Oddbean

Medium of exchange matters if you can't exchange your other MoE for Bitcoin easily and securely/reliably. It will become UoA by default once other currencies fail, or by proxy if it starts being used to collateralize other currencies. nostr:nevent1qqsg9lxjnp6u97xrnsgmft2sra6qdu7ky30l0e5xyuy5y5zrn6gj8vqpz3mhxue69uhkummnw3ezummcw3ezuer9wcpzqf95tyq2jtaug5nue7t4h4qknz8ygnrwfk0nvnz3tpn87pmky0lzqvzqqqqqqyggy8hw

I really think people have misunderstood the key limitations that led gold to be so completely captured. It’s about SCALE of value transfer, not simply that it’s centralized into custodians. The larger the scale, the MORE captured gold is, rather than less. Moving $200 of gold is easy. Moving $2 Trillion is practically impossible. Entire countries neither hold nor settle their own, physical gold during deals. This is perfectly opposite for bitcoin. The larger the amount the easier. The larger the amount the cheaper and move important and more astonishingly unique the degree of control and ability to safeguard, fine grain control and time for certain actions, to build vaults, to distribute politically, and 1,000 other options can exist to protect and remove trust in EVERY transaction of value above $1 million. Sure we want this to be given to everybody, but the idea that a small country and stick the middle finger to a large one and keep their capital perfectly safe, is a world shattering shift in the power dynamic. And there is no central bank in the world that can maintain interest rate manipulation against the market if $1 trillion in value can leave the country in under 10 minutes. To add to this, it’s a permissionless and open network. In other words, ANY solution, or tool, or protocol we want to run on top of it, it doesn’t matter who has what coins, in which custodians, under what jurisdiction, they still can stop no one from launching their own system payment or cryptographic tool to solve whatever problem they seek. What happened to gold will not come close to happening with #Bitcoin, even in the worst case scenario. Whatever a Bitcoin “captured” world would look like, if things decentralize and we get trusted custodians as the dominant platforms and all that re-centralization that we got with the web… it STILL will be orders of magnitude superior to the fiat world we are currently in because even if it *fails* to conquer our entire vision, bitcoin still solves some of the most critical issues of gold merely as a global digital, permissionless currency backing, perfect collateral, and censorship resistant SoV. IMO, it will be revolutionary no matter what. It is up to us *how* revolutionary we want it to be. I dig more deeply into those key differences in this show if interested: https://fountain.fm/episode/ZBlS2FEz5lCWlQQeSG5K

That's the power of Bitcoin. It's wonderful and so necessary. A sound reserve asset. It will be accompanied by Monero which is a much better currency, money, medium of exchange and digital cash than Bitcoin

I disagree, bitcoin’s value won’t be as great as if it is adopted with MoE and UoA but bitcoin will still become more and more valuable as miners buy ASICs and electricity for fewer and fewer bitcoins.

Bro what? They're all equally important. You couldnt acquire a SoV if it doesn't function as a MoE/UoA. You have to be able to exchange goods/services in a known amount for it to mean anything as storage🤙🏻

But we’re comparing it to enough unit of account (typically USD) when transactions are happening right? I don’t necessarily disagree but at the same time the dollar or the medium of exchange we are “pegging it to” for the transaction serves as the UoA for now?

That's also the same perspective it functions well as a store of value (because we all know 1BTC=1BTC). They are all linked and cannot function without each other. You cannot acquire a SoV if nobody can transfer (MoE) it to you and the amount to be exchanged must be agreed upon (UoA), even if everyone is simultaneously doing a forex calculator in their head back to dollars to double check🤙🏻

"Medium of Exchange & Unit of Account don't matter" is twice as off base as "Store of Value doesn't matter" from the 20th century nostr:nevent1qqsfqxl9kywzwywf7hf595j3y889dfx7fyhfh5scw852v56na2jc4scpz3mhxue69uhhyetvv9ujuerpd46hxtnfdupzqxh7p36w84mcf6af8f0rlf255mhtqxfg6ynnnt5t5jpj0p5q3cmdqvzqqqqqqypyv0jt

Store of value is the whole game, for now. Store or Value is a prerequisite for it to be a Medium of Exchange. If, over time it is used more widely as a store of value, it will become a preferred MoE eventually. Medium if Exchange is a prerequisite for it to be a Unit of Account. If, over time is is used more widely as a medium of exchange, it will become a preferred UoA eventually.

This, in my opinion, does not contradict what I said. Mises and Rothbard are discussing the emergence of money as a concept. Ie why we transition from barter. It arises from the need to exchange goods and services. I'm discussing the emergence of a new currency.

In a barter economy, people realize that some commodities are more stable / divisible / liquid, and use them as intermediary goods (money). And then the market finds harder commodities that are harder to devalue. And then the market accumulates capital and finds better stores of value. But Bitcoin enters an established market economy where people's primary monetary needs are already met.

"Store or Value is a prerequisite for it to be a Medium of Exchange." and "store of wealth function is a derived and not a necessary function of money" cannot both be true. Otherwise, something could be a money without being an MoE and, at least according to Menger and Mises, this isn't possible. If your position is that you disagree with them then ok

I think the contradiction is surface level. Something can be a store of wealth and not be money. Eg. real estate. Money is by definition a medium of exchange, its "primary function."But not everything can be money. Value is a prerequisite, just like divisibility, fungibility, etc.

Yes, and the argument is that Bitcoin more resembles digital real estate Menger/Mises are saying the exact opposite of your last point. According to them store of value *is not* a prerequisite for money. But if you think they are wrong that is okay.

MOE matters for refugees in a hostile nation. MOE matters for cross-border remittance. MOE matters for people taking a stand against unjust laws. MOE matters in a world devoid of paper cash, or the people excluded from the mainstream financial system. MOE matters for victims of sanctions levied upon them by their own government.

WAIT.... Real estate was just getting older and going down all these decades? And that among us, dwell evil beneficiaries of cantillon effect whose wealth increases at rate of nominal money/credit creation that far exceeded what normal people see as "real estate gains"? Bitcoin has been the first thing to not only normalize the playing field, but also destroy the evil system too? nostr:nevent1qqsfqxl9kywzwywf7hf595j3y889dfx7fyhfh5scw852v56na2jc4scprfmhxue69uhkummnw3ezuumpw35x7ctjv3jhytnrdaksygq6lcx8fc7h0p8t4ya9u0a92jnwavqe9rgjwwdw3wjgxfuxsz8rd5psgqqqqqqsnu34fn

Seems logical that people globally will store long term wealth in Bitcoin, keep medium term savings in USD stable coins to manage Bitcoin’s volatility, and transact for daily needs in their local fiat currencies.

Value is subjective. See diamond–water paradox. https://github.com/libbitcoin/libbitcoin-system/wiki/Lunar-Fallacy https://en.wikipedia.org/wiki/Subjective_theory_of_value https://en.wikipedia.org/wiki/Paradox_of_value Also, consumption requires production. We don't live in the metaverse.