1/ **A World Without Bitcoin**

What would the future look like if Satoshi had never invented decentralized digital scarcity?

If we didn't have open-source, non-discriminatory money beyond the control of corps and govts?

Here's a sci-fi look into that parallel universe 🧵:
2/ The year is 2040, and cash is gone. The money you use on a daily basis has fully transitioned into a tool of surveillance and control.

In midtown Manhattan, you tip sidewalk performers with a scan of your wearable, your face, or your fingerprint.
3/ Coins and dollar bills are now curiosities—fossils from a forgotten age.

In Beijing, the government-issued Yuan has long since been digitized into the ubiquitous DCEP.
4/ Holding old paper notes is illegal, all payments are touchless or biometric, and all transactions are natively linked to your full identification stack.

Every time you buy something, your national digital profile simultaneously updates.
5/ Transaction privacy was one of the last freedoms to be stripped away in China.

Now, your communications, movements, and interactions with other citizens are tracked with billions of cameras...
6/ real-time surveillance streaming from your wearables, swarms of micro-drone recorders, and immensely powerful algorithms, linking everything together in a panopticon.
7/ In Caracas, Venezuela, the recovering economy runs on digital dollars. There is some street bartering, of course, but greenbacks finally became obsolete a few years ago, and other bearer assets like gold remain incredibly rare.
8/ If you want to buy something, you have to do it electronically and the transaction will be tracked and linked to your citizen profile.
9/ In Lagos, like in many African capitals, all commerce is carried out on the rails of Chinese fintech, and everyone communicates seamlessly with the latest version of WeChat.
10/ The Nigerian economy runs on DCEP and the government and its 300 million citizens basically act as a Chinese satellite state.
11/ At some point in the 2030s, governments around the world made cash illegal.

They initially accomplished this feat through a demonetization process where public officials announced a new digital economy...
12/ that they claimed would not leave anyone behind, would increase stability, and would make it easy to catch criminals and money launderers.

Most citizens believed them.
13/ Even in countries where the majority never had a brick-and-mortar bank account, all citizens were encouraged, then forced, to create ID-linked digital currency accounts accessible through their wearables or biometrics.
14/ Then, they were given a multi-year time window during which they could redeem their cash for a shrinking amount of digital credits. Almost everyone cashed in and went fully digital early on, when they could get the most credits.
15/ After the window expired, it became a punishable offense to carry paper or metal money.

Now, in 2040, there are two dominant currencies in the world: the digital dollar and China’s DCEP.
16/ The world is roughly divided: North America, Europe, and some top U.S. allies use the digital dollar, while the rest of the world uses DCEP. Very few other currencies remain.
17/ Some rogue states still produce their own currencies, but these don’t last long and aren’t worth much to anyone else. These regimes tend to inflate their money supply extremely quickly, severely devaluing their currency...
18/ eventually forcing authorities to create new currencies.

This cycle destroys trust between state and citizen. Eventually, such governments give up sovereignty in exchange for survival and turn to the digital dollar or DCEP.
19/ The common person effectively has no ability to store savings in a way that isn’t controlled by either the American or Chinese government.
20/ There hasn’t been any meaningful innovation in savings technology.

Most citizens simply just save up their digital credits, but the value of their credits depreciates against real goods relatively quickly.

And then there is autotaxing.
21/ By now, taxes are automatically deducted from your credit balance and tax rates rise unpredictably and always, it seems, too fast. As in previous decades, some poor and middle class citizens still buy things like cattle or sheet metal in an effort to save against inflation...
22/ but all (save the 1%) are locked out of premium assets like real estate, fine art, vintage wine, and other scarce items.

Financial privacy has virtually disappeared, and not just in China and the DCEP countries.
23/ Along with the rise of ubiquitous surveillance cameras in public places – all linked together with AI-powered insta-analysis – all transactions are immediately linked to individuals. With cash gone, it’s extremely difficult to buy a burner phone or SIM card.
24/ Fines for trying to manipulate your credit wallets are harsh, and no one ever invented an alternative digital currency that was able to hold value.
25/ Big data analysis wasn’t always so powerful. But it is now. Of course, humans had credit cards for decades, but unlike those early days, now governments can sift through all financial data with the press of a button.
26/ To get credits, you need to provide ID. To use credits, you need to be loyal. To get the best perks, you need to be a perfect patriot. Around the world, digital currencies give governments unprecedented abilities to control their citizens.
27/ If your digital profile doesn’t have a top rating, you’re locked out of many public services + benefits. In dictatorships, if you dare to criticize the government, you immediately lose financial abilities. Some say being in financial jail is worse than being in actual prison.
28/ Corporations do create their own money. Libra was just the beginning. But all these credits are inevitably pegged to the digital dollar or DCEP, and therefore are surveillable, censorable, and confiscatable. They don’t offer an escape.
29/ There has also been a dramatic increase in the real-time sale of your data + behavior to third parties. There is practically no way to buy something without your government + a range of corporations knowing. Instantly upon purchase, you’re met with a variety of advertisements
30/ Many people have upgraded to smart visors and retinal implants, and they get advertisements there, too. Unless, of course, they can pay for the premium versions. In the DCEP countries, one can opt out of everything except government propaganda.
31/ The public feared the rise of the Orwellian police state, and it came, but they also got the dystopia of Aldous Huxley.
32/ In this brave new world, a sophisticated constellation of carrots and sticks built into the financial system encourages and reinforces state-compliant behavior with impressive efficiency. Patriotism is addictive.
33/ The Chinese social credit system, much mocked in the early 2020s, was finally implemented by governments worldwide in the ensuing decade, and with the transition into a fully digital economy, has become incredibly effective at stamping out dissent.
34/ Governments ran sweeping campaigns to locate every single citizen within their borders and connect them to national identity systems.

India’s Aadhaar was the first of many, initially promoted as a miracle for the unbanked, vulnerable, and stateless.
35/ But later, it became clear that these ID networks were just surveillance and exploitation machines.

Things are more fair for some, but a tiny few control everyone else in a way not even previously imaginable.
36/ The benevolent idea of “compliance” has led ultimately to slavery. It is the digital banality of evil.

Even now, governments continue to innovate their surveillance tech.
37/ Some citizens are being offered valuable perks for agreeing to install their credit wallets into their wrists or retinas.

They say it’s the ultimate in touchless convenience. The program is popular. Some analysts say that by 2050, everyone will have one.
38/ This could be our world.

But thankfully, this is a fantasy.

In our world, we have an escape.
39/ In 2009, a pseudonymous programmer by the name of Satoshi Nakamoto launched Bitcoin, a sovereign financial system.
40/ Over the next few years, this decentralized money project grew. A global community made it strong, and grew a brilliant initial design into an unstoppable force. Over time, there were more nodes, more miners, more users, and more adoption.
41/ By 2020, the separation of money from state had begun.

What was first a curiosity turned into a powerful global phenomenon.
42/ Once people understood they could digitally transact in a parallel economy that authorities didn’t control, they wanted to learn more and get involved. Satoshi pioneered a way out of the panopticon with proof-of-work, creating a non-governmental financial system.
43/ Our future 2040 is still a horribly imperfect place, but omniscient tracking and surveillance is much more difficult for governments to achieve, because Bitcoin has enabled the survival of a digital form of cash.
44/ To read more, or listen (courtesy @laurashin), see my full "A World Without Bitcoin" essay here:


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More from @gladstein

5 May
1/ It is *really important* to understand that Bitcoin is very different from Dogecoin.

Some are making jokes comparing the two, especially as Doge has outperformed BTC + ETH this year.

Many of you already know, but for everyone else, here are some of the key differences 🧵
2/ Bitcoin is absolutely scarce. There will never be more than 21 million Bitcoin.

Dogecoin is infinite. The system is on track to mint 14.4 million new Doge each day and 5.2 billion more Doge each year, forever.
3/ Bitcoin’s issuance is predictable. The users, who are self-interested to preserve the system, control the rules.

Dogecoin’s issuance is unpredictable. It can and has been altered. For example, in 2014 the creators simply changed the monetary policy from finite to infinite.
Read 19 tweets
30 Apr
1/ While doing research for my essay on the negative externalities of the petrodollar, I learned a huge amount. Much of it was shocking or surprising.

Here's a thread with a few of my favorite bits of insight, with links for further reading 🧵

2/ The Vietnam war was the first American war fought almost entirely on credit.

Previous wars were financed significantly by higher taxes:

3/ In 1971 the French were so worried that the dollar would devalue as a result of exorbitant American spending on war and social programs that they sent a battleship to New York City to collect their gold.

A few days later, Nixon closed the gold window:

Read 19 tweets
30 Mar
1/ In a new @Telegraph column @jamestitcomb claims that it is "hard to argue that Bitcoin has lived up to its mysterious inventor’s early intentions as a world-changing financial protocol" and says the main outcome has been making "a small number wealthy"

🧵 on why he is wrong:
2/ To be fair, it is easy to arrive at this conclusion if you completely ignore (as Mr. Titcomb does) how people are creatively using BTC worldwide.

If you only read buzzy US headlines about Tesla + NFTs, you'll miss the big picture. I hope journalists are willing to dig deeper
3/ A lower-bound estimate of unique Bitcoin users based on exchange data (excluding p2p activity) is ~130M people. Many of these millions are in emerging markets. For example there are 1.3M users of one Bitcoin trading platform alone (@Paxful) in Nigeria:

Read 23 tweets
29 Mar
Important to keep in mind:

Bitcoin's Proof-of-Work was invented to escape Proof-of-Stake financial systems, where the largest asset owners can unduly influence the rules of the game.

Thanks to PoW + full nodes, neither miners nor the biggest BTC hodlers can change the protocol.
In the coming year, we will see many people increasingly try to argue that Bitcoin should shift to Proof-of-Stake for various reasons.

This would defeat the entire purpose of Bitcoin.
Most recently, @Noahpinion argued that Bitcoin should move to Proof-of-Stake in Bloomberg.

By doing so he demonstrates that he does not understand how or why Bitcoin work.

@nic__carter did a great job dismantling his argument here:

Read 5 tweets
22 Mar
1/ Want to know who controls Bitcoin?

Read "The Blocksize War" by Jonathan Bier.

This should be *required reading* for any journalist or scholar writing about Bitcoin.

🧵 on some of my favorite insights:

2/ The book covers the "blocksize wars" of 2015-2017 and the two major visions for scaling Bitcoin to the world.

Which philosophy would win out, the one that prioritizes transaction volume + corporate control?

Or the one that prioritizes decentralization + individual control?
3/ This tour of the battle for the soul of Bitcoin starts with the scaling debates that began with Satoshi and revisits Gavin and Mike, Bitcoin XT/Classic/Unlimited, the DAO, SegWit, the NYA, Segwit2X, Bcash, NO2X, and the eventual triumph of a Bitcoin controlled by its users.
Read 21 tweets
18 Mar
New @DeutscheBank future of payments report on Bitcoin is out.

Their top conclusion? Bitcoin is “too important to ignore”

It’s long but interesting with some neat charts so here’s a 🧵:

2/ The title of the report is worth pondering:

“Bitcoins: Can the Tinkerbell Effect Become a Self-Fulfilling Prophecy?”

There are pictures of little girls wearing fairy costumes on the cover and Peter Pan quotes inside.
3/ DB: “Bitcoin’s value will continue to rise/fall depending on what people believe it is worth. This is the Tinkerbell Effect: the more believe in something the likelier it is to happen based on Peter Pan’s assertion that Tinkerbell exists because children believe she exists”
Read 21 tweets

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