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9 Jun, 4 tweets, 2 min read
Amazing.

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.
I have to think more about the “mandatory crypto” world.

I think that flippening will also come to accounting and finance this decade, as on-chain cap tables and exchanges are simply better than their off-chain counterparts. See: balajis.com/why-india-shou…

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More from @balajis

balajis.com Profile picture
10 Jun
Communist Capital: you must submit.
Woke Capital: you must sympathize.
Crypto Capital: you must be sovereign.
As the rising third power in the world, India has the potential to be the center of a new Aligned Movement — an upgrade to the Non-Aligned Movement that aligns every neutral country behind Bitcoin and decentralized crypto protocols. balajis.com/add-crypto-to-…
Crucially, Crypto Capital isn't anti-American or anti-Chinese for that matter.

There are Woke Americans & Crypto Americans, Crypto Chinese & Communist Chinese.

The Crypto American is much closer to the average Chinese hodler than to Warren, Trump, or Xi Jinping.
Read 4 tweets
balajis.com Profile picture
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
balajis.com Profile picture
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
balajis.com Profile picture
8 Jun
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.
Read 7 tweets
balajis.com Profile picture
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.”
washingtonpost.com/video-games/20…
Looks like Tuvalu uses the Australian dollar to peg their currency.
en.wikipedia.org/wiki/Tuvaluan_…
Read 6 tweets
balajis.com Profile picture
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

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