Inflation leads to more centralization over time because it makes it harder to save money. People start buying assets to protect their wealth. The higher the inflation, the more assets they need. Over time, people buy more and more assets to secure their wealth. As inflation rises, assets become more expensive, and those who own many assets make even more money. At the same time, because more people are buying assets just to protect their money, fewer assets are being sold or traded. This reduces the supply of assets, and since demand stays high, prices keep rising. This cycle pushes wealth and resources into fewer hands, leading to centralization. #inflation #assets #centralisation

Today’s monetary theory is like: “Buy something with it now, or we will slowly take it from you.”

The current system is inefficient because the value of the currency keeps changing due to inflation and fluctuations in the money supply. This means government spending, whether on healthcare, education, infrastructure, or social services, has to be recalculated and adjusted regularly. This constant adjustment creates a lot of bureaucratic effort, increases costs, and makes the system less efficient. Long-term budgets lose their value, and governments need to intervene more often to keep things running. A currency with a fixed supply, like Bitcoin, could be a solution, as it would provide long-term stability and make government systems more efficient. #bitcoin #government

Lightning transactions don’t necessarily need to be profitable to be valuable. It’s not essential for every payment to offer a financial incentive for processing. Often, it’s sufficient for companies or organizations to gain access to the payment network by operating a node. The primary incentive for running a Lightning node is participation in the network, rather than direct profit. Even so, this approach remains significantly cheaper than traditional transaction fees. This is what makes the Lightning Network so powerful and appealing. #lightning #payment #node

Technological progress makes products more efficient and cheaper, which has a deflationary effect. To keep the 2% inflation target, more and more money needs to be printed, increasing wealth inequality. The faster efficiency increases, the harder it becomes to artificially create inflation. With AI accelerating technological progress even further, the problem grows. This could lead to a deflationary problem—a risk to our system? Can this system work in the long term? #AI #technology #inflation

If I create two SD cards as backups for the private key for the BitBox, is that secure enough in the long term? How many years does an SD card reliably function, and what risks are involved? #bitcoin #bitbox #privatekey

Excited to connect with more of you on Nostr! 🚀 For the next week, I’ll zap 100 sats to everyone who follows and repost my account. Let’s grow together!

Sometimes, when I discover a new perspective on our monetary system, I find myself completely captivated by these thoughts. It excites me to imagine how much could change for the better in the future. The idea of being one of the first to understand this, and possibly becoming part of a movement that brings about positive change, is something I can’t let go of. This sense of euphoria is so overwhelming that I somtimes can’t even fall asleep. Are there people feeling the same? #hype #awake

Our assumptions about economics and money are based on a flawed understanding, because we use a monetary system whose value is constantly changing due to money printing and debt creation. As a result, faulty conclusions arise since the unit of measurement we rely on is not stable. Bitcoin is the very first alternative to this system, offering a constant unit across our world. It has the advantage that it cannot be expanded and cannot easily be altered, making it a fixed unit of measurement that enables a more objective evaluation of values and economic processes. #bitcoin #economics #changeperspective

One of the biggest issues in today’s financial system is the role of asset managers and how they handle our funds. These institutions often act as central authorities that not only manage our financial resources but also wield significant influence over markets. The core problem lies in the concentration of power and responsibility in the hands of a few major players. Asset managers like BlackRock, Vanguard, and Fidelity manage trillions of dollars on behalf of their clients. This centralization poses several risks: firstly, mismanagement or poor decisions by these institutions could have massive repercussions on the global financial system. Secondly, there is a potential dependency on a small group of decision-makers whose interests might not always align with those of their clients. Another issue is that companies are obligated to follow the directives of their shareholders. Their primary duty is to represent shareholder interests and implement their votes. By entrusting funds to large asset managers like BlackRock, shareholders effectively transfer their voting rights to a handful of centralized actors. This can create conflicts of interest, as decisions made by these asset managers significantly influence corporate policies across various industries. There is a risk that the same individuals control different industries. This could lead to intentional problem creation to sell profitable solutions later — for example, developing unhealthy foods that foster diseases, which are then treated with medications. Similarly, media campaigns could disproportionately highlight certain issues to promote profitable products like for example "environmental solutions." In capitalism, the entities generating the highest profits grow the fastest. Capitalism dictates that those who do not exploit these mechanisms will ultimately lose to their competitors. Even if these problems are not yet fully apparent today, within this system, it is almost inevitable that they will arise in the future. #pension #funds

If MicroStrategy’s Bitcoin holdings generate more profits than the world’s largest companies, it could lead to significant issues. If Bitcoin’s value rises to several million as we think and investors shift from productive assets to an “unproductive” MicroStrategy, what capital will remain for production? Will governments truly refrain from intervening? If trust in the USD collapses, wouldn’t governments seize Bitcoin from a company profiting solely from financial strategy? I don’t know the answer but would approach this cautiously.

America’s earlier success was closely tied to democracy and freedom, which created space for revolutionary ideas. However, this is no longer the case, largely because governments are creating massive amounts of new money and debt levels are rising everywhere. This constant money printing blurs real demand in the economy, making it difficult to identify where resources and labor are truly needed. The market no longer responds to natural supply and demand forces, as it once did, but is distorted by artificial financial interventions. This has undermined the ability of capitalism to function as efficiently as it used to. In a system that suppresses divergent thinking, innovation cannot flourish. Capitalism, especially in the U.S., worked well in the past because it automatically revealed where there was demand. When there was a shortage in a particular sector, wages would rise, attracting people to fill those jobs. This flexibility is lacking in centrally controlled socialist systems, where decisions are made from the top, and resource distribution is inefficient because it doesn’t reflect real needs. Socialism requires constant surveillance to ensure no one exploits the system. In contrast, capitalism self-regulates: if someone cheats or operates inefficiently, they can’t compete on price and will eventually fail. However, this only works if the currency is stable and not corrupt. Due to artificial money printing in the West, capitalism is no longer functioning as it should. Inflation and unequal distribution of newly printed money distort the market, benefiting sectors like finance while more essential areas are neglected. As a result, workers no longer seek the jobs that are truly needed, leading to dissatisfaction and inefficiency. The longer this continues, the greater the distortion or manipulation of the economy becomes, and the bigger the problems will grow. This will cause Western economies to fall behind other systems more rapidly or become less functional altogether. #democracy #system #moneyprintergoesbrrr

One reason for the decline in our population’s prosperity lies in the fact that the state is financed through taxes and inflation. A large portion of the money we give to the state is lost through bureaucracy, administration, and employee salaries. Only a fraction of the withdrawn money is ultimately returned to the public. This leads to us receiving less and less, while having to give more and more.

This might be a controversial opinion, but I think it’s important to consider. What are your thoughts about it? In an ideal capitalist system, a person earns money by providing value to others through their work or services. This means that wealth is fundamentally linked to making a positive contribution to society. Only those who give a lot to others can earn a lot. This encourages cooperation and service to the common good, as the incentive is to be rewarded for productive activities. However, the real problem arises when people acquire wealth without having to contribute anything. If someone simply receives money without working for it or providing something of value to others, their character develops differently. Such people don’t learn that money is earned by fulfilling the needs of others. Instead, they lack an understanding of community and the importance of mutual support because they already have everything and don’t need anyone. This can lead them to develop an egoistic character focused primarily on their own advantage. In extreme cases, this might even lead them to act maliciously at the expense of others to maintain or improve their status. To prevent these negative developments, maybe it would be important to tax unearned wealth, particularly inheritances, more heavily. This could ensure that wealth isn’t simply passed down undeservedly, which would reinforce social inequalities and unjust power dynamics. Capitalism could then continue to function as a system that promotes cooperation and encourages people to be rewarded for productive and socially beneficial contributions. I’d be interested to hear what others think about this.

Censorship of transactions in the Bitcoin network leads to a long-term decrease in profitability, making the network vulnerable to competition. The argument is based on the following considerations: 1. Economic Incentive and Profitability: - Miners are financially motivated to include transactions with the highest fees in their blocks. - By censoring certain transactions (e.g., images or data classified as spam), miners forgo potential profit by not including the highest-paying transactions. - In the long run, this practice reduces miners' revenue, and consequently, the funds available for investment in hardware and network security. 2. Competition and Network Effect: - An alternative network that does not engage in censorship and accepts all transactions could fill this gap, thereby generating more transaction fees. - This network could grow faster due to being more profitable and having more resources for development and infrastructure. - Even if, initially, the majority of users (e.g., 90%) support the censoring network, the uncensored network could gain significance over time as it becomes more economically attractive. 3. Long-term Consequences: - If the uncensored network gains enough market share, it could eventually overtake the original Bitcoin network. - To maintain its dominance, the Bitcoin network must remain the most efficient and economically attractive network. This means maximizing the incentive for miners by not censoring transactions, thus ensuring the highest economic benefit. In summary, censorship not only contradicts the principles of Bitcoin but could also weaken the network in the long run by making it less profitable and more susceptible to competition. Censorship resistance is therefore a crucial feature that contributes to the long-term stability and dominance of the Bitcoin network. #bitcoin #fees #centralizing

Why bitcoin and PoW is so great: Proof-of-Work is considered the best system because it is decentralized and cannot be centralized. In other systems, there is often an incentive to centralize in order to reduce costs. With PoW, as used in Bitcoin, computational power is required, which can only be generated using electricity. Since electricity is distributed globally, supply and demand determine where it is profitable to set up computers (miners). Attempting to centralize mining generally leads to higher electricity costs because fast increased energy demand drives up the price. This makes it more expensive for miners to operate. Miners do not need to be in a specific location to operate, and the computational power is the same for everyone. This means that the only factor driving up operating costs is the price of electricity. When energy prices rise, mining becomes more profitable in other locations with lower electricity costs. The decentralization of power supply and the associated cost differences effectively prevent the centralization of the mining process. Additionally, if someone tried to attack the network by centralizing it, this would incur significant costs. These high costs make such an attack unsustainable in the long run, as the attacker would need to spend more money than they could gain from the attack. Therefore, the system naturally leads to decentralization. #bitcoin #mining #energy