Oddbean new post about login | logout Correct about the king holding 100% but don't worry about it because things will go South long before that. The difference between the king holding 50% and holding 95% doesn't matter, 10 times the amount of an abstract unit is still an abstract unit. It's like feet vs. meters. The change in the unit matters though. With the king accumulating gold, or Saylor accumulating Bitcoin or tech companies accumulating dollars, money is withdrawn from circulation and everyone has to recalibrate their yard stick a.k.a. prices. This causes confusion in the system and interrupts the flow of goods and services. You can literally starve with all the grain in the fields. Just ask dimwits like @semisol or @jb55 who are losing customers because of a recent recalibration of the ratio of money supply to services offered. They could have asked those questions beforehand but hey despair can be overwhelming and impact your reasoning.
> starve with all the grain in the fields I find it weird how it could come to that much specialization. So that now everybody wants to participate in the capitalist arms race where something seems to come from nothing. Everbody investing and hedging until they realize that nothing grew. But please elaborate about jb55 and Semisol. What‘s there?
jb55 and Semisol are attempting to offer services priced in Bitcoin, and also keep the price in Bitcoin stable. Further more, these services are somewhat "buy ahead", where you pay now and receive the service later, sometimes even a year later. That's fair enough, like newspapers will give you a sometimes massive discount if you subscribe for a year ahead because having that money allows them to plan ahead, it's some financial security. But recently the value of Bitcoin has been going up, and that's been creating the expectation that it'll go up even more. Nothing wrong with that either, if the economy of Bitcoin-priced services is growing against a largely constant money supply that's a fair expectation. But now you have the deflation trap. jb55's customers were happy to subscribe last month for $5 equivalent but now it's $10 equivalent and they consider dropping. Semisol would like customers to pay $50 equivalent in advance now for next year's service, but this amount of Bitcoin might be worth $100 or $500 next year, so why spend it now? Better to keep it and spend it next year and get so much more for it. Small-time Bitcoiners are typically financially stable enough from fiat income that they can afford to just buy Bitcoin and keep it the same way that they could spend it on collecting Beanie Babies to put on a shelf if they wanted to. They don't need to spend it on food or other urgent stuff. So they don't spend. You don't get an economy going like that.
> But now you have the deflation trap. jb55's customers were happy to subscribe last month for $5 equivalent but now it's $10 equivalent and they consider dropping. Isn't that premise true as well for any whiling-to-be bitcoin company out there? Midwit me would think about asking for lesser sats as to 'pegging' the service to $5...
Absolutely correct. No Bitcoin company is viable and never will be. As for pegging the Bitcoin price to a dollar value, you don't have a reliable income stream in Bitcoin then. A Bitcoin company is only a Bitcoin company if it earns in Bitcoin and holds it to pay suppliers in Bitcoin later. Pay and be paid, money goes in circles. However as a business you need to have a somewhat reliable, predictable income stream. If the electricity bill is due in 3 months will you have earned enough to pay it? Like that. You don't have to be a "business", every regular employed Joe has to plan like that. If you constantly adjust your Bitcoin price to whatever the dollar value demands you can't predict your Bitcoin income well enough. The only option you have then is to immediately convert it to dollars on reception and pay your suppliers in dollar. But then you're not a Bitcoin business anymore. You're just a dollar business that pretends to be a Bitcoin business as a marketing gimmick. You will hold dollars instead and then it's back to worrying about the stability of the dollar which you wanted to avoid in the first place. 99% of so-called Bitcoin businesses are that. It's make-believe to suck the money out of a few starry eyed and not so clever Bitcoin dreamers. That's why I keep asking questions like that and usually not getting an answer because the answer would be rather ugly: nostr:note1r0fgd862ykhzu8qtpvqsyxge8fwlegdnt6uwx45hyvwftj3s5s7spux5ad
Would there be any viable subscription model wherein the product or service offered could be purchased ahead of time using a payment method which has fluctuating value? Would the early adopters need to be offered a refund or an invoice for additional required payment based on the payment method’s value as time passes?
Possibly a credit system. At the end of the year you get credit back or credit for future usage.
The possibility of refunds or invoices creates financial risk on one side or the other which is what we wanted to avoid in the first place. The only way you can financially plan ahead is with a stable currency, the more stable the better. Bitcoin is fundamentally unable to achieve that, the best we have today is central bank fiat from civilized countries. If you want to design your own possibly "more digital" finance scheme you'd have to design it "stability first".
> Bitcoin is fundamentally unable to achieve that, the best we have today is central bank fiat from civilized countries Would you have a take about El Salvador disclosing and moving to a physical location within its territory the keys of its bitcoin? (https://mempool.space/address/32ixEdVJWo3kmvJGMTZq5jAQVZZeuwnqzo). Something alike, `El Salvador has X amount of bitcoin, and also has X amount of land, and people, so its value should be...'. What I'm meaning is, isn't valuation also a challenge fiat central banks has? although I do get central banks go from 0 to infinity to start measuring, whereas bitcoin starts from a point (21 million) and goes towards 0
Yes absolutely, central banks need to measure the size of the economy and adjust the amount of money in circulation accordingly. They do a so-so job, as we can see now they exceed their inflation targets, not good, I have some ideas there how to improve this and it only works for an economy of skilled people. But at least they have some mechanisms for adjusting the amount of money in circulation, mostly through adjusting the interest rate on money lent into existence. And, mind you, the economy constantly changes, it shrinks and grows, so the money has to be constantly adjusted. In the past the economy has mostly been growing so the question is just by how much, but sometimes there are recessions or at least the threat of a recession as during COVID. With Bitcoin there is no mechanism to adjust the amount in circulation. The amount will be constantly out of balance with the size of the Bitcoin economy, if there was ever to be one. Of course Bitcoin is so bad at stability that any attempt by even just one or a few businesses to trade in Bitcoin will immediately fail and the businesses will revert to fiat or die. It's kind of like the Ebola virus which kills its victims so hard and fast that they barely have any chance to spread it so any Ebola outbreak naturally comes to a quick end.
I'd put this issue, then, in the pre-judgement of economy: a bitcoin company is a company within a bitcoin economical system, a bitcoin company is not a bitcoin company within a fiat economical system. As in the only sense of having to displace between both systems are for the guarantee of achieving extra problems to solve. What may be interesting is the suggestion towards the establishment of bitcoin economical systems (circular economies as I get them). So far Will (and any other entrepreneur) might be using both systems (bitcoin and fiat) as a lack of a better way to accurately weight the costs of the product (s)he's trying to sell, in accordance with the style of living each one could have (food, place, swag, etc.). If living can be measured in bitcoin solely, then whatever company within this custom can be a true bitcoin company.
Not sure I can follow all of this including metaphors but you will never be able to use Bitcoin to measure ("weigh") costs of products or cost of living because Bitcoin's supply doesn't change in accordance with a changing Bitcoin economy. > the capitalist arms race where something seems to come from nothing
The bugs in our system that let some live at other people's expenses (it doesn't come from nothing, the paths are just too convoluted to identify the victims) are very appealing so everyone's pining for it.
Not everyone equally though don't be mistaken. A lot of people, myself included, aren't content with "making a living" and devoting any surplus time and energy to creativity, honing skills, self-realization and the like.
The aggressively capitalistic ones ("look! got me another investment property!!") are usually those that, according to their own self assessment, can't compete on talent and skill and are therefore feeling perennially insecure and desperate.
This includes most Bitcoiners, who, other than Bitcoin, have nothing to talk about. The skilled people, in the other hand, will talk your ear off about their latest creation and what have you. You can usually tell the one from the other in about 30 seconds of conversation only. About "too much specialization". Joseph Tainter has a book on the Collapse of Civilizations. It's hard to deduce, from the rubble of say the Roman Empire or Easter Island, what made them fail but his theory is that there is a recurring theme of too much specialization so you're possibly onto something there.
FYI some customer testimonials from @jb55 's and @semisol 's businesses. nostr:note13zrcuqcjzzmwa9w6f96eu4m6f0tqwgtp8erkputaqdr95rt64n4qrqzaze nostr:note1kexz0j5ksxxu3ggtpvkr92wkjs06u7r2mzzfhg2g03k765z0xz3q85ntqc