Thread by @bauhiniacapital

One could take this any one of several ways.

1) Because bitcoin exists, and there are 100 million satoshis on 21 million bitcoin, there are 2.1 quadrillion satoshis out there, which is plenty.

https://twitter.com/naval/status/1406495301846716416

Countries define it as legal tender and implement a low-cost exchange at all times so that vendors of goods and services may take fiat-equivalent. Life goes on, fiat continues to be used. But countries recognize that those who own bitcoin are a kind of super-economic class

of their own, and basically accrue wealth. They are the true capital. Everyone else is labor. Think Elysium or Altered Carbon.

The goal of bitcoin owners at that point would be to get govts around the world to outlaw every OTHER crypto.

And everyone in the world - the 99% -

is fine with that b/c they recognize that those who bought bitcoin early are geniuses who deserve permanent wealth inequality.

Or maybe not.

2) There is lots of crypto out there, and new crypto every day, and bitcoin dominance is dropping constantly, meaning in effect, the

fiat-equivalent capitalization of all crypto continues to grow and grow because.... why not? This effectively negates the "limited supply" argument for crypto and becomes a cross between "free reserve banking" and unlimited seigniorage as long as you can market it well enough.

Murray Rothbard would have a field day with this. But it basically means the world becomes a barter economy. Every neighborhood, every trade union, every company, etc, would create their own coin. Because seigniorage and opacity.

As @naval points out, this could be the last

fiat crisis because all future crises will be around crypto. That crypto has become a kind of fiat is beside the point.

Or... it could be that the world embraces bitcoin. Permanently.

3) All or a significant majority of countries adopt bitcoin, forsaking their own currency/seigniorage/fiat issue. Presumably, all countries in the world doing this will make a tally of all the debt and financial assets in their borders or owned by their citizens, and

will adopt a dollar/euro/yen/won-satoshi rate whereby after a certain date, all liabilities and assets will simply convert at a fixed rate. One will hand in one's cash, and get sats. And then everyone will simply use sats. For everything.

All transactions and contracts will be denominated in sats. Your salary will be in sats. Your funds and fund management fees will be in sats. Because productivity exists, there will be permanent deflation in terms of satoshis. Every year, you will earn fewer satoshis.

When you get your annual performance review, the boss will say "the firm is cutting everyone an average of 25% this year. We're giving you a raise so you're only getting cut 15%." When someone leaves your firm because they are head-hunted, someone will say "yeah, I heard she got

bid away up 10% then flat for 3 years." 'oooh... no way!'

And b/c countries cannot simply allow low-cost countries to take all their sats through labor cost arbitrage ("yeah I know you have two kids to feed, but an accountant in Manila is 70% fewer sats and growth of -15%/yr"),

they will effectively institute capital controls on everything everyone does. Gone is globalism. Gone the WTO. Want to buy something cheap off Amazon? Good luck. Besides.... who would spend sats when they grow faster than one could ever earn?

Debt? Ha! The MOMENT something like

this gets announced, all debt will be replaced with asset exchangeables. Everyone would sell their house to get cash and own debt. Nobody would want to owe debt when it has such a high real cost. Those who are super-rich who own debt would end up owning the assets which service

it. Those who are poor who have debt against their assets (their homes) would effectively become indentured servants. And because inventory is SUPER-costly, it drops to very low levels, creating an inflationary drag on deflationary pressure, meaning, paradoxically, goods become

scarcer but labor is in surplus (less goods production). Over time, in local economies, because of joblessness, sats are no longer the currency of exchange. Subsistence barter economies develop. People grow their own food, become vegetarian. In true libertarian fashion, local

currencies develop in 'inflationary' assets such as grams of assayed gold and silver. The highest-earner in town becomes the repairman of early 21st century technology.

But this non-fiat utopia has a fatal flaw.

Everyone who has dollars or assets has to acquire sats to repay their debt. That means all the satoshi (bitcoin) owners in the world have to give up their sats in return for assets. If they do not, there is no way to give sats to those who hand in their dollars. Sat owners can't

be forced to accept dollar bills for their sats. Governments will effectively have to buy sats to pay off all government issued paper currency. But that means sat owners have to accept government obligations. Or govt-owned assets. And there aren't enough of those in the world to

pay the 1% who own 98% of bitcoin to let go of their bitcoin. So basically, it has to come down to a political negotiation between bitcoin owners and govts of the world as to how much of the world's assets bitcoin owners will get to own in return for allowing the rest of the

world to adopt bitcoin as their currency so they can enjoy a permanent deflationary inequality utopia.

Somehow I have my doubts.

So I think naval is full of 💩 on this. But pithyisms are like that.

And in case I get blocked, the twete is...