of its versatility, but ultimately that was its undoing. The US government soft-defaulted on the convertibility of USD to gold in 1971 and arguably had done so even earlier, for example in 1934 when the famous 6102 rule made private holdings of gold illegal (preceded by mandatory convertibility at a false exchange rate); such a rule was also easily enforced because of the previously mentioned centralization at 3rd parties and difficulty with which anyone could move their gold abroad. Point is that gold’s shortcomings of impracticality as bearer instrument over distance, centralization, and to a lesser extent its poor divisibility (for MoE) made it fail as a global money standard, though it still plays a large monetary role as a recognized alternative asset, SoV and potential hedge against fiat inflation in the current fiat-dominated world.
Gold’s characteristics of a shiny, famed, expensive metal used in jewelry among other things brings a seductive, alluring, romanticism rooted in age-old history and tradition that keeps gold popular in the minds of sound money adherents, but from a logical deductive perspective it has already proven to have failed as a standard, and the reasons for that failure remain unaddressable in any arguments for reinstating any future gold standard. A related idea to the above is the idea of half/life of money, popularized by Saylor. Gold has a stock-to-flow of ~62, with an associated half life of ~35 years, meaning one can expect the supply of gold to double every ~35 years. While scarce, it’s not absolutely scarce - the asset class ‘leaks’ if you will, albeit slowly (the metaphor of the money ‘leaking’ was suggested by @Saylor in 2020).
Human nature, combined with government expediency and appearance of supposed ‘emergencies’ will continue to manifest ad infinitum, ensuring any general human or government ‘commitment’ to any gold standard can fall apart on a human whim; the future is no different to the past in this respect. Also, if one looks at gold dispassionately in a “jobs-to-be-done” framework, the fixation on some need for a tangible (or a better word would be corporeal) solution to the problem of money is somewhat primitive and antiquated. This is not to say that gold doesn’t have a role to play over the next decade, in that it is an established SoV asset that central banks like Russia, China and India take very seriously and continue to accumulate. Also, the staggering amount of rehypothecation of paper gold in play, and the fact that many claimed physical holdings (e.g. Fort Knox) have never been publicly audited, suggest that if and when there is a run on the paper gold, to switch to physical gold, the physical price can appreciate significantly (point made by Larry Lepard).
A good money; scarcity above all
Throughout the ages we have seen different monies emerge, each of which had many of the qualities that make up a good money noted above but most important of those qualities was scarcity, and the ultimate undoing of such scarcity, through a supply response, was the cause of the demise of all commodity monies like salt, feathers, sea shells and beads.
Precious metals fared far better and managed to uniquely secure the role of money for millennia, primarily because their relative scarcity was credible, and largely remains so. The fiat experiment is a brief one, and as we’ll see later it’s not a good money, again primarily because of the absence of supply constraints making its scarcity the least credible.
An ideal money
Moving from the basic premise of what money is, and what is a good money, it’s worth calling out the key components that could move the status of a money from just good to ideal. Many of these points are intertwined and related, but worth making each point separately. The list is not meant to be overly prescriptive or exhaustive, but captures critical ideas. It’s also worth noting that no money we have ever had meets these criteria (until now?):
No issuer:
This is one of a number of critical benefits of a commodity money as it ensures that there is no nexus of power or control over the money. In particular, it ensures that there is no path to government expediency during so-called ‘emergency’ times. A critical test of a money is not how it generally behaves under normal circumstances but if and how it may be perverted under the most extreme and unprecedented of circumstances that affect state interests. One example is the outbreak of WW1 in 1914, where the affected great powers of Germany, Britain and France promptly went off their gold standard to pay for the war, essentially stealing their citizens’ private property, indirectly, for subsequent years, to have such economic energy wielded toward state/war interests without needing any explicit agreement from the population. Another related example is Nixon’s soft-default in 1971 bringing the USD firmly off the gold standard (despite dishonestly characterizing the move as ‘temporary’), and a final albeit somewhat different example would be Roosevelt forcing convertibility of privately held gold with rule 6102 in 1934 during the depression.
The first two examples were possible because banknotes were ‘paper’ proxies for gold and virtually all physical gold was held in central banks, because it was impractical to use gold as a bearer-instrument in everyday use and especially not in international trade. The last one was possible because gold was centralized by nature and so offered the government an odious path to more direct private property confiscation (or more accurately compelled, diluted redemption). In summary, either gold was mostly ‘paper’ IOUs subject to risk of state reneging on promise of redeemability, or physical but held centrally - not self-custodied, making it vulnerable to seizure.
An ideal money would be one that acts as a bearer instrument in a practical, viable way, where self-custody is possible, if not easy, and thereby avoids any risk of either rehypothecation, lack of redeemability or confiscation, and where there would be no trend toward centralization of custody but instead a trend toward decentralization of custody, to self-custody, making it far more difficult for the state to expropriate and impossible for it relax ‘backed by’ commitments because there would be few, if any, ‘paper’ representations of the money in the long run.
In this regard the ideal money would be a bearer instrument, practical for self-custody but also practical and viable for exchange across distance, for international trade. Such a thing has never existed before in human civilization, until now.
No risk of debasement/seigniorage:
A good money is not just ‘a ledger’ but an honest ledger, unimpeachable by anyone, immutable and unchanging, beyond the purview of anyone, including and especially the government. Trust is foundational in any relationship, no more so than money, which represents the sum total of all of our stored economic lifeforce in this world. Seigniorage is an extraordinary privilege the state takes because it can essentially pay for things by printing money that it otherwise could not afford; in doing so, the state essentially steals from the existing holders of the money; the people it supposedly represents.
We have now reached a stage with this ‘modern’ fiat money that the very concept of saving (one of the foundational key roles of money) no longer even exists because any real interest rate yield is less than the rate of inflation. This debacle means that people are forced to either consume or invest (the two remaining roles of money) in order to avoid the 100% government-imposed monetary inflation. In this sense the ideal money should not be just information, but accurate, reliable, incorruptible information that never ‘leaks’ - is never stolen from us.
Apart from the theft, it makes real economic calculation impossible, especially far out into the future, because the money-as-information idea is always incorrect, even better described as disinformation. The ideal money should always be structurally correct, beyond the risk dilution by any privileged actor. This is not just correct, but ethical; frankly anyone who argues otherwise reveals a great deal about the kind of person they are.
Another point here is about how the government seemingly bequeaths money on the fiat standard. We’ve seen recent examples of the U.S. Government bequeathing tens of billions of USD to Ukraine. The money is by all accounts conjured out of thin air, which is possible on the fiat standard, then indirectly paid by everyone who is on that same standard, by diluting all their USD holdings and earnings. Imagine if the government no longer had this magic wand; everyone would be immune from this indirect, hidden tax, forever.
Even in the case of gold, by all accounts structurally an ethical commodity money (ignoring any considerations of mining conditions), with no privileged role by anyone, the monetary network expands every year by 2% and supply will respond to any price increase. An ideal money would have zero supply response to any price change, instead having a pre-programmed release schedule that precludes any unplanned or variably money creation; such a money has never existed before in human civilization, until now.
Absolute scarcity:
This is the idea that there should be a fixed supply of money, a closed system. The idea is a simple one, but in practice it has proven to be virtually impossible. While commodity monies throughout history have been the best approach, one can always make more of a commodity; any increase in price creates a supply response. Gold is relatively scarce, but not absolutely so, with inflation in supply at ~2% per year.
Gold has a stock to flow ratio of ~62. An ideal stock-to-flow ratio would be infinity; this would be the case if a money had zero supply response to an increase in its value or price relative to other things, and had an ultimate, terminal fixed supply
Absolute scarcity would be a foundational breakthrough in the concept of money because it would mean that anyone could reliably and predictably occupy a fixed share of the monetary network into perpetuity - a resonant, breathtaking idea that not only captures the imagination, but firmly and obviously addresses the idea of ‘saving’ one’s earned economic energy for the future in a way that was never possible before. In fact one could argue that such a money would be the first money, and all other versions of ‘money’ before this would be better described as fundamentally flawed approximations toward this ideal (*the idea of bitcoin as the ‘first money’ was originally suggested by @Wealth_Theory on Twitter).
While a commodity money is an ideal money, one can make more of any commodity. We now go beyond commodity money to a new concept, an absolute scarce commodity - a scarcity (Credit to @Saylor for this idea). This concept, the first closed system, is now operating in the real world as we speak. Absolute scarcity is a concept with unfathomable benefits and implications that have never been manifested in reality in the history of human civilization, until now.
Digital:
Not everyone thinks an ideal money should be digital. Some have romantic notions of how gold is physical, tangible, or corporeal vs. something digital which seems intangible and perhaps even ephemeral. However, the idea that something physical can be a new global monetary standard in the modern world is stillborn because it cannot offer settlement (a bearer instrument) over distance. Returning to the jobs-to-be-done framework, the need for a viable, practical, bearer instrument (actual money, not credit) for global trade, in real time, necessitates that the money for the modern world must be digital, native to the internet.
While we may think of examples of fiat being digital or electronic, fiat is never a bearer instrument over digital rails (or any rails for that matter). Another conundrum is that the idea of digital conflicts with the primary requirement for scarcity because historically anything digital can be replicated, essentially for free (e.g. digital photos, music..); all information wants to be free. A dream money would be digitally conservative; one that could be teleported anywhere in the world but not copied or ‘double-spent’ to use the technical term. Importantly, though digital, an ideal money should also be tied to the real world through the energy required (a real world cost) in its production. Such a concept has never existed before in the history of human civilization, until now.
Irreversible:
If a transaction can be reversed it means that money is not really changing hands, but rather promises are changing hands, and it’s more akin to credit vs. actual money. Irreversible would bring consequences, making transactions more consequential, eliminating risk of fraud and chargebacks which are prohibitive for many merchant verticals, adding unnecessary, and often unrecognized and unappreciated, costs to the system. Cash (fiat cash) would be a closer example of irreversibility, albeit with something that isn’t even really money, not a bearer instrument, but credit. Final settlement of a digital money over the internet? A game-changer; this concept has never existed before in the history of human civilization, until now.
Neutral/non-sovereign:
Commodity monies like gold are examples of neutral or non-sovereign money and the advantage is that no nation state has any particular privilege over the money - they can’t print it or influence its value in any meaningful way, nor can then coerce or restrict other countries in its use. Fiat money significantly fails here because they are all ultimately subject to state control, never mind influence. The U.S. freezing ~$300 billion of Russia’s deposits in Germany in 2022 was a recent example of how fiat money can be weaponized by its government (one’s opinion on the merit of such an action is not the point; the point is that it was not only possible but that it happened). An ideal money should have no such risk to any holder; in fact an ideal money should be recognized and valued by your enemies; otherwise it’s better described as a contrived nation-state plaything.
Variations on this concept would be that an ideal money should be apolitical, impossible to weaponize, universal and global. This universal language of value means everyone can communicate economically, with everyone else, everywhere in the world, on equal terms, with no more pointlessly expensive friction of foreign exchange ‘translation’, not to mention risk of seizure.
Gold was and is neutral and non-sovereign, though as pointed out earlier it can’t with practicality be used as a bearer instrument across distance, and all fiat is of course sovereign, by design. In this regard, we have never had a neutral, non-sovereign bearer instrument that could be used across distance in human civilization, until now.
No gatekeepers or intermediaries:
One of the most obvious ethical characteristics of an ideal money is that everyone engages with the monetary network identically, with no one having any privilege, and all interactions peer-to-peer. There is something almost magical about true peer-to-peer transactions becoming the norm - not only does it mean that there is no potential for any intervention, censorship or denial of service, but it also reduces or even eliminates fraud and arbitrary chargebacks. This brings closer, more human relationships between buyer and seller, and associated mutual respect, especially across national borders, in real time, in a way that was never possible before.
A related idea here is decentralization, though I always view that as more of a means to an end vs. an end in itself; the ‘end’ is that all actors on the monetary network engage with it in the same way, with no variation in status, role or privilege, no one with ability to change the rules, and no one in any position to destroy, harm or even influence the network. And the network survives and thrives with no central point of failure.
Also an important byproduct of these ideas is inclusivity. Gatekeepers like banks have government-mandated demands and requirements (e.g. Know-your-customer and anti-money-laundering) - artificial constructs that needlessly limit participation by the lower echelons in society, preventing them from even creating a bank account, placing unnecessary obstacles in front of them from bettering themselves and flourishing. An ideal money would enable frictionless economic participation by the full global population.
Another critical follow-on idea here is open-source. Not only should a money be open to all but the very design and architecture of the money should be fully transparent, again with no permissioned or secret information, access or control bequeathed to anyone. The open-source ethos is a secret weapon of truth and integrity against which enemies only reveal their evil intents. There is nothing about bitcoin that is not open and knowable by all. When a fiat bureaucrat criticizes open-source, they are at the same time showing their hand, underscoring their need for control in general, and silent debasement in particular.
People criticize bitcoin because it is boring, but the ideal money should be the most boring thing in the world. It should be limited and focused on its function, inert, unchanging and reliable; that’s what makes it so useful. The whole point is that people can focus on providing value in the world without ever having to think about how the value they create can be stored and used, with whose permission, for how long. A working, functional, global money for planet Earth should be a given.
Technically, physical gold doesn’t necessitate gatekeepers, though for significant amounts it does for security, and in this regard generally faces the pressure toward centralization of holdings. Fiat, by definition has highly controlled issuance and general access, metered through the official banking system that excludes ~4 billion unbanked and underbanked globally. We have never had a viable money with global reach that connects the modern world in real time, completely independent of any gatekeeper or intermediary, until now.
100% monetary premium:
Monies throughout history have had purposes beyond their monetary properties. For example gold is used in electronics and serves ornamental, decorative and ceremonial functions. While some might point to these additional values or functions as a bonus, they distort the pure monetary value of the money and bring additional, unnecessary variability in its value. Historically, these extra values could have provided some beneficial role by ‘bootstrapping’ the money to begin with, elevating its initial commodity value to monetary value. Fiat money is close to 100% monetary premium as it has virtually no alternative value, but it is also not a bearer instrument; its ‘intrinsic value’ is shown below.
The ideal money is 100% monetary premium, with no alternative values or uses, only information content, and yet also a bearer instrument; pure money, if you will. Such a thing has never existed in the history of human civilization, until now.
When I say that most of the above features of an ideal money have never existed in human history “until now”, the until now is of course talking about Bitcoin - what it is, what it has achieved, and what it means for human civilization. One does not need to understand all the characteristics and features of bitcoin to recognize its value any more than one needs to understand how an engine works in order to drive a car, but it’s important that for anyone who does choose to deploy all of their effort and intellectual capacity to scrutinize bitcoin as a money that it survives any such scrutiny and does so with flying colors.
Why Fiat money is broken
The fiat experiment:
The fact that all fiat money is broken is one of the most important secrets hiding in plain sight. Fiat money fails all of the above criteria of an ideal money, catastrophically.
How the money became broken is best understood as a two-step process, firstly where gold as a bearer instrument was replaced by paper gold as a proxy; this was at first an enhancement and innovation, allowing gold to be freely traded far more easily as credit/claims, with high divisibility and portability, bringing tremendous convenience albeit with a general systemic risk of rehypothecation, fractional reserve and risk of the redemption of paper gold for physical gold eventually and suddenly going away (surely unthinkable!?), but people just got on with their lives not properly recognizing or mitigating that risk.
The second step, was indeed, where the state abandoned the notes’ convertibility to physical gold - essentially a soft default. The U.S. did this in 1971, and because most other national currencies were backed indirectly by gold through USD, their currencies suffered similarly. From there, the state could print money to expand the supply and debase the ‘money’ with impunity, which it has done. Again, the ‘money’ continued to sort of work, and people got on with their lives. The structural damage was unmistakable though. One of the many effects is shown below, from the wonderful website https://wtfhappenedin1971.com/
Hence, fiat was normalized in a unique two stage process. If it had been imposed immediately as an alternative to physical gold in one step, it likely would have been repudiated and a prohibitive physical gold vs. fiat exchange rate would have immediately emerged. But because paper IOUs claims for gold were already normalized it was a seemingly far smaller step to just remove the ‘claim’ that few individuals ever considered redeeming anyway.
The reasons for how fiat is broken are manyfold, but some of the most important ones are noted:
Inflation:
At its core the solution to money is the solution to inflation. The most important indication that fiat money is broken is its rate of real inflation. Inflation is a complex topic where people can get caught up in semantics and definitions. Inflation is simply the increase in prices of the goods, services and assets you want to buy. Note, it’s not just the things to have to buy like food and shelter, but also more broadly the things you aspire to acquire - that might include a summer house, a particular painting or a particular nice car, which by necessity means that everyone’s actual inflation is different.
Monetary inflation is the rise in prices in relation to the state increasing the money supply or printing money. Historically this might have been 2% or not much more, and so might go unnoticed, but when it is double digits it is impossible to ignore, or easily accept; the money starts to bear scrutiny from the public - a scrutiny that was never there when inflation was merely 2%. The public’s confidence in the money becomes at stake, and ultimately confidence is the only thing that sustains a money’s value over time; the ‘money’ in Venezuela and Zimbabwe failed because the public lost all confidence in it. People might draw distinction between these two failed monies and something relatively strong like the USD, but there is no structural difference between them - the only difference is the size/speed of the ‘leak’.
Some people assume that inflation is somehow required or benign, but there is no example in nature or any engineering where a leak is required for the system to work efficiently and in fact in virtually all cases any such leak is fatal; money is no different (h/t to @saylor for this insight). The idea that some financial repression is somehow acceptable or legitimate because the state is doing it is a very poor reflection on how hoodwinked, uninquiring and apathetic the public has become. Also, the public is conditioned to blindly accept the national currency, as there has never been any widely used practical alternative in our recent fiat-denominated world, though in many hyperinflating countries the USD is sought out and even demanded as it has captured the public consciousness in many countries as not just the current global reserve currency but one that has relatively lower monetary inflation to their hyperinflating fiat; in the land of the blind, the one-eyed man is king.
Supplemental to monetary inflation would be other things that raise prices, which can include market supply shocks but ultimately most can be linked back to state intervention including licensing, restrictions, laws, impositions, regulation and taxation all of which introduce costs and friction in an otherwise free market. One can argue about the merits or lack thereof of such state interventions but there’s no debate that they increase costs of provision of goods and services and trade.
Consumer Price Index (CPI) is a state-published inflation that is biased to the downside, as it tries to accommodate a basket of goods and services that don’t increase in price while selectively ignoring the goods and services that are increasing in price, so the real rate of inflation is typically much higher. Almost all countries are currently experiencing high, typically double-digit real inflation. The implications are that one has to spend or invest one’s money ASAP and there is no ability to save, because the purchasing power of those savings is eroded over time. The half-life of the USD is now ~ 5 years, where it used to be ~10 years and almost all other countries are worse.
One could argue that fiat money only commands confidence because people are uninformed, have apathy toward the complex subject of money, the idea of ‘government money’ has been normalized and people even assume such government management of money is legitimate, necessary or even ‘modern’. After all the fiat money kind of works, at least until now.
Inflation is probably the most significant and convincing argument for why the fiat money is broken. It expropriates the time and labor of the poorest in society, the asset-poor specifically, in a silent, gradual way, unbeknownst to the innocent victims - like people aging, grass growing or paint drying. It's the systematic economic destruction of people’s lives (particularly and specifically the asset-poor) by the state, from which only the asset-rich are insulated.
“Jobs-to-be-done” is a very useful framework popularized by Clay Christensen at Harvard Business School, where the consumers’ fundamental needs are carefully evaluated to interpret a product or service as being ‘hired’ to do a job and ‘fired’ from the job, as the case may be. In this model, fiat has been hired (albeit with no choice) for a few decades but it’s clearly flunking in its job. While bitcoin will exhibit a volatile fiat-denominated exchange rate/price during its emergence, it structurally addresses the ‘jobs’ of SoV and savings in a way that was never possible before, and fiat structurally destroys the ‘jobs’ of SOV and savings not unlike even a commodity money that is being overrun with supply. An increasing number of people now continue to ‘fire’ fiat and ‘hire’ bitcoin.
Related to the above, arguably the most important question one can ask in relation to evaluating anything, any product or service is to start with the question “what are you trying to achieve?” What is money supposed to accomplish for us? The answer certainly should not be “whatever government is trying to accomplish for itself”, but surely should be what individuals want to accomplish for themselves, in particular in relation to their time and effort and skill (‘skill’ is a 3rd dynamic here, originally noted by @Wealth_Theory) that they expend with their blood, sweat and tears to store that energy or use as they please, at their full discretion. Instead somehow it has been normalized that the state is somehow entitled to take its ‘pound of flesh’ over time, at its discretion.
It may come as a surprise to people that “only gold” (for good and obvious reasons) was instantiated in the U.S. constitution as money, and that fiat USD is thereby clearly now unconstitutional, not that you will see many politicians crying about that (though at least encouragingly, a small handful of worthy politicians are).
Finally, and perhaps most interestingly, Knut Svanholm (@knutsvanholm) has calculated that for every bitcoin mined (it’s ‘inflation’) in 2022, the U.S. government printed $21 million USD, ironically, given the terminal supply of bitcoin is 21 million. This relative inflation rate is fascinating; imagine how it will be at the next bitcoin halving in 2024, and the one after that….
Political capture and weaponization:
I mentioned earlier that a good money is used by your enemies. Recently the U.S. froze the deposits of about $300 Billion held by Russia in Germany. Another recent example is how The Canadian Government froze the bank accounts of people who donated to the Truckers and shut down an associated GoFundMe account. Irrespective of the circumstances of such freezes, the very fact that such actions are possible highlight the fact that ultimately the state has a kind of ‘kill-switch’ on all of our money; the money is captured by the government, undermining individual property rights - rights which are the foundation of a civilization.
The idea of private property was deemed so important by the founding fathers of the. U.S. constitution that it was originally the text in the US declaration of independence - “Life, liberty and pursuit of property”, before “happiness” replaced “property”. Bitcoin is property the likes of which humanity has never seen before because it can be owned to an extent never before possible - it’s private property on steroids.
Unrelenting debt spiral:
The U.S. government alone has added $9 trillion in debt in four years, now totally $31.5 trillion, and growing inexorably. The debt was a ‘mere’ $5 trillion just twenty years ago. Along with the now much higher interest rates imposed by the Fed to fight inflation (to fight inflation the Fed and Treasury caused), just the servicing of the U.S. debt burden has now ballooned from ~$350Bn to ~$800Bn. This places the burden on the employed middle class, which is shrinking. Demographics further exacerbate this, with boomers retiring.
Top-down and Imposed:
Gold, feathers, beads and salt share a quality that when they were established as money they did so organically in a bottoms-up manner. No person, group or government anointed their value as money with an edict, but rather regular people in everyday activity over time came to recognize one having better qualities than another as money and acted accordingly in self-interest; they were not persuaded by any authority but instead had to persuade themselves, or not, at their discretion. A state might play a role in accelerating this awareness and recognition (or attempt the opposite) but could not change its ultimate path. Fiat is an exception to this because it is very much anointed and imposed, and we’ll touch more on that later. Any persuasion used to drive adoption of a money only underscores its illegitimacy.
“Managing money”:
The idea that money needs to be ‘managed’ by a central bank is a bit fantastical but has been normalized as part of the recent fiat experiment. The main two forms of this management is around how much money to print and what interest rates to arbitrarily set to achieve some supposed goals which include seemingly noble aims of low unemployment and “stable prices”. Under a sound money standard, there is no potential for any government policy for either monetary expansion (a gaslighting word for increasing money supply) or setting interest rates.
The idea of the central bank somehow trying to manage volatility typically just ensures that the volatility is postponed and pent-up for later, often disastrous, release, but by then it becomes a different political administration’s problem. The incentives are to kick the can down the road to release later at greater volatility, attempting (but failing) to solve the ‘crisis’ that they caused to begin with. Over time, the ‘economic policy’ tools becomes increasingly blunt, their effects more diluted and with longer latency, resulting in bigger swings in economic conditions bringing greater and more unexpected consequences of economic destruction as the central bank tries to blindly navigate the path between inflation and depression through the ‘rearview mirror of the car’.
Nation-State Affiliation:
Governments could never coordinate on truth, or trust each other on something as important as a monetary standard, so out of expediency and hubris each created their own versions of it (Yen vs. pound sterling vs. dollar etc..) National affinity with monies has now become normalized and to the uninformed instills a sense of credibility, trust, ‘backing’ and even respect. This nation state fiat framework by necessity led to a complete fragmentation of global monies along state-controlled lines which has added unnecessary friction and uncertainty to global trade and investment. How can a company invest in say a factory in another country when in three years the relative exchange rate is highly uncertain, making the investment highly uncertain. The result is that the investment just doesn’t happen, when in a single, sound-money environment such an investment may have happened because of the significant reduction in uncertainty. A single, organically preferred, global money will always facilitate better coordination (both nationally and globally) than any group of imposed nation-state monies. This harks back to the notion of the most saleable thing (always singular, never plural).
Credit expansion:
The current fiat system thrives on credit expansion, necessitating ever more credit every year to drive GDP, which ultimately is more of an MMT novelty metric than anything else. GDP “growth” is flamboyantly heralded, while the associated credit expansion, which has by necessity grown increasingly higher to fuel an increasingly lower incremental GDP growth, is swept under the rug, until it blows up. In fact the fiat ‘money’ itself is much better described as credit than money; the fiat you receive is never a bearer instrument but always an IOU. Even under the gold standard the gold-’backed’ banknote you received was an IOU. Typically, the government keeps interest rates low which just pulls forward demand (not creating new demand), and so creates a mirage of present growth at the expense of future growth. Ever more ‘growth’ is needed to pay for an ever larger debt burden and the system can always be extended by kicking the can down the road, but that only makes the eventual blow-up all the larger - an idea popularized recently by Jeff Booth (@jeffbooth).
As the venerable Lawrence Lepard (@LawrenceLepard) notes in his pinned Tweet: “Blue line generates income to pay interest on red line. See the problem? It's just math.”
Ultimately human nature is corruptible and anything that can be corrupted will be. The solution would be a money that lies outside of human influence.
Ultimately fiat is if anything best understood as pretend money, an artificial construct designed primarily to give the state special powers and latitude. It is not just flawed, but flawed by design. A state that can deliver services by silently printing money yet thereby equivalently debasing the population’s money they already own, unbeknownst to them, is a super power from the state’s perspective; driving high popularity and approval from the uninformed masses. Till now, everyone has been too indifferent to even ask questions, never mind to seek alternatives, conditioned to accept the status-quo, but the costs of such indifference are becoming significant and even prohibitive. Will people hold dear to the increasingly obvious broken pretend money, or will they recognize and migrate to what is emerging as the increasingly obvious ideal money, money that the state really doesn’t want you to prefer, for some reason? An important point is that every person and company is in a position to make their own determination independently - they do not have to convince or seek approval from the powers-that-be. Even if fiat were not failing and miraculously were immune from debasement, the large family of ~180 fiat currencies fracture the global economy by design, imposing pointless friction to no one’s benefit except FX traders.
Demonetization:
One of the most profound secrets hiding in plain sight in our fiat-denominated world is the extent to which massive asset classes including real estate, bonds, collectables, art and even stocks and equities are ‘monetized’ because the fiat money is broken. Because saving is no longer possible (any ‘risk free’ fiat interest rate yield is less than even the official interest rate; even junk bond rates give little or no real yield), everyone is forced to either invest or spend/consume the money they get. This, by necessity, drives up the prices of the investments and products and services we consume, and forces people to undertake risk that they may otherwise have no appetite for. Some see this as some kind of benign ‘stimulus’ but it’s more like a cattle-prod, driving everyone into mal-investment and mal-consumption. In contrast, historically under the gold standard, savings was always an option; gold worked as an SoV, despite some limitations previously noted. What happens when this >$300 trillion in monetization of assets shifts from those assets to its true home, the future sound money?
Now that we have a true, viable, sound money, in Bitcoin, everything that is currently monetized will eventually collapse into bitcoin. Again, this is a big idea, but the idea survives careful scrutiny. Again, touching on the concept of equilibrium, on what basis would any monetary energy persist in faulty SoV ‘vessels’ like bonds and real estate, when the fit-for-purpose SoV vessel, Bitcoin, exists alongside? All of these assets thereby revert to their use value; a house becomes valued at its use with virtually no investment component; such was the case historically under the gold standard. If this demonization idea is hard to imagine, keep in mind that there will be little or no credit market in the future, and to the extent there is a small credit market, interest rates can be expected to be high, perhaps prohibitively high. Mortgages will become rare as people will buy houses as they once did under a sound money standard, by saving first. We can expect prices of houses to be vastly lower, and the bond market will barely exist, if at all.
Why bitcoin is a solution - an ideal money
The book “Blink”, by Malcolm Gladwell, shows us how humans instinctively make short-cut judgment calls in our interaction with the world, and nine times out of ten those judgements are correct and useful; the fact that our ancestors relied on this heuristic successfully is the reason each one of us is here today. I see this as a key reason most people instinctively dismiss bitcoin as something that must be flawed or is being pushed by bad actors. One would be accused of hubris for suggesting an upstart open-source computer program could replace the world’s money and eventually be worth the equivalent of hundreds of trillions of dollars. It sounds a bit like monopoly money, and in the case of the dozen or so predecessors of bitcoin, they ultimately were failures as they didn’t solve the key problems that bitcoin has solved. Also, for many in the developed world, Bitcoin appears to attempt to solve a problem that they don’t think they have.
One can describe Bitcoin in a number of ways - a monetary protocol, a rules-based money, an engineered monetary network. Bitcoin is a technical solution to an expression of ideals in money - a technical solution that has never been achieved before.
A reasonable critique of bitcoin is that it hasn’t been around for very long. However, 14 years is long enough for any bug or vulnerability to be exposed in its open-source code, with a ‘bug bounty’ vast orders of magnitude higher than any in history. Also bugs tend to get exposed early. Finally, one can recognize that Bitcoin is now on a path to ossification, where there will be no structural changes on layer 1; the most important role for bitcoin on its layer 1 is the SoV use case, which needs to be credible for a thousand years. This is the foundation - if you don’t get this right, nothing else matters. Layer 2 is the ideal playground for innovation and experimentation, in particular the Lightning Network, to scale the network globally for MoE.
To elaborate more on layer 1 and layer 2, one can think of Bitcoin layer 1 as a settlement layer, and layer 2 as a payments layer where payments is a subordinate function of settlement. Even if bitcoin occupied no role whatsoever in MoE, it would still be the pinnacle concept of SoV, potentially occupying a Total Addressable Market of >$300 trillion. But, by scaling on the 2nd layer, bitcoin is on a path toward occupying the MoE role as well, toward occupying the role of all money, globally, forever. It’s important to note that building on layers is not a new idea, or a suboptimal idea; it has been the same with the internet.
Pull factors:
If bitcoin did not exist fiat might be sheltered from the headwinds facing it because while there would be push factors, as outlined above in the problems with fiat, there would be no viable alternatives - no pull factors. Gold should continue to play a role, at least in the medium term, because of its entrenched following and broad global recognition as a traditional sound money and traditional inflation hedge, though as noted above, it has limitations that disqualify it as a viable long term solution to the problem of money in the modern world. Bitcoin on the other hand is a viable alternative that can literally and completely migrate all monetary energy from the broken fiat-denominated ‘standard’ to the new, parallel, unbreakable, globally teleportable, bitcoin-denominated sound money standard.
Fiat maximalists tend to operate under an assumption that their monetary network is an exclusive and hemmed-off system, where people (their ‘subjects’) have to suffer through the impositions of debasement and interest rate changes dictated by their insidious cabal of overlords; they assume they are operating in a closed system, and they were right, but not any longer, thanks to Bitcoin. We now have the first (and last) viable, open, borderless, pragmatic, parallel system, completely independent of the fiat system (other than fiat ‘on-ramps’ and ‘off-ramps’). That bitcoin is exogenous to the existing fiat system is a wonderful benefit as there are no dependencies or gatekeepers on bitcoin’s adoption and growth that reside in the fiat world. Even the European Central Bank head Christine Lagarde as acknowledged that “if there is an ‘escape’ it will be used”.
Governance:
Bitcoin’s rules-based, engineered monetary network means that there is no ‘governance’ required, like there is in the fiat system. The ‘monetary policy’, to the extent you can call it a policy, was set in stone at the very inception of the protocol and can never change. “The nature of Bitcoin is such that once version 0.1 was released, the core design was set in stone for the rest of its lifetime.” - Satoshi Nakamoto. With bitcoin we never have to worry or even think about monetary policy ever again. Soft-’forks’ have applied updates and enhancements (all importantly backward-compatible) to the protocol to support scaling and more flexibility, but the core nature of the network’s monetary policy remains unchanged and will always remain so; if one were to attempt to change it one would merely be creating a new and different protocol. It would be akin to changing the rules of chess and then trying to get others to follow the new rules (idea popularized by PlanB) - to what end? Good luck.
The bitcoin monetary network functions independently of any human intervention and cannot be structurally influenced in any way by any individual, group or government. Constrained by the laws of math and physics, the network has unfair advantages compared to a fiat network that is unconstrained, subject to the whims of people with questionable motives and politically-captured goals. One of the many wonderful implications of this essentially autonomously functioning money is that not only do we no longer need thousands of people working at central banks (~ 2,500 working at The US Federal Reserve alone), but those people, and everyone else, are now compelled to focus on creating real value in the world, for the first time. Creating products and services that others need and want becomes the way to succeed and thrive, as it should be. There is no more ‘Fed-watching’, no more ‘hedging’ against decisions made by a cartel of insiders behind closed doors, no ability to even influence, never mind set, interest rates, and of course no ability to debase the money. The ‘tools’ the central-planners once had are now gone forever, and the economy functions all by itself, as it always would have, if left to its own devices. The unerring protocol of truth replaces the tapestry of politically-captured, short-sighted institutions and their agendas.
The first money:
The implications of the traits of an ideal money outlined earlier is that one can’t help but recognize that all previous so-called monies never had these qualities. In this sense one can argue that if something were to achieve these traits, it would be the first money and that all efforts before then were an approximation toward an ideal, but one that could never be reached.
Bitcoin is the first structurally secure money that has ever existed. Absolute scarcity brought not just credible scarcity that's quite a bit better than anything that has ever existed before but it brings scarcity that if extrapolated into the future brings deflation, because clearly some Satoshis (there are 100 million Satoshis or sats per bitcoin) will be lost over time by some percentage of the population.
There is a fallacy that Bitcoin was the first attempt at an engineered money, and thereby can’t be expected to be the last or the best. But, there were countless attempts before it (Ecash, E-gold, Hashcash, the list goes on); the key point is that all of these were fundamentally flawed in that they all required some intervention of a third party or were not decentralized, and so had single points of failure, thereby subject to being shut down by the state. Bitcoin has been the only viable digital monetary network as it solved these problems.
Why nothing can compete with bitcoin - why there never will be an alternative:
Sui Generis:
This is a concept I first heard of from the venerable Adam Back (@adam3us), where something is singular, ‘of its own kind’, ‘peculiar to itself’ - where there can only be one of something. The President of the United States would be an example, and I would suggest bitcoin will ultimately be a similar example as it is the only absolute scarce thing (apart from time); a convergence on a single money. A thought experiment here would be to imagine a world with a single global money, a universal language of value facilitating borderless human economic interaction globally, with the lowest level of trade friction in history, thereby driving the highest prosperity in human history on an equal playing field for all, that was never before possible. Then imagine the idea of introducing a second money. On what basis would that second money coexist alongside bitcoin into the long term, and what additional value could it bring? What incremental ‘jobs-to-be-done’ would it facilitate, not already done so by the single money? None.
The concept of money is a unique and singular one, and converges on one. An ideal money is not complemented by or supplemented by any second money. Silver coexisted alongside gold because it brought a divisibility value proposition that gold could not easily satisfy, but when one has a money that meets all the necessary criteria of an ideal money there is no role for even one extra money.
Gresham’s Law:
A related idea here is Gresham’s Law, where ‘bad money forces out good money’; the idea here is that historically anyone receiving money in payment would quickly pass on money that was marred in some way (coin clipping would be an example) and keep any pristine money. The idea was originally narrowly focused on versions of the same money, but the idea holds just as well if not better when applied to competing monetary networks. Any rational person in Argentina getting paid in pesos immediately spends them or converts them to USD or some other stronger SoV. Bitcoin is no different; while it is not broadly understood, it does not have to be to take hold; its value just has to be recognized over time by more and more people.
Schelling point:
A final, related idea here is Schelling point; in game theory, it is a focal point solution that people tend to choose by default in the absence of communication. Over time, as bitcoin’s unfair advantages become more apparent and adoption continues, that adoption drives more adoption. There is no competition really, because any such competition effort would either be imposed by authority (breaking foundational ideas of what an ideal money should be) or a suggested (but not real) incremental technological improvement over bitcoin, when any such improvement could be adopted directly by a bitcoin soft fork. Any proposed competing money would have a small group of actors seeking some exclusive economic gain; a pre-mined contrivance fueled by funding from VCs etc. - never as credible as a neutral, global commodity money that already solved the foundational problems of money that had never been solved before (e.g. Bitcoin solved the critical “Byzantine Generals problem” - ensuring the cooperation of a decentralized system toward a shared goal with no communication between participants. This problem had never been solved before in human history).
A problem solved - first and only:
You only solve a foundational problem once, and you don’t incrementally solve it a bit better over time. This idea is akin to the discovery of fire, the wheel, or the printing press - the idea itself is the salient part. The main discovery or invention with Bitcoin is absolute scarcity (drawn from the solution to the double-spend problem, giving us the first viable digitally conservative network). Once discovered, the idea cannot be discovered again; it was a one-time thing. It was not just about discovering absolute scarcity and combining ideal qualities of money in a viable, real world protocol, but doing so in an open way, where the asset had no monetary value for 1.5 years, where there was no pre-mine, and where the inventor disappeared. This emergence from a curiosity with no monetary value whatsoever for 1.5 years, then to de-minimis value, then to what it is today, is a set of unique circumstances that are irreplicable and unrepeatable; a singularity. And that makes all the difference. The ideal money is now solved, and it won’t be solved again. Any proposal for any new competing effort looks foolish at best and reveals a lot about the proponent.
A final note on our old friend gold: the shortcomings of gold and how bitcoin has no comparative disadvantages, make the winner pretty obvious on a long enough time horizon. Monetary networks of feathers, beads and salt didn’t survive against the monetary networks of precious metals; neither will precious metals survive against bitcoin. Gold was the best money for thousands of years, but there was a gap between it and ideal money; a gap that has now been closed.
Equilibrium:
It’s sometimes said that USD can expect to thrive alongside bitcoin as a currency or payments layer, with bitcoin playing the role as SoV and settlement layer. While we may expect some adoption and popularity in trade using USD over ‘crypto’ rails (e.g. Tether or other stablecoins) because they bring benefits of speed vs. moving USD over legacy fiat rails, USD is still (and always will be) ‘the best looking horse at the glue factory’ of fiat (quote from Greg Foss @FossGregfoss). I therefore I see no future for USD. The idea that USD, over the long term, can find some equilibrium price alongside bitcoin and some role that compliments bitcoin doesn’t survive scrutiny. USD has no structural advantage over bitcoin (In combination with the bitcoin Lightning Network) in any capacity, while retaining significant structural impairments, primarily debasement and political capture. Gresham’s Law and the Schelling point inexorably ratchet in one direction, and we are left with the Sui Generis of a single, ideal money. There is no rational argument for holding USD vs. bitcoin over the long term other than speculation on the continued ignorance and apathy of the population, while the music still plays in the game of musical chairs. Bitcoiners are already sitting down, even as the music is still playing.
Conclusion
A note on CBDCs:
Central Bank Digital Currencies are making their way onto the scene, some already deployed in countries like China and Nigeria, with results varying only in proportion to a government’s control of their citizens. CBDCs herald in more direct and targeted controls like ‘money’ with expiry dates, that must be spent before a certain date, total surveillance of everyone’s purchases, ‘climate’ credits (or demerits) on purchase behavior and even travel restrictions (your money will only work in approved stores or geographical areas), and ability to cancel people financially; dystopian political, captured money taken to a completely new level. Even under the most benign of lights, CBDCs can be thought of as multiple ‘intranets’ that were corporate, permissioned precursors to the internet, eventually overwhelmed by the obviously better idea of a single globally-connected, neutral, universal internet.
It’s uncanny and prescient that not only did Satoshi create bitcoin in response to waywardness of government spending in the wake of the 2008 Great Financial Crisis, but he also ensured, by happy accident, 14 years of track record before the advent of government inroads of CBDCs. Now we not only have an ethical, shining innovation in money but one that is a bright, sharp contrast when compared to the odious apparatus of the emergent state controlled CBDCs. Bitcoin is an assurance of freedom and truth, while CBDCs are an assurance of tyranny and slavery.
2nd Order Effects:
We have only covered bitcoin as money in this article, with no mention of 2nd order effects, which are likely to be dramatic, benefiting humanity in ways that are literally unimaginable. Micropayments in particular, and the associated ability to stream flows of money (vs. discrete payments), all in real-time, is already starting to unlock use cases that were never feasible under any historical money. Bitcoin may become even more ‘boring’ but the 2nd order effects will be expansive and profound.
Doubts:
There are critics of bitcoin who have positioned themselves as having evaluated Bitcoin and dismissed it for ‘x’ reason; interestingly that reason is different for each critic, which is kind of hilarious. Also, when one reason disappears (e.g. “China controls it”), their critique lurches to something else. My only advice is to evaluate bitcoin yourself, from first principles. If anything, a traditional ‘economics education’ is a liability; I speak from experience of having a four year degree in the default MMT “economics”. The short book “Economics in One Lesson” by Hazlitt is vastly more useful than any such degree.
Also, it should be understood that different people look at bitcoin through different lenses. If one’s country is undergoing hyperinflation one does not need to be sold on the benefit of a money that can’t be debased, and if one is facing tyranny, one does not need to be sold on the benefit of censorship-resistance. Bitcoin is not just one thing but a large set of solutions to a large set of problems.
The real deal:
As we speak, bitcoin has a heartbeat; a new block in the bitcoin blockchain is found approximately every 10 minutes on average. Fiat or gold has no such heartbeat; they are in a sense dead. In some ways bitcoin is alive in that regard, kept alive by human incentives, but applied to a network that automatically and dispassionately maintains integrity and incorruptibility devoid of human influence, immune from those who would wish it harm (parasites, statists and gatekeepers); all they can do is inadvertently reveal their intentions, and that's a good thing.
10x:
In technology, a new paradigm is typically not just incrementally better but should be ‘10x’ better than anything that came before it. Bitcoin represents the first time technology has been applied to the concept of money, which is surprising. Applying this notion to money is certainly a big idea; the prospect that existing monies could be replaced, completely, with a single, new, global money, forever. The idea of an ideal money, the first money even, is a daunting one, with some seemingly disruptive implications, though many more hidden benefits.
The supposed ‘safety net’ of government spending and bailouts will eventually collapse, as money printing will be impossible. Zombie companies will no longer be kept alive as governments can no longer print money; their death should be welcomed by all as necessary creative destruction that is required for any healthy economy and civilization; bad ideas should die out, replaced by good ideas, arbitrated fully by the free market alone. Banks like JP Morgan and Goldman Sachs that were bailed out in the Great Financial Crisis would not be bailed out in the new bitcoin-denominated world. These seemingly-scary consequences will be balanced by a new fertile ground of freedom, individual action and personal agency that we never had before; most people, globally, will now have those freedoms by default. “A ship in port is safe, but that's not what ships are built for.” (Rear Admiral Grace Hopper:) This significant unshackling of the free market and the associated shrinking of government size a big idea, but that doesn't make it any less true or less inevitable.
What’s next:
Adoption is the foundational next step, no different to adoption of the internet or mobile phone; we are likely still in the innovator stage, not even having ‘crossed the chasm’ to the early majority phase. The transition is underway, alongside Bitcoin’s unerring heartbeat, seemingly gradually, but perhaps eventually suddenly. The path to adoption will certainly be rugged and rocky but there are at least no structural unknowns or surprises in the network, something which can never be said of fiat, or any other would-be monetary networks. To the supposed latecomers, complaining about being late to a network that has <2% adoption so far is a bit rich. If one is a late adopter to, say, the mobile phone, one bears no real cost for being late, other than the opportunity cost of enjoying the convenience and benefits of the network earlier. In contrast, if one is late to the new dominant global monetary standard, the opportunity cost is the sum total of your stored economic life force on Earth - not just your money, but all your supposed investments that will be demonetized.
While Bitcoin’s path most likely leads to global monetary hegemony, adopting bitcoin is not a binary decision for people or institutions, and much of the adoption will involve ‘getting off zero’. Just the curiosity acquired in getting off zero can lead to more understanding and more conviction. That said, ultimately Bitcoin is a binary phenomenon, in that it will not reach some equilibrium value as described earlier, but absorb all monetary value; no other monetary asset can withstand and survive Bitcoin’s exclusive catalog of unfair advantages as The universal, global SoV. No other money will play second fiddle.
Bitcoin is not an investment opportunity to make a buck, but a foundational, profound paradigm shift in the very denominator of the new global economic language of value that will be the largest wealth transfer in human history. Generally, the best ideas win and Bitcoin is not just a good idea, or the best idea (as that might suggest a better one can come along) but the only idea; the inevitable idea. There is no alternative; the fiat can getting kicked down the road is approaching a wall and can go on no longer; the fiat ‘tools’ will no longer work.
A stark reminder about bitcoin is that it might never have been discovered or invented, and the contrast between the utopian aspects of the bitcoin-denominated world and the alternative, dystopian CBDC-world could not be more stark. Even more disturbingly, Bitcoin might have been discovered too late. But Bitcoin is here, now. It is not a work-in-progress, but a fully formed solution,operating flawlessly in the wild, in the most adverse conditions, antifragile - gaining in strength after each seeming obstacle it confronts and overcomes. It is something that no one saw coming.
Bitcoin’s path toward its role as The monetary network is unclear and will no doubt continue to be characterized as volatile, too volatile for some it would seem, but the destination is inevitable as adoption ratchets in one direction. The idea of separation of money and state may strike the uninformed as a fanciful libertarian idea, but it is now not just an idea, but a credible, emergent reality, open to anyone to participate in; it is the kind of idea whose time has come. With or without you, Bitcoin’s destiny is to become the last coin standing.