An @erikvoorhees banger from @Permissionless conference
So many powerful quips, just to call out one:
“For permission is what the kindergarten child attains to go to the bathroom… it is not what respectable men attains in his financial affairs… for if I may transact with you only by the good graces of those watching me from above, then I am something below”
Fucking right.
In Lyn Alden’s fantastic new book Broken Money, she talks about the natural arc of money towards increasing “hardness”. Any time there’s a new form of money — say, like rare pearls — the ingenuity and incentive of humanity is to find a way to “break” that money by, for instance, developing new ways to harvest and grow the oysters, or manufacture fake replicas, or travel far distances to collect more for less effort. In her (and others’) estimation, this is perhaps the primary reason gold has remained the hardest money for thousands of years. It still hasn’t been broken — but that could change in the future if, for example, we developed asteroid mining or found massive new gold mines.
Anyway, it got me thinking that perhaps new technology is what really drives the development of new money. Gold is an outlier, and we just haven’t yet developed the technology to enable cost-effective gold production or scalable asteroid mining.
The question I’m asking myself is something like — do powerful new technologies almost inevitably lead to the creation of new monies? I use the word “technology” in the broad sense, to quote one of my favorite simple definitions, “technology is anything that breaks a constraint”.
A brief and incomplete history of money follows:
Nature’s commodities eg, shells, teeth, shiny rocks – these required the (then novel) technologies of finding, harvesting, cleaning, storing
Metal coinage – the technologies of mining, smelting, minting, verification
Paper money – the technologies of paper making, writing, printing press (printing @ scale), counterfeit methods
Fiat money – the technologies of nation states (that could organize, distribute, and track it at great scale), distribution networks, telecommunications networks
Bitcoin / Ethereum – the technologies of the internet, cryptography, encryption, digital mining, distributed systems
All of these new monies were the products of new technologies, which both enabled their creation, while also rendering older forms of money either “broken” or inferior.
**On a somewhat related note, think about in-game currencies like Robux in Roblox. The game of Roblox is not a new general purpose technology, but rather an application of many technologies, yet it is cutting edge, and though Roblox the game doesn’t *require* Robux the money to function, it feels like a natural moving forward, in much the same way that humans evolved to prefer burgers and bagels though we could technically eat nuts and plants
Alright I’ve rambled enough. Just wanted to get some thoughts down on blog.
I ask the question because for me, the above conclusion implies that as powerful new technologies are developed, they may inevitably lead to the development of new kinds of money. On the horizon I see technologies like AI, VR / metaverse, bioengineering, and many others (known and unknown). And aliens, of course. Hopefully wise and peaceful ones.
🤔🤔🤔
Another fascinating glimpse into Satoshi’s thought process:
My choice for the number of coins and distribution schedule was an educated guess. It was a difficult choice, because once the network is going it’s locked in and we’re stuck with it. I wanted to pick something that would make prices similar to existing currencies, but without knowing the future, that’s very hard. I ended up picking something in the middle. If Bitcoin remains a small niche, it’ll be worth less per unit than existing currencies. If you imagine it being used for some fraction of world commerce, then there’s only going to be 21 million coins for the whole world, so it would be worth much more per unit.
Tuur’s last 2 (or 3?) reports have also come during bear markets, and he’s called his shots almost to perfection.
Original report: https://unchained.com/how-to-position-bitcoin-boom
I did a 7-minute-ish podcast deep dive: https://twodegens.buzzsprout.com/2073784/12901355-5-minute-crypto-deep-dive-on-tuur-demeester-s-bitcoin-report-adamant-unchained
And here were some of my favorite excerpts (all copied verbatim):
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During this accumulation phase, we expect for bitcoin to trade in a range of $22,000 to $42,000, until a new multi-year bull market pushes it well north of $120,000.
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Today is no different—we see extraordinarily strong fundamentals, robust and sustained technological progress, and an unparalleled level of conviction among long-time bitcoin investors, all ready to fuel a global buying spree and sustained new adoption.
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Investing in bitcoin, we believe, is like having the ability to buy shares of a general “Internet ETF” back in the early 1990s, or like being able to buy undeveloped land on Manhattan Island at the start of the Industrial Revolution—it’s the opportunity of a lifetime.
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On a multi-year timeframe, bitcoin correlates with very few global macro phenomena. A consistent exception seems to be changes in the fiat money supply: stimulus campaigns are positively correlated with bitcoin bull markets.
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For Europe, Latin America, Africa, Asia and Oceania, we believe the legal reality will vary greatly and we’ll see a growing polarization emerge: some countries will embrace bitcoin (see our section about nation state adoption), whereas others will actively try to discourage citizens from using or holding it.
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And finally, a new favorite quote:
“In investing, what is comfortable is rarely profitable.” – Robert Arnott
From Jesse Myers’ Substack about this week’s JP Morgan takeover of failing First Republic Bank.
All I can say is le sigh:
80% of losses on the assumed loans will be “shared” by the government, meaning they are funded ultimately by the taxpayer. Similarly, the $50B FDIC loan at an undisclosed fixed rate is risk borne ultimately by the taxpayer, in order to fatten the deal enough for JPMorgan to expect a 20% IRR on what would have been massively unattractive without taxpayer-funded incentives
Privatized gains, socialized losses. 2008, but bigger, and fewer people care. Homo domesticus.
The Fed prints $3T, oops we have 10% inflation.
Let’s fix this by rapidly jacking rates; oops, we have bank failures.
Let’s blame it on crypto and supply shocks and anything but our own self-serving incompetence.
Come on, people, just buy BTC and ETH and at least partially opt the f out!
Source: https://jessemyers.substack.com/p/651-may-2023-market-update-on-bitcoin