The Bitcoin Standard

[philostam]

The Engineering of Bitcoin
​

Was looking into bitcoin this past few months and it blew my mind. I am now convinced it’s gonna suck in more and more wealth and become the apex property of mankind.

It is never gonna be a high frequency medium of exchange, and it doesn’t need to be. It is a low frequency store of value, and that’s all we need from it. I don’t need bitcoin to pay for coffee, nor do I want to spend appreciating asset on such a trivial purchase. I have fiat money for that, inflating at at least 10% a year.

Bitcoin is not a currency, it’s a commodity. That’s also how SEC treats it. Bitcoin is harder than gold which is harder then silver. Just like steel is harder than iron which is harden then bronze.

As far as price goes, I am sure one bitcoin will go to $100,000 in a few months, probably cca $400,000 by 2025 and cca $1,000,000 till end of the decade. There will obviously be fluctuations along the way (profit taking etc.) but generally speaking it’s gonna continue to trend up with time at a decreasing pace (due to higher and higher market cap). As far as there is worldwide gdp growth, adoption growth and expansionary monetary policy growth, Bitcoin is gonna go up.

Buying bitcoin is like buying land in Cyber Manhattan. Soon enough, everyone will want to live in it. Only that Bitcoin is more scarce than land or any other commodity.

Bitcoin is first fully decentralized and perfectly engineered monetary system. Gold was used as money for most of the human history due to its technological features, but it has many flaws. Bitcoin, on the other hand, is a faster, smarter, harder technology. Bitcoin is the first thermodynamically correct monetary system – it’s a closed system with no leak, meaning energy cannot leave, it can be only heated up. Bitcoin is a battery that doesn’t drain over time. It also cannot be monopolized by governments, like gold has.

It’s very hard to predict new technology. However, once you reach the growth phase of a new technology, it’s even harder to stop. Think of internet in 1997 or smartphones in 2010. This is where bitcoin is now. It reached over trillion USD in market cap, which is no joke. Market is taking it seriously, and it takes companies that are selling their debts and equity to purchase bitcoin seriously.

As Leonardo da Vinci said: “There are three classes of people: those who see, those who see when they are shown, and those who do not see.”

 

[philostam]

The Demographics of Bitcoin​

Bitcoin and cryptocurrencies are the fourth-turning and the wealth transfer from Boomers to Millennials. Baby Boomers’ wealth is tied in housing, Millennials’ wealth will be tied in Bitcoin and digital assets. We shouldn’t need to use a house as a savings account anymore. That’s not the purpose of housing.

Investing into real estate will become less and less lucrative over time. What is a definition of a good asset? Well, one is this: something that a richer person than you will want to buy from you. Unless you own a penthouse in Tokyo, New York, London etc., Bitcoin is a better asset than 99% of housing. There will only ever be 21 million Bitcoins, and there is too much millionaires in a world for each to get one. In fact, if you own one Bitcoin today, you are in group of only 800k people or so (because majority of people own less than one Bitcoin), and that number is only gonna get smaller over time.

People without assets were getting screwed over the last 30 years. Currencies in the developed world are debasing 5% a year in normal times, and 15-20% in Covid times. That means that in real terms, people are getting poorer (unless you own assets which were also appreciating). And demographics are showing this. Demographics are the truth. Millennials and Gen Z are having way less kids than Boomers – kids are simply too expensive for millennials.

Millennials are not interested in keeping up with inflation, which is what you get with investing into stock indexes. This is OK for defending wealth, but millennials have no wealth to defend (excluding the top percent of super achievers).

Bitcoin and cryptocurrencies are the life raft for millennials.

 

[philostam]

 

[Work]

But isn't currency conceptually an issuance of government in order for it to collect taxes?

 

[philostam]

But isn't currency conceptually an issuance of government in order for it to collect taxes?

Bitcoin is not a currency, it's a treasury reserve asset.

Bitcoin is replacing gold, bonds, real estate. Well, not replacing, but sucking in part of the cash that use to go there. Bitcoin doesn't need or want to replace the dollar or the euro.

Bitcoin is essentially de-materializing property. We de-materialized books, music, education...now we are de-materializing property.

 

[Pin]

I think it's a bubble.

 

[philostam]

I think it's a bubble.

It's not a bubble. Or better else, everything is in a bubble. Real estate, stocks, Bitcoin...Why is that?

It's a denominator problem. Everything looks super over-valued in dollar terms, but that is only because the dollar (the denominator) is losing value. Simple math.

Bitcoin's market cap is cca 1 trillion, gold's is > 10 trillion and global bond market is > 200 trillion. Bitcoin is super cheap.

In the end, everyone buys Bitcoin at the price they deserve.

 

[Matty]

When all currencies are digital, it would take but a stroke of a pen, to completely ban all trade in Bitcoin. You might be able to exchange some for consumable goods with the occasional nerd after-seller, but there is absolutely nothing guaranteeing it's exchange, nor its desirability.

 

[Jexocuha]

I felt like sharing this, if anyone hasn't read it. Satoshi Nakamoto laid it all out very nice and clearly with "Bitcoin: A Peer-to-Peer Electronic Cash System"

 

[philostam]

I felt like sharing this, if anyone hasn't read it. Satoshi Nakamoto laid it all out very nice and clearly with "Bitcoin: A Peer-to-Peer Electronic Cash System"

Iconic.

Beautifully simple monetary policy too:

 

[INFJay]

It's about being diverse. The future holds big upsides for several classes in all fairness, along with lots of fireworks and a roller coaster ride for crypto vs governments etc.

I'd put bullion over crypto though in the grand scheme of shady control that goes on in the shadows of normality.

 

[Enso]

Lol, been in the crypto space since $45 bitcoin.
First of all I don't want to come of as a pessimist but this is how I see it:

1. Bitcoin is great in theory but it is heavily manipulated and will be for the foreseeable future as the largest owners of btc (miners/ early owners of bitcoin) are working together to get even more filthy rich. They have been doing this for ages, the first bitcoin fork was a good example of a pump and dump and they continue to do these behaviours. It is no doubt the most insanely beautiful invention of the 21st century but its being controlled by a bunch of assholes. Feel free to marvel at it from a theoretical standpoint just listen to Andreas Antonopoulos and he will have you praying 3 times a day to this beautiful theoretical invention.
2. 95% of all the other cryptos are rubbish
3. Do not underestimate your government (whatever country) they will regulate the living shit out of it.
4. The latest crypto/Dapp/Decentralized projects are all slowly becoming more and more sketchy adding additional fees and hoops (particularly hoops) to make things overcomplicated and confusing for no particular reason - coz Innovation bruh.
5. The whole "bitcoin will be x $ by x time" is absolute delusion do not underestimate this - I've been through it since $45 btc - it simply never happens and is all market manipulation and hype.
6. If you want practical examples of market manipulation just do any research into tether, they use it to pump and dump the market with what is most likely non-existent funds of a fractional reserve system EXACTLY like what we have.
7. This is just the nature of ANYTHING related to money it is always mankind's vice, at this point in time crypto has not made a dent in that aspect of human nature.

It's absolutely the greatest invention in modern mankind.....in theory.

 

[philostam]

Lol, been in the crypto space since $45 bitcoin.
First of all I don't want to come of as a pessimist but this is how I see it:

1. Bitcoin is great in theory but it is heavily manipulated and will be for the foreseeable future as the largest owners of btc (miners/ early owners of bitcoin) are working together to get even more filthy rich. They have been doing this for ages, the first bitcoin fork was a good example of a pump and dump and they continue to do these behaviours. It is no doubt the most insanely beautiful invention of the 21st century but its being controlled by a bunch of assholes. Feel free to marvel at it from a theoretical standpoint just listen to Andreas Antonopoulos and he will have you praying 3 times a day to this beautiful theoretical invention.
2. 95% of all the other cryptos are rubbish
3. Do not underestimate your government (whatever country) they will regulate the living shit out of it.
4. The latest crypto/Dapp/Decentralized projects are all slowly becoming more and more sketchy adding additional fees and hoops (particularly hoops) to make things overcomplicated and confusing for no particular reason - coz Innovation bruh.
5. The whole "bitcoin will be x $ by x time" is absolute delusion do not underestimate this - I've been through it since $45 btc - it simply never happens and is all market manipulation and hype.
6. If you want practical examples of market manipulation just do any research into tether, they use it to pump and dump the market with what is most likely non-existent funds of a fractional reserve system EXACTLY like what we have.
7. This is just the nature of ANYTHING related to money it is always mankind's vice, at this point in time crypto has not made a dent in that aspect of human nature.

It's absolutely the greatest invention in modern mankind.....in theory.

Point 1 might be true, although crypto market is still way less manipulated than legacy markets. It's harder to get insider info on Bitcoin than in equities, for example. Distribution of Bitcoin is still quite healthy. Compare this to fiat world, where 1% of people hold 99% of wealth.

I would agree that other crypto assets are not so impressive in technology sense - but there is great retail demand for them for the before mentioned reasons. Millennials are simply not interested in steady 10% gains in equity markets anymore. Also because Bitcoin looks so expensive, many people go straight to alts. Bitcoin is great, but I agree it's strongly biased towards early adopters/investors, which isn't fair. That's why we have alts.

Point 6. Tether is a boring story that resurfaces every few months. There is nothing there. Like China re-banning crypto every few months.

Point 5. So you've been here since $45, now we are at $50k, and yet you are saying that price predictions never come true? Are you not satisfied with your 1000x ROI? (if you held all this time).

You do you, I see it differently. I've been in the space only cca 10 months and it's been life changing on many levels already.

 

[Enso]

Point 1 might be true, although crypto market is still way less manipulated than legacy markets. It's harder to get insider info on Bitcoin than in equities, for example. Distribution of Bitcoin is still quite healthy. Compare this to fiat world, where 1% of people hold 99% of wealth.

You do you, I see it differently. I've been in the space only cca 10 months and it's been life changing on many levels already.

Yah fair enough maybe I'm projecting my own bullshit onto it, I guess I would say that over the many years of my involvement with crypto I learnt more about myself than money and all I really wanted was a dream of a utopian society and money etc etc. Bitcoin offers all those pipedreams for many hence the "OMG bitcoin will be 1 million dollars in 1 year" stuff is just massive ego feed. Max keiser is good for that one, while he is an absolute nutcase he is very smart with bitcoin and understands it is valuable, but he isn't god (if there is one), he doesn't know what brand of toothpaste he will buy at the store let alone where bitcoin will be in 1 year. A good parallel would be electric cars, they were made as far back as 1992 I believe and it took like 20 years to become big. However, what they were now and what they were then are two complexly different things. Elon musk wants you on his payment plan so your infinitely in debt to his replacement bumper range or his firmware updates. You just gotta stay planted in reality with this stuff and perhaps maybe that's just my bullshit.

 

[Matty]

Crypto is just a boring topic. Basically gamblers pretending they're not gambling by calling bets "investments".

Frankly, the conspiracy theories about it are more interesting. My favourite is that the Bitcoin inventor, Satoshi Nakamoto is actually an artificial intelligence, using people's greed to supply it with disgraceful amounts of computing power and electricity.

 

[Enso]

Crypto is just a boring topic. Basically gamblers pretending they're not gambling by calling bets "investments".

Frankly, the conspiracy theories about it are more interesting. My favourite is that the Bitcoin inventor, Satoshi Nakamoto is actually an artificial intelligence, using people's greed to supply it with disgraceful amounts of computing power and electricity.

The conventional monetary system is the king of greed hands down. There have been some tangible theories, one about different agencies super computer power usage increasing. It's argued that when they are not using them for anything useful they are accumulating BTC. Makes sense. On the subject of AI, if your into that kind of stuff, a guy called Terrence McKenna back before the internet was a thing predicted memes. He was an advocate of plant based medicine ie Magic Mushrooms, Psilocybin etc. He was the original Joe Rogan "Whoooa DMT". There's an ongoing thing about Machine Elves that he encountered whilst being on a concoction of drugs, but he lectured about how mankind would evolve, and his arguments were next level, they were loosely based on fact. Pop culture has stolen a lot of his stuff for movies, he had a working model of time travel and something called the "grandfather paradox" I think it was named - The writers of Inception stole it. Anyway, one of his lectures on youtube he talked about how mankind would get off this planet, and his logical conclusion back in the 80s was that we were probably merge with computers in order to travel the galaxy. - A bit off-topic but I love all his yt videos so I can't help but mention him.

 

[Jexocuha]

a guy called Terrence McKenna back before the internet was a thing predicted memes.

Yes! So glad you brought up McKenna. If I remember correctly, he was talking about memes, fiber optic internet, and video-based communication[today would be called sharing cellphone videos] since back in the early 1990s. He wrote extensively on the benefits of Psilocybin as a serious medicine; and, something I can personally attest to, the benefits of phenethylamines for treating severe depression. Yeah, he was well ahead of his time(and an INFJ, not to mention...)

 

[aeon]

a guy called Terrence McKenna

Big fan here, own and have read his books, had the pleasure of meeting him once, and absolutely the most gifted off-the-cuff speaker I have ever heard in person.

Experienced the elves* who built luminous cathedrals of non-euclidean geometry because of him. Thanks, bud, we’ll meet again just before the concrescence.

*

Spoiler: they

Cheers,
Ian

 

[Enso]

Big fan here, own and have read his books, had the pleasure of meeting him once, and absolutely the most gifted off-the-cuff speaker I have ever heard in person

I am very jealous that you got to met him. Having said that, If I was ever standing in front of him I don't know that I would know what to say, my intuition and imagination peaks listening to him but my actual knowledge is incredibly limited. I would be like a 16 y/o girl at a Justin Beiber concert, all admiration and no brains.

 

[aeon]

I am very jealous that you got to met him. Having said that, If I was ever standing in front of him I don't know that I would know what to say, my intuition and imagination peaks listening to him but my actual knowledge is incredibly limited. I would be like a 16 y/o girl at a Justin Beiber concert, all admiration and no brains.

I can appreciate all of what you say here because I was no different. That said, his ability to know where I was, and meet me there such that his engagement was understandable, and that I also felt heard and understood, allowed him to guide me in the discussion to things that I already knew, but had never realized a contextual relationship existed between.

Also, his voice was so calming. I did not feel anxious to be in his presence whatsoever. His cadence, and the melodious rise and fall present in his speech was mesmerizing. I mean that my experience was like he was changing the flow of thought in my head as if he had cast a spell.

I know that sounds ridiculous, and it’s even ridiculous to me when I read it back, but I have ADHD, which was undiagnosed and untreated at the time. My usual state of mind was one that raced, and it sounded like nine poorly-tuned, staticy radios playing at once, all overlaid with a fog, or a haze, all of the time. Listening to him, my mind was quiet and clear. I have no explanation for that, and these days achieving that requires the use of prescribed dextroamphetamine sulfate.

If you are unfamiliar with this, enjoy.

Cheers,
Ian