The new listing decision is making a cryptocurrency your government’s legal tender.

Cryptonetworks are attaining the scale (millions of holders) & resources (billions of dollars) to start conducting foreign policy.

Like digital proto-states, negotiating with nation states.
There are advantages for both decentralized and semi-centralized networks in this process.

A decentralized network can just be adopted. Any country can just stockpile BTC.

But a semi-centralized network, or a DAO, can offer billions in listing fees to incent national adoption.
Companies like Tesla, Amazon, and Google have negotiated with governments for some time. There are carrots & sticks on both sides. And often there is a binding promise of investment, made by a (centralized) CEO.

Cryptonetworks can now do similar things with on-chain commitments.
The process of accepting a volatile-but-appreciating asset as legal tender is a bit like a law firm deciding to take some amount of compensation in equity rather than cash.

It’s an in-kind investment in the asset. Which means the country needs a strong thesis on the asset.
In one scenario BTC is adopted first as legal tender by several countries, similar to BTC being listed first on every crypto exchange.

The next question is which other assets are listed, if any. It’s like diplomatic recognition. Expect large DAOs to be raised just for this.
Latin America is a good candidate for mass adoption of BTC because of their history of currency crises. They understand the problem it solves.

Other places, financial centers like Switzerland and Dubai, may gravitate towards defi and ETH. It fits their pre-existing culture.
Hundreds of millions of people will own many different kinds of digital assets, including cryptocurrencies, foreign digital currencies, and the digital currency of their own state.

We are entering an age of global monetary competition.…

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More from @balajis

9 Jun
The El Salvador experiment will be interesting to watch.

My hunch is that scaling will be “solved” by de facto custodial wallets with peering agreements and infrequent L1 events.

But so long as redemption is feasible, this is like a digital-gold-backed digital currency.
Here’s one scenario for the logistics:

N custodial wallets are hubs and the M citizens are spokes.

If a user of wallet 1 sends a transaction to a user of wallet 2, then the transfer looks instant on their screens.

Bulk settlement happens later on-chain between wallet 1 and 2.
Let’s say there are N=10 popular custodial wallets & they all do bulk settlement with each other every 24 hours. That’s N*(N-1)/2 = 45 pairwise on-chain Bitcoin L1 transactions per day, which is feasible.

Also, add in N daily on-chain transactions with the state’s Bitcoin fund.
Read 9 tweets
9 Jun
Wokes try to get you to say "Latinx".
Chinese nationalists get mad about Taiwan.
And coin maximalists want you to be a billboard for their coin.

All these social media religions devolve to language policing. But I believe in free speech.
All these social media religions (wokeness, MAGAism, maximalism, Chinese nationalism, etc) are just variants of Twitterism.

Ever notice their behavioral similarity despite the ostensible difference in ideology? They're taking direction from the algorithm.
If you walk up to someone on the street and randomly yell "FU!!!", you might get punched, jailed, or even shot. There's downside.

But if you do it online, you might get attention. There's upside.

This social reinforcement drives anti-social behavior.
Read 4 tweets
9 Jun

If I’m reading this right, all economic agents that are technologically capable of receiving BTC as payment *must* accept it as payment — though instant conversion to USD is made available to anyone who doesn’t want to take price risk.

A mandate for Bitcoin!
See my earlier post on “sovereign apps”.

The state of El Salvador has just mandated that all merchants in a country of 6.4M people accept BTC (with instant conversion for those who don’t want price risk).

This is a legal flippening. From “banning” Bitcoin to mandating it.
How does this interact with the ethics of voluntarism?

So long as vendors can opt out by instantly liquidating, they still have free choice. The onus on them boils down to installing an app to receive BTC.

The move shifts El Salvador’s defaults to robustify against inflation.
Read 4 tweets
6 Jun
If this is true, then a small country like Tuvalu (which gets a big chunk of revenue from the .tv domain name) could declare #BTC (and ETH!) to be legal tender.

The benefits would easily be worth billions.

So: could we legally crowdfund a prize for the first country to do this?
$5M isn’t that much money in crypto!

“Under the current deal…Verisign pays Tuvalu around $5 million per year for the right to administer .tv. For a nation whose annual domestic revenues tend to hover around $60 million, this is a substantial benefit.”…
Looks like Tuvalu uses the Australian dollar to peg their currency.…
Read 6 tweets
5 Jun
The Protocol is the Parent.

Two years later, headquartering in Silicon Valley and incorporating in Delaware is now the old school choice.

The new model is full remote with the protocol as the parent. That’s Ethereum, that’s Bitclout, that’s DAOs.
For example, the buildout speeds of the @solana and @0xPolygon ecosystems are incredible.

Nail the on-chain APIs, issue an asset, and the system self-organizes. Platforms have always been around, but ownable APIs are new.

Digital property rights are the best distribution deals.
The name of the game now is to find the best spot in the world to set up your bootloader, the entity that creates your decentralized asset & APIs.

What’s the right base of the space elevator? Where do you set up that legacy terrestrial entity? Switzerland and Wyoming stand out.
Read 4 tweets
5 Jun
Thinking about how to express this quantitatively, but mass pseudonymity is a stable equilibrium in the internet age in a sense that mass publicity is not.
If you're familiar with the inverted pendulum from control theory, the equilibrium is unstable. The pendulum will swing all the way to one side or the other without constant, costly balancing.

This is a metaphor for the real name internet environment. Too hard to stay balanced.
Here's a visual of getting a pendulum up into the inverted position, and then keeping it stable despite the gravitational force that keeps swinging it to one side or another.

That stabilization is expensive. Eventually energy runs out.
Read 7 tweets

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