Thread by @tip_nz

In a world where change is inevitable, immutability is a breakthrough

🧵 on how #Bitcoin creates our new reality

1/#Bitcoin's immutability is a breakthrough

It is easy to create a newer, shinier form of money with ever-changing governance. This has been done in the past. It is near impossible to create money with the immutability and fairness of the most valuable resource on Earth - "Time"

2/The process of Bitcoin resembles the process of time

Time moves the unknown future into a known past through a sense of “now.” Bitcoin moves unknown future transactions into a recorded past on the timechain through the action of timestamping in the present

3/Once a txn is confirmed & timestamped with proof-of-work, the block of txns is broadcasted to nodes across space, added to an undisputed record of the history, and it exists in Bitcoin’s reality forever

This is how #Bitcoin creates and reinforces its own self-contained reality

4/The arrow of time dictates we can only move forward, not backwards, which means history cannot be rewritten

Over the life of #Bitcoin no one has been able to change the history of the timechain, unlike #ETH reversing a $60m txn or fiat banks fudging their books

5/The act of rewriting the past sets a precedent that it can be done again, thereby undermining immutability

This is an important problem to solve in the digital realm because digital value requires validation of originality

6/The first and oldest version of something is the "original" version and therefore more valuable than its digital copies

To establish the originalness of something, we need to know its place in history - what comes before and after

7/Timestamping gives something digital a permanent place in history

In the context of digital txns, the first confirmed txn is the original txn and once something is spent it can't be spent again

8/If the digital past can be changed then doublespending can occur, which undermines the process of validation by distorting the sequence of events

This distortion undermines digital scarcity and the value of digital creations

This is why immutability is key

9/Now take this concept of originality and digital value, and apply it to the #Bitcoin protocol itself

The original version of BTC is the one running today. Those who have tried to change BTC have forked off and by all measures failed to overtake the original BTC

10/#Bitcoin's perseverance and immutability has enabled it to create money with the characteristics of the most valuable resource on Earth - time

#Bitcoin has done what it has set out to do with the longest track record of doing so

11/Unless you can turn back time and recreate this path-dependent outcome, you're not going to create a "new Bitcoin" let along be able to put in more work than has gone into #Bitcoin's track record of 700,000+ block height and counting

12/The act of validation requires work in the form of energy, which is a cost to deter bad actors from manipulating the system as the energy required to simply doublespend outweighs the profit from doing so

Everyone faces the same disincentive since we all play by the same rules

13/In contrast, our current system requires very little effort from those with large existing stakes to continually benefit from the system at the cost of others

Large asset holders = more creditworthy = privileged access to new capital = buy more inflation-hedging assets

14/This virtuous cycle for some is a vicious cycle for others

Those who are asset-poor find it hard to access capital to accumulate assets and bear the brunt of inflation without protection & forced to take on more risk relative to their wealth in order to grow their wealth

15/When money is fiat, it is a melting ice cube that must be spent of invested otherwise it loses purchasing power over time

When money is time, it becomes a SoV with real opportunity cost to every action

Those who hold money in #Bitcoin by default holds the most valuable asset

16/Individuals are able to better understand trade-offs with money because we have a common denominator of "time" to measure across everything - from hamburgers to housing to energy to salaries across space and time

17/With immutable sound money we are incentivized to be more thoughtful in our consumption and choose high quality products and services that stand the test of time because time is precisely what we're giving up in order to acquire something else

18/We move away from a mindset of "growth at all cost" to one that thoughtfully considers "opportunity cost"

By creating money from time, #Bitcoin fundamentally changes human incentives and the future of humanity

bitcoinmagazine.com/culture/how-bi…