2/ Fiat monies, while being inferior on the standard attributes that make for a good store of value, have one advantage over market based monies: you are paid interest to hold them. This interest can be paid because the sovereign claims seigniorage over their money.
3/ In effect, a state can pay interest on the money it issues because it parasitically profits from the productivity of the population over which it claims dominion. States also use the interest rate in a counterproductive attempt to keep their national economies growing.
1/ In their embryonic form many species appear alike. But imprinted in their various DNAs is the code that will evince their great differences in the fullness of time.
A thread on the great debate about what #Bitcoin is and why only one of the two major visions makes sense
2/ In its first few years #Bitcoin appeared to be both a disruptive payment rail (near zero transaction fees) and a promising store of value (dramatically increasing in value over time).
Yet written in the code that powered its network were rules that guaranteed only one outcome
3/ #Bitcoin's "consensus rules" are the set of rules agreed upon by all computers running on the Bitcoin network. Only those computers abiding by these rules are accepted as a part of the network. Perhaps the most famous rule is the number of bitcoins that are created per block.
2/ When the State makes something illegal that is in high demand (or abandons the provision of justice) it's saying there is no power structure to enforce property rights in this sphere, creating a power vacuum.
3/ The power vacuum is usually filled by a strongman, kingpin or drug Warlord who metes out his own justice according to his strength and guile. He becomes a monarch in his little economic fiefdom.
1/ The CEOs of today's information gatekeepers (Facebook, Google, Twitter) are charting a perilous path between Scylla and Charybdis. On the one hand they face the ultra left-wing politics of their employees. On the other the plurality of users who don't share those politics. 👇
2/ Of these CEOs, Sundar - Google's CEO - is in the weakest position. He does not have the internal credibility of a founder, nor the credibility of a CEO who has tranformed the company, as Satya Nadella has at Microsoft.
3/ In a recent mass-walkout by Google employees, Sundar appeared weak and the employees had the audacity to demand representation on the company's board of directors, among a number of other extremely left-wing demands.
1/ On the eve of #Bitcoin's quadrennial supply shock, inquiring minds are wondering whether the so-called "Bitcoin halving" is "priced in". In this thread I will explain that it is not and it cannot be priced in. 👇
2/ It is important to understand that #Bitcoin is not a traditional financial asset and cannot be priced as such.
3/ In finance the term "priced in" refers to whether information that affects future potential cash flow of a revenue generating asset or company has been properly discounted into the current valuation, factoring in things like interest rates.
1/ The #Bitcoin block reward halving is less than a year away. How does the halving interact with Bitcoin's recurrent hype cycles, is it the cause of Bitcoin bull markets and what can we learn from past halvings?
Let's explore these questions in a thread 👇
2/ Every ten minutes (approximately) a fixed number of bitcoins are produced by #Bitcoin miners to compensate them for their job of verifying and ordering transactions. Because miners operate marginal businesses they tend to sell most of their mined bitcoins to pay their expenses
3/ Miner selling creates a constant downward pressure on #Bitcoin's price. Without new money entering the market, Bitcoin's price would decline.
At a BTC price of $10,000 approximately $14 million dollars must enter Bitcoin to offset the downward selling pressure.
1/ We are in the early stages of a new #Bitcoin bull market. Let's explore what we know about such bull markets based on observations from the four major hype cycles that Bitcoin has already undergone. A thread 👇
2/ Bull markets start off relatively slowly because of an overhang of potential supply. Firstly, some who bought at higher prices in the prior cycle and are looking to be "made whole" so they can escape their positions, plus whales who wished they had cashed in near the top.
3/ Before it is clear the bull market has begun, there is a period of steady accumulation as "weak hands" are liquidated and replaced by "strong hands" who have long term conviction in the value of #Bitcoin.
1/ How many times did you have to hear about #Bitcoin before you were ready to acquire some or, at least, explore its significance? This number of "touchpoints" is an important factor in the process of Bitcoin's monetization.
Let's explore the idea of touchpoints in a thread: 👇
2/ We now know that the process of #Bitcoin's monetization is occurring in a series of hype cycles where the magnitude of each cycle is defined by the people "reachable" in that cycle. Which people defined the prior cycles? 👇
1/ Five years from now it will be widely recognized that the major financial players in the "cryptocurrency space" (mostly exchanges) made a strategic error in pursuing a horizontal business opportunity rather than a vertical one.
A thread 👇
2/ The simplest and most obvious profit opportunity for exchanges today is to list as many cryptocurrencies as possible (the "horizontal" strategy) and collect fees on the trading that occurs between them. This naive strategy is a mistake in the long term.
3/ There is an opportunity cost to supporting many (sometimes hundreds of) cryptocurrencies. Engineering time needs to be devoted to making sure each project is free of bugs & trojan horses, isn't prone to easy 51% attacks and in dealing with idiosyncratic blockchain APIs.
1/ I HODL the #LNTrustChain torch. The lightning network is a profoundly important development in the history of #Bitcoin. Thread 👇
2/ The lightning network allows for the eventual transition of #Bitcoin from an incipient store of value (as it is now) to a generally accepted medium of exchange (i.e., to become a fully fledged global money).
3/ I'm deeply grateful for @hodlonaut for creating the torch to help promote the lightning network and increase its capacity.
When I wrote the Bullish Case for Bitcoin I knew LN would be important but did not know it would grow this quickly. I'm more bullish than ever.
1/ 10 years ago today, Satoshi Nakamoto released version 0.1 of the #Bitcoin software. About two days later, the brilliant cryptographer Hal Finney (RIP), had downloaded Satoshi's code and was also running it, increasing the node count of the Bitcoin network to 2.
2/ As with many things related to #Bitcoin, Hal grokked its significance immediately.
3/ Today there are over 10,000 nodes running the Bitcoin software, dramatically increasing its resiliency and guaranteeing its revolutionary monetary policy.
1/ I'm so excited to see this documentary about The Great War. Most people have little or no knowledge of the first World War, despite it being historically far more significant than the second. It spelled the end of the old European order.
2/ It also spelled the end of the classical gold standard, which had brought prosperity to much of the world during the 19th century. The world had finally escaped the Malthusian Trap only to enter a century of statism, fiat money and mass murder.
3/ Part of the disinterest in the Great War is the antiquated footage we have of the events. We see the past as a series of snapshots of soldiers awkwardly goose-stepping at 16 frames per second, making it harder for us to empathize with their struggles. It seems a caricature.
3/ But winter will not last forever. The first blossoms of spring will show themselves in the years to come. There will be significant increases and institutionalization of the liquidity channels to Bitcoin in the next year.
1/ 10 years ago today (Fri 6:10pm 2008-10-31 UTC) Satoshi Nakamoto announced the creation of #Bitcoin to the cryptography mailing list. Satoshi's creation is the most important innovation to money (itself the most important good in any society) in a thousand years.
A thread 👇
2/ When the Bitcoin network launched in 2009, very few people understood its significance. Today, ten years later, Bitcoin's market capitalization stands at over 100 billion dollars.
The great Hal Finney RIP, the first person to receive bitcoins from Satoshi, grokked its import:
3/ Never in the history of the world had it been possible to transfer value between distant peoples without relying on a trusted intermediary, such as a bank or government.
Nakamoto’s invention allowed this for the first time ever.
1/ I discovered an interesting potential case of Twitter censorship. I was trying to find an old tweet of mine and for the life of me no search that I did would unearth it. @TwitterSupport. I had to use Google (lol) to find the tweet on Twitter.