Someone asked if I thought bitcoin would work out.
Lightly edited, I replied that:
It depends on what is “work out” is I guess.
Will it be a life-boat in a sinking economy as the pound and the dollar crash into nothing and socialist-fascism takes over the whole globe except for bitcoin citadels in what is left of the truly free world in Monoco and El Salvador?
Probably not.
Will it become a global unit of account and a new gold standard?
Probably not.
Will it continue to be a good savings mechanism to protect against the next 50 years of fiat inflation?
Maybe.
Will it get hacked?
All blockchains really are socially enforced, so if it got hacked in such a way it pissed off and impoverished most of the people running nodes then they’d just fork to undo the hack. Lots of people would lose out, but most people (and especially holders who aren’t transacting) would be unaffected. Might even end up with twice the coin on two chains.
If it’s hacked such that most node-runners don’t care then probably also you don’t care unless you’re the unlucky one doing a transaction that day.
Will the bubble burst and the entire crypto-economy collapses and people finally realize that selling pointers to jpegs for millions of dollars is madness, and then bitcoin and the rest all drop 90% of their value and bitcoin enters a mining death-spiral until it’s uneconomical to mine even one block and only Doge rules supreme as an internet tipping currency at 0.1 cents per doge while the rest of the world just shrugs and continues to use the dollar?
Maybe.
None of that would surprise me at this point. I have no fucking idea what’s going to happen.
Bitcoin’s database technology has some advantages and some disadvantages compared to bank databases. It’s more resilient, it’s permissionless, it’s massively redundant, it’s terribly slow, it’s expensive, it’s hugely energy-hungry.
Block-chain technology is awful for every purpose that there is.
Except for maybe permissionless, resilient, uncensorable, unconfiscateable value transfer.
As a technology, it will continue to have those properties making it massively worse than any well run government/bank money could ever be.
So.
Are there any well-run government/bank moneys in the world?
The pound and dollar are the longest lasting fiat currencies ever, and are both about the same age as me. Just under 50 years old.
Every other fiat currency has been debased to zero in less time than that.
How are those two doing?
Inflation of about 5% a year on average in those 50 years has knocked more than 90% off the value of money stored under a mattress. If my granddad buried enough money to buy a house back in the 70s and I dug it up tomorrow it’d be worth barely a month’s rent.
For a while, it used to be that you’d get interest on money in a bank about the same level, so you’d break even if you put it in a saving account instead.
That hasn’t been true since about 2008.
Whether Bitcoin is a better money than the dollar isn’t a question of database technology, it’s a question of monetary policy.
Bitcoin doesn’t have a monetary policy at all. It’s just set like stone. No adaption. No smoothing. No management. No loosening in times of crisis. No revaluation to eliminate debt.
Is no monetary-policy at all better than a good monetary policy?
I would think a good monetary policy would be better than no monetary policy.
But I haven’t seen a government that would actually do a good monetary policy, including those centralized policy makers who manage Eth or Solana or whatever.
If they aren’t corrupt they are stupid and even if they’re smart, it’s impossible for a human to understand a chaotic system beyond the complexity of a human brain.
As far as I can tell economics is all bullshit.
The Keynesians are flat wrong, the Austrians are flat wrong, the Marxists are flat wrong and the neoliberals are just flat out wrong. Everyone else is even wronger.
Nobody has a clue what is going on.
We are rudderless and adrift in a chaotic economical sea so vast that it controls the weather and so uncontrollable that it defeats government.
Diversify, cross your fingers, tie yourself to the mast.
Things are gonna get crazy.
If you got eggs, don’t put ’em all in the same basket.
And if you have some sats, you can send them to me with Lightning:
