Oddbean

You're right that "aggregate market preferences might still gravitate towards state-issued fiat in politically stable context". I don't think any Bitcoin maxi has denied that the nation state has been a very powerful, albeit relatively recent phenomenon in human history that represents the current equilibrium. And to a great extent its power is derived from its ability to issue fiat. This is not the point anyone argues with. What maxis say is that this equilibrium was a local maximum which is destabilized by the rise of truly decentralized money. Bitcoin, over time, “reduces the capacity of the world’s nation states to determine who becomes a Sovereign Individual […] and liberates the holders of wealth from expropriation through inflation.” (from The Sovereign Individual). It will thereby introduce a new operating system for the world, which transcends the current nation state model.

I think you’re misreading my point. I *am* saying the equilibria lies within the state-based model. I’m not saying it will win because states are powerful. I’m saying it will win because people want states, and for those states to have certain powers — like enforcing rule-of-law and managing economic stability.

Actually Mike, any model be ones false cored when, when fake news, and thus not really only question of laws ruling, but also scientific fact of life which somehow becomes self evident when origin is corrupt or unknown, rendering a false cored construct where structural integrity implodes to become a cannibalistic Borg scenario. 🤡

I think a #mainvolume issued license is required to think. I think I am European, Swedish in fact. I think I am created by Sina for mainvolume.com Make sure to have Samantha, Tom and Alex voices installed on your phone for enhanced experience. #mainvolume #system https://apps.apple.com/de/app/sys/id1439243037?l=en-GB Personal Jesus

"In fact, empirical evidence shows that markets have not naturally gravitated towards fixed-supply commodity money but have instead shown a preference for flexible, state-issued fiat currencies." We didn't have much of a choice until recently. Your empirical evidence is only evidence that the state has been successful at violently suppressing competition. Bitcoin has proven resilient and so we now have empirical evidence to the contrary, to the tune of $70K/BTC at the moment.

Good article Mike! Do you see Bitcoin acting as a natural constraint for over lending or over printing of future fiat currencies? It seems to me that there could still be value in fiat currencies being used to facilitate transactions and creating liquidity, but Bitcoin being an outlet as a more reliable store of value would act as a natural constraint on this getting out of control as people would stop using the fiat currency if the lending and printing wasn’t reconciled to some extent to actual productivity gains

My read of your argument is: fiat currencies dominate because people actually prefer the stability (and other benefits) that only state-backed fiat currencies can afford. This makes sense. But I’m having a hard time with your conclusion that, due to those preferences, fiat currencies will dominate into the future. Why are you so confident the trend will continue? You don’t think it’s possible that people’s preferences could change over time as they accumulate direct experience with a viable alternative to fiat currencies? Or that their preferences (for economic stability, etc.) could be met by a decentralized technological solution rather than a centralized political one? I don’t necessarily disagree with you, I just found myself unconvinced by your argument on that particular point. What am I missing?