Oddbean new post about login | logout >“Just by refusing to participate in their system and redirecting our energy into Bitcoin, we’re creating a parallel economy, a system that naturally rewards those who opt in.” No, that is not enough. Starving the beast is not going to move us into the system that #Bitcoin could and *should* underpin. That’s going to create a power vacuum and nature abhors those - it **will** be filled. There is no such thing as a directionless economy. Economies exist through entrepreneurs taking signals and trying to capitalise on meeting market needs. We’re just used to living in economies where one giant central actor plans half of everything for all of us. Take them out and half the economy needs to be backfilled. That’s going to mean winners and losers. That’s going to see people become wealthy and others become destitute - such is the nature of free markets. If you want any sort of stability in such a system then you want to be the ones filling the power vacuum, not letting the very same parasites who have been dethroned back in to power. That means directing what power there is and what it can do, no different to what the Church used to do in Europe. In the long run there is no world (other than either 2199 Matrix shit) where our parallel economy peacefully coexists with the fiat status quo.
I agree a parallel economy, in the narrow sense, is not enough. I see developing and negotiating decentralised protocols to replace centralised statist monopoly functions as the key preparation we can make here. "Shadow self-governance", by analogy with revolutionary shadow governments. Yes, that's a gargantuan undertaking, but a lot of good work we can re-use has already been done by people who lived outside the grasp of a modern state.
Shadow self-governance is a good way to frame it, albeit that’s probably a better description for where it’s headed than how we get there. We need to Elmer Fudd this shit and think like the rabbits. Telling the midwits they’re going to have to govern themselves will scare the shit out of them and would be easily capitalised upon by incumbent parasites to sow FUD. That might be the reality but it’s not how the war will be won. But both need the mindshare - how does it work in practice and how does the transition happen because they’re distinct things as any revolution from history can teach us.
I think its safe to say the transition will be ugly, disorderly and involve both bangs and whimpers. "Slowly then suddenly" applies to institutional bankruptcy as well as personal bankruptcy. Civilised mid-wits will panic if dumped head-first into freedom, true, but that's why we need decentralised protocols NOW as institution replacements, so that the midwits have many points of contact with systems that work even before other systems finally fail. Bitcoin is one. Nostr is another. Mesh networks. Have given thought to "aostr", "arbitration and other stuff transmitted via relays", but need to write a lot more notes and some code proof of concept.
Protocols don’t replace people. When it comes to money and an economic system, we want that out of the hands of people. When it comes to how society is organised and the socio-political system, that **will** remain in the hands of people until/if AGI happens. Economics can exist in a machine only world as a means of allocating resources, but there is no society without people. The institutions which govern what is acceptable in society are still going to need to be replaced/changed. People are not going to for example stop needing massive water treatment systems just because the government can’t insert themselves into the money flow. Humans still need that, and even if we want the free market to deliver solutions the reality is the current systems need to be picked up or else they’ll be co-opted and used against us or outright fail which will also be used against us. How long does it take for a parallel system to establish water governance at a population level? I have no idea, but I know it needs people to put their heads together to figure out options and what the tradeoffs are and how we might propose to handle such a thing and whilst I see shitloads of talk about crab markets and how incumbent parasitic systems are treating our economy, I see next to none about how we subsume water mgmt and all the other shit that is going to need to be transitioned roughly or smoothly into a new system. Protocols will form the backbone but they only matter if there are people to “organise”. What form and depth that organisation takes is up for grabs in a new system but rather than simply dream about it, I’m trying to be the change I want to see and start talking about it with people who understand the very real possibility of being thrust into a role as new economic elites when we’ve got excellent brains and plenty of money but none of the organisation capacity needed to succeed.
I understand the concern about a power vacuum—when a centralized authority collapses or loses control, something must inevitably take its place. But I still argue that the best solution lies in a decentralized model, one where the individual, not a new elite, is empowered. The power vacuum that follows the fall of fiat is real, but it doesn’t have to be filled by a new, organized counter-elite. Rather, Bitcoin allows for a distributed network of entrepreneurs, innovators, and market participants to fill that gap organically. Yes, free markets have winners and losers, but the strength of Bitcoin is that it doesn’t centralize the winners into a new oligarchy. It’s anti-fragile and resists co-option by elites due to its open, transparent, and trustless nature. You mentioned how economies depend on entrepreneurs responding to signals. That’s true, but Bitcoin’s decentralization means those signals aren’t coming from a central planner or a handful of elites, but from the network’s participants. The system self-corrects and evolves, with power and influence diffused across many, rather than concentrated in a few. The parallel economy we’re building isn’t meant to peacefully coexist with fiat forever. It’s a hedge and a challenge to it. Eventually, Bitcoin’s robustness should outcompete fiat not through centralized control but by being the more efficient and fair system. The “direction” of the economy, then, becomes a collective one, steered by the millions of individuals who opt into Bitcoin rather than one group seizing power. Bitcoin is about resisting the need for an elite to steer the ship. We avoid letting the same parasites back in by making sure that no one has the concentrated power to steer the economy unilaterally—only the collective choices of the participants do. That’s how we ensure the old system doesn't regain control: by creating one that doesn't allow control by anyone.
>”But I still argue that the best solution lies in a decentralized model, one where the individual, not a new elite, is empowered.” I’m not arguing against that at all. Ancaps don’t dispute natural hierarchies, Auth-anything’s certainly don’t either - only AnComs are stupid enough to believe in leaderless utopias. Because we see these form regardless of superstructure; it’s human nature to have leaders. I too would like that superstructure to be decentralised. I too would like the new elite to be more figureheads than actually be empowered. None of that is counter to my argument, it’s just a shallow understanding on your part of how humans organise societies. How powerful the new elite class turns out to be is within our power to control, because Bitcoiners will own the means of production at the outset of the system. We can be the ones to set the rules in motion. Turning a blind eye and pretending we’re going to turn into an entirely meritorious homogeneous blob of humans is to ignore all of history and every system which has ever been. It’s just not how things work in reality so rather than leave everything to random chance I’d say it’s better to be the ones with the guiding hand over the levers of control than leave it to chance.