See here for PART 1 of the e-book "Broken Money & the way out."
BACKGROUND:
I spent some time today looking through the Invity people's fintech offering. We met at BTCHEL, where they launched/announced some cool banking features for us Europooreans. https://stacker.news/items/1580878, #1581849* #1585380
Particularly, quite convenient auto-stacking, payment cards with bitcoin/stablecoins, and juicy-af cashback on every spend. (Up to stupidly low maximums, it turns out -.-)
PART 2: BITCOIN FIXES THIS
The layout is very flashy, with lots of negative space and airy quotes. Still, the content is pretty dope.
Bitcoin did not fall from the sky in 2009. It was the result of a thirty-year intellectual journey that began with the birth of the internet.
A lot of normies miss that one... this was an inevitable discovery, given the many various components and incentives of how the world developed, ~1970 until today: money, inflation, communication, cryptography, internet, digitalization, online commerce, etc etc.
On the cryptography mailing list metzdowd.com, on 31 October 2008, a post appeared from a user unknown to anyone, with the nickname Satoshi Nakamoto. It contained a link to a nine-page paper, Bitcoin:A Peer-to-Peer Electronic Cash System. It was a cruel irony. The paper came out in the middle of the worst financial crisis since the 1930s. The American government had just approved the 700-billion TARP package to rescue large banks.
Nobody knows who Satoshi is. It is only known that he owns roughly 1 million BTC (today worth ~100 billion USD) from early mining, and in over 15 years has never sold or used a single satoshi. From the point of view of Bitcoin’s future, Satoshi’s anonymity and disappearance are a blessing. Bitcoin has no founder who could be sued, arrested, blackmailed or manipulated. It is truly headless.
I fucking love this distinction
We get a description of the halving, and how that robustly ensures a hard-capped money stock, how bitcoin is NOT crypto.
The difference between scarcity and unbendability In monetary theory the term unforgeable costliness is used. It is the requirement that creating a new unit of money costs real work, energy or some other form of resources that cannot be bypassed. Bitcoin takes this property to the extreme. Its supply grows according to a code-prescribed schedule that is perfectly predictable
Can't just copy it...
Scarcity does not come from the code itself, but from trust that the rules will not change. Bitcoin is trustworthy not because it has the best code (many projects are technically more sophisticated), but because its rules have survived 15 years without fundamental change.
FASCINATINGLY important paragraph. Also, here's a neat little money stock comparison:
"the first monetary system in history where there is no one who could add money on top."
...then we go head-to-head with gold. How does the orange digital gold stack up against the boomer golden one?
Gold is the only previous monetary asset worth comparing Bitcoin against. [...] If Bitcoin makes sense, it has to hold up next to the asset that has held the monetary throne longer than all the states of the world combined
- Durability: Pretty equal, physical vs digital.
- Portability: Bitcoin wins ("A qualitative leap comparable to the move from the telegram to e-mail.")
- Divisibility: Bitcoin wins ("it opens micro-payments gold could never serve.")
- Scarcity: "Bitcoin’s is absolute, gold’s relative (1.5—2 % a year)."
- Historical record
- Incumbency(?): Market size, volatility, political neutrality = either way, gold wins here.
Where Bitcoin shines is confiscatability -- gold failed as money historically _because_ it's big, clunky, physical, and liable to being taken -- and verifiability -- the average person can't really identify/verify well-made gold fakes... but identifying bitcoin as bitcoin is very straightforward.
Gold is the proven, slow, physical variant. Bitcoin is the digital, fast, more volatile variant. For an investor with a long enough time horizon it makes sense to hold both — not as an “either/or” bet, but as genuine diversification within the “hard assets” category.
SEVEN MYTHS at the Sunday Lunch
Lol at this subtitle.
Myth 1 — “It’s backed by nothing, it’s just code”
true, it's just code... that's the point, not being physical (Also: compared to what, browskie?! "Nor is the dollar backed by anything since 1971. The dollar is backed only by trust in the US government and the state’s ability to enforce taxes. Bitcoin is backed by mathematics, by the energy spent on proof-of-work, and by the network effect of millions of users")
Myth 2 — “It uses too much energy”
True, but "too" much is arbitrary and subjective. (Also: compared to what, browskie?! Checked in on the electricity consumption and buildings at the world's central banks recently??)
The global banking system consumes 260+ TWh a year. Gold mining ~240 TWh. Christmas lights in the USA ~7 TWh. More than 50 % of Bitcoin mining uses renewable or “stranded” energy — flare gas, geothermal, solar surpluses.
Myth 3 — “Only criminals use it”
True (#1579246, #1520572), but the word "only" doesn't belong there. Also: criminals using it is the hallmark of a good, unconfiscatable/permissionless money... it means nobody, not even law enforcement, can stop you. (Also, compared to what, browskie?! Look at the USD for money laundering, much??)
Myth 4 — “It’s too late to buy”
True, it kind of is a bit late. Its best days are behind it. Still: "This objection has repeated since 2013 (BTC $100). Since then it has risen 1,000×. In 2017 'too late' at $5,000. In 2021 at $50,000. Every level was, in hindsight, early." (Also: compared to what, browskie?! What else are you gonna buy, NVIDIA stocks? Well, ok, fair... but surely that one is too late?!)
Myth 5 — “It’s a bubble / a Ponzi scheme”
Has no issuers or promoter, no initial owner that exits at your expense. "Bitcoin has had at least four cycles with drops of 70—85 % over 15 years. Each time it returned. That is not the definition of a bubble — it is an adoption curve."
Yeah, fake bubbles without content don't do that.
Myths 6 and 7 — “The state will ban it” / “Something better will come”
Sure, possible. But also... perhaps not? Where is the improved electricity, improved internal combustion engine, improved TCP/IP, the superior QWERTY?
China banned mining in 2021 — the hashrate fully recovered within a year. India threatened, it never passed. Bitcoin holds 90 %+ of the market share among real cryptocurrencies with neutral rules. Money converges to a single standard.