Oddbean new post about login | logout You said a lot of things that are contradictory. Why would society stop working for worthless fiat? What causes them to recognize that it is worthless? When that happens, and Bitcoin is not measured in fiat, then what is the NGU that it is measured by? Governments will still create demands for payment in their sovereign currency, not Bitcoin. Until that issues is resolved the status quo does not go under.
(1) why did the Roman legions stop working for Rome? Read about the history of other financial collapses. (2) bitcoin NGU is measured by its purchasing power independent of fiat currencies. If the dollar became 100% backed by bitcoin and so it’s NGU, too it wouldn’t matter to Bitcoin’s success…Bitcoin’s NGU still is important. (3) you can’t make credit available under a bitcoin standard. Individuals would take out loans based on 5+ year treasuries and buy bitcoin. The system implodes on itself pretty quickly.
You didn't answer any of my questions and instead proposed contradictory ones in response. 1) Military might that is grown through resource acquisition will inevitably lead to lack of sufficient resources within the domain to sustain that growth. That's also true of species in general without a military driving it's growth. 2) Bitcoin NGU is directly related to fiat currency valuation. Purchasing power grows in fiat terms. On a Bitcoin standard, its NGD. As long as we have NGU we won't be on a Bitcoin standard. 3) You can make credit available under a Bitcoin standard. Your example is credit available under a fiat standard where people can speculatively attack the dollar via loans, and which is happening today.
(1) if the military might is being fed bugs and paid fiat that doesn’t cover basic necessities (food, shelter, energy) because they are too expensive then they aren’t going to be motivated to do anything of quality. That obviously extends to every single walk of life. Read Atlas Shrugged (or at least The Mandible) for a good narrative around how this happens in a modern society. (2) fiat currently is the rails for global medium of exchange and unit of account, yes. But bitcoin NGU does not need to be measured by fiat to have NGU. If someone was willing to part with 2 pizzas in exchange for 10,000 bitcoin in 2010 and now 10,000 bitcoin will buy a Caribbean Island citadel then NGU without fiat serving as a medium of exchange. NGU means purchasing power in terms of real goods and services. Fiat has been a useful technology to make that transaction quickly. (3) Even a 10% 5-year treasury rate against bitcoin’s annual appreciation (50+%) over a 4-year cycle would get blown up by the arbitrage trade. Yes, credit exists on a bitcoin standard but the expected yield is more in line with the appreciation of the asset…we’re nowhere near that in the current fiat world. (Aside: that’s the Michael Saylor trade…if everyone did it, it would blow up modern credit markets.)