0/22. A thread summarizing my recently published essay “An Open Letter to Ray Dalio re: Bitcoin” which explains the nature of money, markets, and Bitcoin through the framework of @RayDalio’s Principles.
medium.com/@breedlove22/a…
Let's begin⏬
medium.com/@breedlove22/a…
Let's begin⏬
1/22. At the pinnacle of Ray’s worldview is the cultural paradigm he originated at Bridgewater — the idea meritocracy; its formulaic elements are Radical Truth + Radical Transparency + Believability-Weighted Decision Making.
2/22. An idea meritocracy is essentially a free market for ideas; an open culture for the proliferation and combination of the most meritorious ideas, free from man-made impediments such as ego, policy, and hierarchy.
Ray gets an F on his Bitcoin views:
Ray gets an F on his Bitcoin views:
3/22. Radical Truth, the 1st element of Ray’s cultural paradigm, is centered on the belief that an accurate understanding of reality is essential for any good outcome. In free markets, price is truth; lacking any centralized control, free markets are coordinated by price signals.
4/22. A price signal is a data packet on value and scarcity; it converts countless economic complexities into simplicity by compressing myriad market realities down into a single, actionable variable — the market price. 
5/22. Central banking distorts the truthfulness of price signals by inhibiting natural price (interest rate) discovery processes in the market for money and all markets it touches; and money touches every market. Distorted price signals cause the boom-and-bust business cycle.
6/22. Bitcoin is a monetary channel free from the noise of unexpected supply fluctuations, which necessarily means it carries the clearest price signals making it the perfect conveyor of these data packets on value and scarcity.
7/22. Radical Transparency, the 2nd element of Ray’s cultural paradigm, means “giving most everyone the ability to see most everything”. Capitalism is based on rules, and for entrepreneurs to execute effectively, these rules must be reliably unchangeable.
8/22. Central banking, an un-auditable institution, “bends the rules” in its favor by violating private property rights through inflation and, in doing so, compromises the soundness of the monetary medium through which price signals are conveyed.
9/22. Bitcoin’s money supply is becoming the most trusted in the world as it is fully transparent and unchangeable. Bitcoin runs countervailing to central bank monetary policy which is uncertain, opaque, and subject to change based on bureaucratic whim.
10/22. Believability-Weighted Decision Making, the 3rd element of Ray’s cultural paradigm, is a function of people’s “capabilities and their willingness to say what they think”. When it comes to money, track records matter, and central bankers could hardly be less believable.
11/22. The unbelievability of central bankers is a direct consequence of their lacking “skin in the game”. All users of Bitcoin, on the other hand, have skin in the game and therefore make the system a more believable money.
12/22. Per these arguments, Bitcoin embodies the qualities of both an idea meritocracy and its overarching structure, the free market, making in consistent with Ray’s worldview (even though he doesn’t realize it yet); it is also aligned with several other Principles of Ray's...
13/22. The Principle of Open-Mindedness is embodied in open-source technologies that are open to inspection, modification, and enhancement by design; openness like this makes tools more trustworthy. Fiat currency is a closed-source technology losing to open-source Bitcoin.
14/22.The Principle of Faith in Nature is centered on the trust that nature is smarter than any individual and always optimizes for the whole. Free markets are operations of nature that promoted natural money, gold, and are now promoting Bitcoin—a money encoded in mathematics.
15/22.The Principle of Cause-Effect Chains is a belief that “everything comes about because of cause-effect relationships that repeat over time”. Centralized control over money supplies has always caused a growing wealth disparity; Bitcoin is eliminating the Cantillon Effect.
16/22.The Principle of Evolution is the conviction that “evolution is the only thing that is permanent and drives everything”. Using a Darwinian analogy: what natural selection is to Bitcoin, artificial selection is to fiat currency.
17/22. The Principle of Timelessness is a perspective that current events often rhyme with history, “another one of those” as Ray calls them. In this sense, Bitcoin is “another gold” monetizing in real time based on its stock-to-flow ratio.
digitalik.net/btc/
digitalik.net/btc/
18/22.The Principle of Meaningful Work is a desired outcome from employing an idea-meritocratic approach to life and work; in a central bank dominated world, there has been a shift away from value-additive to value-subtractive business models and roles.
19/22.The Principle of Meaningful Relationships states that harmonious relations are rewarding. The 21st century was uncoincidentally marred by more conflict-deaths than the prior four centuries due to inflation war-financing; Bitcoin breaks the war machine’s funding mechanism.
20/22.By incinerating the opacity of central banking with the light of pure transparency, drowning the lies inherent to fiat currency in a ceaseless flow of indisputable truth (a new block every 10 minutes), and like the free people whose sovereignty it is reinvigorating…
21/22. Bitcoin is swelling into a great social force that is, to use the words of the late great Georgi V. Plekhanov: “Bursting on Cunning Falsehood, Like a Storm of Wrath Divine.”
22/22. Bitcoin is the first social institution in history with the potential to subvert the greatest man-made scourge humanity has ever faced — the infamous wealth-extracting, disparity-driving, and warfare-financing duopoly of monopolists: governments and central banks.
