Thread by @jimmysong

1/ In every form of money, there are two ways to make money:

1. Create more of the money
2. Create a good or service that people want

2/ Creating money does not add to society, creating goods and services does.

With Gold, for example, gold mining is really expensive and not that much effort is expended on it. With USD, lots of people are in banking because they essentially get to benefit from money printing.

3/ In bitcoin, you have the same dynamics as gold. It's very expensive to get into Bitcoin mining. You would think this would lead to a lot more people trying to provide goods and services people want.

4/ Instead, what's happened is that there are still lots of people that want to be "money creators" without the expense of mining. What do they do? They create altcoins, ICOs or token sales. They want to become the centralized version of Bitcoin. They aim to be sound money.

5/ This has skewed the BTC economy. Instead of lots of goods and service creators, there's a whole host of people trying to remake BTC so they can win in some smaller domain. They're aiming to become the central bank for a new currency and get all the benefits of doing so.

6/ Note this has been there from almost the beginning. 2011 saw altcoins do this. 2013 saw the first token sales. 2017 saw an explosion of ICOs. They all want to get rich by controlling the money supply without doing any real work.

7/ This is rent seeking at its purest. What's worse is that there's a conflation between these tokens an BTC. Centralized money and Decentralized sound money. They shouldn't be conflated. They're really, really different yet are placed in the same general category: cryptocurrency

8/ What's really sad is that there is a lot of wasted effort due to greed. In a sense, the current downtrend needs to continue so greed isn't rewarded. Real work building stuff that people actually use is what we need. /fin