To be clear, the companies run by non-founders may buckle. I don’t expect Google, Microsoft, Apple, Amazon to hold any line.
But Zuck & Jack still control their companies. In different ways, they are adopting cryptocurrency. And they aren’t backing down. m.facebook.com/zuck/posts/101…
People also aren’t thinking about how the battle lines get drawn in a time of true inflation.
It isn’t Republican vs Democrat anymore. It is the unmasked state vs the people — of all colors and backgrounds — losing their savings to inflationary seizure.
The regime is also losing steam. Its best writers have left for places like Substack. Its best efforts can no longer control world events. The governing ideology is a poor fit for governing. And it is facing powerful challenges from many directions.
For all these reasons and more, I think the coalition that wants uncensored information on inflation will prove stronger than the coalition that wants to ban it.
Especially because the establishment labors under the impression that high inflation surely won’t happen…
Btw, I’ve changed my mind on this. We still need decentralized social. But on the specific issue of BTC, and related issues like inflation, I no longer think Twitter will silence maximalists.
With somewhat lower probability, I don’t expect it on FB either. But we will see.
Everything technology disrupts will see prices fall. Everything the state subsidizes will see prices rise. Like the graph below, but even more extreme.
The state actively prevents automation in the sectors it controls. Baumol’s cost disease doesn’t happen by accident.
Arguments vary — sometimes it’s safety, sometimes explicitly about protecting jobs — but there’s a reason you don’t have free AI medical imaging on your phone.
The steelman version of this argument is not that Bitcoin would fail, but that money itself may not be easily able to buy valuable things in a time of serious conflict — like public safety, or other social goods.
That is, we know from recent experience in conflict zones that smartphones and wireless internet are insanely robust technologies.
We know the Bitcoin network has survived many attacks, including the recent Chinese state assault on mining.
And we know private keys work offline.
The real issue in a modern Mad Max scenario is not that Bitcoin fails, but that money itself fails to buy the most useful things you want in a warzone: like an end to war, or a ticket out of there.
Good but no traction: angel investment
Bad but no traction: tulips
Good with high traction: new paradigm
Bad with high traction: threat to democracy
The establishment mindset flips between apathy and panic.
Facebook is a fad, then it’s a threat to democracy. COVID is dismissed as paranoia by preppers, then you have to wear a mask even when vaxxed. Bitcoin is tulips, then they start advocating seizures.
Every disruption like this has, so far, been sort of integrated into the establishment — albeit in a reactionary way. Facebook censorship, COVID lockdowns, Bitcoin-motivated CBDC efforts.
But the less the foresight, the greater the cost of that integration. Eventually too great.
But if I think about setting parameters in two-sided marketplaces like Uber or eBay, it is true that you can experiment by varying incentives within different cohorts or geographies.
This is related to the problem of doing “social engineering” without even doing “social science”.
Where is the control group when a new regulation is rolled out? How do you select a representative test cohort? And what do you use to account for time-varying behavior?
Rather than endless 51/49, you have two separate, internally aligned entities with clear sense of direction and what they want to build. Then selective migration of people between jurisdictions.
The counterargument is that two separate polities may evolve differently enough that they *eventually* engage in interstate conflict. Especially if one of them is taking the others’ citizens.
Possible! But the alternative is internal civil conflict, and that isn’t good either.
The honest argument for the EU wasn’t that the bureaucratic superstate is efficient. It was meant to sew together jurisdictions such that they don’t even think about fighting each other. Avoiding war was the motivation. europa.eu/european-union…
Institutions tend to censor inflation stats. This happened in Argentina, Venezuela, Zimbabwe.
Twitter should prepare for the moment when it must fact check the establishment on inflation. That will require shadow stats on inflation from consumer purchases, perhaps from Square.
I wrote a spec for a censorship-resistant inflation index. It’s framed for a startup, but Square could easily do this. In a crisis, accurate inflation info would be something people checked Twitter for every day. @milessuter@moneyball@jack1729.com/inflation
In a pinch, the price of BTC vs each fiat currency may be the best single measure of inflation.
But it is possible that Google may stop showing this info, and centralized exchanges may come under pressure.
This is why on-chain price feeds are more important than many think.