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27 Jun, 7 tweets, 3 min read
Fiat company
- paper incorporation
- paper contracts
- paper payments
- paper accounting

Crypto company
- on-chain incorporation
- on-chain smart contracts
- on-chain payments
- on-chain accounting
Yes, those "paper" forms are currently being sent electronically as PDFs. But we've just taken the paper workflow, scanned it, and put it online.

That was fine as a first step, but it isn't the inherently digital version. Crypto companies are.
archive.is/aP2hv#selectio… Image
Internetification is like electrification. We're still digesting it. The digital native era is just beginning.
slate.com/culture/2007/0… Image
The Wyoming DAO law is a major step forward to bridging the fiat present and our crypto future. Amazing work by @CaitlinLong_, @GovernorGordon, and everyone in Wyoming. jdsupra.com/legalnews/wyom…
Just the accounting implications alone are huge. On-chain accounting automates so much of what is currently done manually.

That's why the Big 4 already use the Bitcoin & Ethereum blockchains as gold standards of truth when reconciling crypto transactions.
balajis.com/why-india-shou… Image
One thing some don't get: none of this will happen outside the cryptoeconomy. You can't decouple a blockchain from a digital asset.

It's when people use the digital asset that you get smart contracts, on-chain signatures, on-chain accounting, on-chain everything as a byproduct.
All the blockchain accounting/supply chain/etc stuff will happen, but it'll start with entities that switch over to stablecoin-first transactions.

This is already happening, USDC is just better than wires once it's in your workflow.

Also flips your bank to a crypto exchange...

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More from @balajis

balajis.com Profile picture
28 Jun
Good news: the reduction [1] in Bitcoin mining hashrate from China is visible but survivable. There's a lot of mining capacity elsewhere.

Bad news: blocks may be slower for a while [2]. But holders are unaffected.
[1] bitinfocharts.com/comparison/bit…
[2] bitinfocharts.com/comparison/bit… ImageImage
Notes:

1) One day charts are highly volatile and we need to see where everything averages out. Some kind of drop looks real, but capacity may come online in other places.

2) The first chart (hashrate) is over years, the second is over months - otherwise you can't see the blip.
One somewhat vexing thing:

(a) when hashrate drops a lot, you want a quick difficulty adjustment
(b) but when hashrate drops a lot, blocks take longer to mine, so difficulty adjustment takes longer to come

Not ∞ time. This site *estimates* 26 days.
bitinfocharts.com/bitcoin/ Image
Read 5 tweets
balajis.com Profile picture
22 Jun
Keep your identity small by keeping your identity invisible. The pseudonymous economy.
To exit from a currency, you need to be able to move your digital wealth to a new identity.

To exit from a community, you need to be able to move your digital reputation to a new identity.

This is the only way to really keep your identity small. See:
One of the reasons people get radicalized by Twitter is that they're locked into their communities.

Reputation is real, and as quantifiable in some ways as currency - by backlinks, karma, sentiment, & other metrics.

Portable, pseudonymous reputation could reduce radicalization.
Read 6 tweets
balajis.com Profile picture
20 Jun
Proof-of-work is absolute truth, proof-of-stake is relative truth. Both have their role. But for the most important transactions it's better to produce more clean energy than to give up on the undeletable history that accumulated work provides.
It's hard to express this compactly to a non-technical person, but basically: it's harder to fake the results of a massive calculation done over ten years with datacenters full of hardware than it is to convince a fixed set of humans to change their minds and rewrite history.
This is what we get when there is no absolute truth.

Using Merkle trees, we can prove the existence of arbitrary amounts of data using just one tx on the Bitcoin blockchain.

Data availability is nontrivial (IPFS?) but proof that the original photo existed would be feasible.
Read 9 tweets
balajis.com Profile picture
18 Jun
Thesis: coin market caps encourage mimesis.

Google didn't *initially* compete with other companies *primarily* on its stock price but on its product.

Assets should likewise have unique features. Good example: Zcash's privacy sets & shielded transactions. electriccoin.co/zcash-metrics/ ImageImageImage
> Google didn't *initially* compete with other companies *primarily* on its stock price but on its product

Note: yes, when raising capital you're competing with other companies based on your stock. But the customer for your stock isn't identical to the customer for your product.
Now, it's true that customers of product (users) are increasingly becoming customers of stock (shareholders). Robinhood makes it possible to buy stock in products you use. Crypto makes this default.

That's powerful, but also turns many off. More product culture will be helpful.
Read 5 tweets
balajis.com Profile picture
11 Jun
Bitclout actually has an interesting possible counter to cancel culture.

Long-term holders of someone’s creator coin now have a financial incentive to defend them if attacked unfairly.

All holders suffer downside if a cancellation crashes a creator coin price, so they defend.
Blockchains take us from the slippery slope to the crypto cliff.

An attacker can no longer pick off one party at a time; attempted seizure (or, now, cancellation) is an attack on all holders.

This gives a monetary incentive to defend another’s rights.
This is what *some* of the defense of Elon is about.

I generally support Elon’s work in rockets & cars because I think it’s technologically pioneering. I hold no TSLA.

Others support in part because they are TSLA holders, so attacks on the CEO can hit them too financially.
Read 7 tweets
balajis.com Profile picture
11 Jun
An important question when thinking about the El Salvador bill is what counts as receiving BTC.

On-chain? Sure.
Lightning? Ok.
Off-chain? Probably, or else popular wallets from exchanges wouldn’t count.

But if off-chain counts, then the $8B of wrapped BTC will count... 🤔
If off-chain BTC transactions count, such as Coinbase-to-Coinbase or Binance-to-Binance, then wrapped BTC transactions will count.

If wrapped BTC counts, then you can wrap BTC on Ethereum — or any of the new chains. Just like USDC is now present on four chains, including Solana.
If wrapped BTC counts, which it likely will, then every wallet for every chain which wraps BTC is a candidate for satisfying the law — so long as it also has L1 (and perhaps L2) interoperability.

So Polygon & Solana could be handling millions of wrapped BTC transactions.
Read 5 tweets

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