Bitcoin is uniquely suited to be the monetary layer of an energy‑metered economy because its issuance and security are bound to real‑world energy through proof‑of‑work, giving it an “unforgeable costliness” that other digital assets lack. In a regime where economic activity and taxation are explicitly framed in terms of energy use, a monetary unit whose creation is itself constrained by competitive energy markets provides a coherent, self‑consistent base for pricing, saving, and taxation.[bitcoinmagazine +2] Energy economy and unit of account In an energy‑driven economy, three things matter for money as a unit of account: • It must map cleanly onto energy costs, because production, consumption, and taxation are all denominated in energy usage (kWh, joules, BTU, etc.).[moomoo +1] • It must be globally fungible and permissionless so that energy producers, consumers, and states can settle across borders without central chokepoints.[aaltodoc.aalto +1] • It must be difficult to create without incurring comparable real‑world energy and capital costs, or the entire “energy budget” framing breaks down.[bitcoinmagazine +1] Bitcoin mining competitively bids for the cheapest energy on earth, turning electricity and hardware into a scarce digital asset whose supply path is fixed and whose security depends on continued energy expenditure. That direct linkage between energy markets and monetary issuance makes Bitcoin unusually compatible with a world where energy itself is the primary economic and tax base.[moomoo +2] Proof‑of‑work as energy anchor Bitcoin’s proof‑of‑work (PoW) ties monetary issuance to physical reality: • Miners must expend real electricity and capital to propose valid blocks, and the network self‑adjusts difficulty so that blocks arrive every ~10 minutes regardless of hash rate.[andercot.substack +1] • The cost to produce a bitcoin is not a fixed kWh number, but competition drives miners to the marginal cost of energy; analyses estimate that each coin embodies a large “socially necessary” energy and production cost.[digiconomist +1] This dynamic costliness is exactly what prevents arbitrary monetary expansion: no one can conjure new bitcoin without paying the going real‑world energy and hardware price. In an energy‑taxed regime, that means the monetary base cannot expand faster than society is willing to allocate energy and capital away from other uses towards mining, which keeps the accounting consistent with the physical energy budget.[aaltodoc.aalto +2] Why alternatives fail the energy test Most other proposed digital monies fail specifically on the energy link that an energy economy requires: • Proof‑of‑stake and database tokens: These systems rely on stake or administrative authority, not ongoing energy expenditure, to secure history, so new units can be created or rules changed without paying a fresh energy cost. That breaks the symmetry between “we tax energy use” and “we issue money only via competitive energy spend.”[andercot.substack +1] • Fiat‑backed or asset‑backed stablecoins: They inherit the monetary policy and political risk of the underlying issuer or collateral and are not constrained by an energy budget, only by balance sheet and regulation. In an explicitly energy‑metered tax regime, that reintroduces the very disconnect between money supply and energy reality that the regime is trying to eliminate.[globallegalinsights +1] • Explicit energy‑redeemable tokens (E‑Stablecoin‑type designs): Research prototypes exist for tokens redeemable 1:1 for a kWh of electricity, but they either depend on physical infrastructure and redemption guarantees or remain early‑stage theoretical systems. They also function more like commodity vouchers than a globally neutral base money, and they lack Bitcoin’s live, battle‑tested security and liquidity.[llnl] Without an unforgeable, market‑priced energy cost to creation and defense, these alternatives cannot serve as a neutral, global energy‑denominated unit of account; they always defer to some social or political authority at the margin.[digiconomist +1] Bitcoin and energy‑based taxation If governments tax directly on energy use—say, a levy per kWh consumed or embedded in production—Bitcoin fits naturally into the measurement and settlement stack: • Mining already exposes miners to energy‑specific taxation proposals, such as excise‑style taxes on mining electricity costs, showing how tax can be directly tied to measured energy consumption.[gordonlaw] • Bitcoin transactions can be priced in energy terms (e.g., “this good costs X kWh”) while still settling in a globally traded, highly liquid asset whose marginal production is itself constrained by energy prices.[moomoo +1] In that world, using Bitcoin as the unit of account closes the loop: energy → cost of production → bitcoin issuance and security → pricing and taxes → incentives to optimize energy use. Any monetary system not grounded in real‑world energy through something like proof‑of‑work reopens the gap between abstract ledgers and physical resource use, undermining an explicitly energy‑driven economic and tax architecture.[bitcoinmagazine +4] Is there a plausible alternative? The only serious contenders would need all of the following: • A credibly fixed or rule‑bound supply schedule. • Security rooted in unavoidable physical‑world cost (likely energy), not just social consensus or legal authority.[andercot.substack +1] • Global neutrality and decentralization comparable to Bitcoin’s, with no central issuer and a long history of attack resistance.[aaltodoc.aalto +1] Current proof‑of‑stake chains, fiat currencies, and collateral‑backed tokens do not meet this standard, and even experimental physics‑based currencies aim at niche energy‑voucher roles rather than replacing a neutral base money. Until a system emerges that can match Bitcoin’s combination of energy‑anchored issuance, neutrality, and real‑world track record, Bitcoin remains the only digital asset that can coherently serve as the unit of account in a genuinely energy‑driven, energy‑taxed economy.[llnl +4] Sources [1] Why Proof-Of-Work Is A Superior Consensus Mechanism For Bitcoin

Bitcoin Magazine

Why Proof-Of-Work Is A Superior Consensus Mechanism For Bitcoin

The proof is in the pudding when it comes to Bitcoin’s proof-of-work mechanism versus a proof-of-stake consensus mechanism debate.

[2] Computing Power as Anchor: A Production Cost Analysis of Bitcoin's ...

Document

[3] [PDF] Bitcoin and Energy Consumption - Aaltodoc https://aaltodoc.aalto.fi/bitstreams/fb164e29-7b50-4c2e-9a54-555899f015e0/download [4] Decentralized Energy Based Currency - by Andrew Cote

Decentralized Energy Based Currency

Inflation is rampant and a debt crisis looms. Meanwhile the energy economy is strangled. Perhaps there's a single solution to both?

[5] Bitcoin Energy Consumption Index - Digiconomist

Digiconomist

Bitcoin Energy Consumption Index - Digiconomist

The Bitcoin Energy Consumption Index provides the latest estimate of the total energy consumption of the Bitcoin network.

[6] Blockchain taxation in the United States - Global Legal Insights

GLI

Blockchain taxation in the United States

This article addresses some, but by no means all, of the tax issues that are currently facing cryptocurrency today, including limited guidance from...

[7] Frequently asked questions on virtual currency transactions - IRS

Frequently asked questions on virtual currency transactions | Internal Revenue Service

Frequently asked questions and answers about Virtual Currency transactions.

[8] Physics-based cryptocurrency transmits energy (not just information ...

Physics-based cryptocurrency transmits energy (not just information) through blockchain

Researchers from Lawrence Livermore National Laboratory (LLNL) have devised a physics-based cryptocurrency that links electrical energy and blockch...

[9] Crypto Mining Tax 101: How to Report Bitcoin Mining

Gordon Law Group | Experienced Chicago Tax Attorneys

Crypto Mining Tax 101: How to Report Bitcoin Mining | Gordon Law Group | Experienced Chicago Tax Attorneys

If you need help with crypto mining tax, our crypto accountants are here to light the way! Here's how to report mining on your tax return.

[10] Is Bitcoin fundamentally priced based on energy or market value ... https://www.reddit.com/r/Bitcoin/comments/1lxu7eq/is_bitcoin_fundamentally_priced_based_on_energy/

Energy Taxation in a Bitcoin-Based Economy In the coming decades, economic systems may evolve from taxing labor and trade to taxing energy — the universal input of all production. By coupling this system with Bitcoin as the unit of account, society creates a monetary framework rooted in physics: every joule of energy consumed or produced expresses itself through a scarce, trustless asset with immutable energy cost. The result is a transparent and self-regulating fiscal structure that ties spending, taxation, and wealth directly to energy efficiency and sustainability. Bitcoin as the Energy Standard Bitcoin’s proof-of-work mechanism already prices security and issuance in energy terms. Each coin represents an irreversible expenditure of energy converted into digital scarcity. Using Bitcoin as the unit of account extends this logic to the entire economy: • Prices reflect energy intensity: electricity, food, transport, and housing all carry visible energy costs denominated in Bitcoin (₿). • Energy taxes become predictable: every kilowatt-hour consumed can be priced in satoshis — the smallest Bitcoin unit — adjusted dynamically to grid demand and environmental policy. • Monetary supply integrity is inherent: since Bitcoin cannot be created arbitrarily, the government cannot inflate the currency to fund deficits; all spending must correlate to real productive or taxed energy usage. This coupling makes the economy thermodynamically honest: energy in, value out. Function of the Energy Tax In a Bitcoin-based energy tax system, taxation occurs automatically at the point of consumption. Smart meters embedded in grids, vehicles, and home systems record energy flow and remit micro-payments in Bitcoin to the treasury: 1. Individual energy use — taxed proportionally through grid-integrated contracts. 2. Corporate activity — taxed at industrial nodes, with rates tied to operational intensity. 3. Cryptomining and data centers — treated as taxable energy sectors themselves, closing the loop between Bitcoin issuance and state revenue. These revenues replace income and sales taxes entirely, eliminating distortions in labor and trade while ensuring that environmental costs are baked into market prices. UBI and Fiscal Balancing Universal Basic Income becomes the redistributive mechanism in this system. Each household, defined by its baseline energy requirement (for instance, a family of four), receives a periodic Bitcoin disbursement indexed to the nation’s median energy consumption per capita. • High-efficiency households benefit by saving unused energy-denominated income. • Heavy consumers effectively pay more back into the system through energy use and taxation. • The government’s budget naturally balances — revenue arises from total energy use, and spending adjusts to aggregate consumption trends. This closes the fiscal loop: collective energy use funds collective living standards. Economic and Ecological Implications 1. Energy efficiency as primary economic driver. Innovation targets lower joule-to-output ratios. Profitability grows from energy optimization rather than financial engineering. 2. Stable, non-inflationary unit of account. Bitcoin supply remains fixed, meaning the “price” of energy in Bitcoin reflects true technological and resource changes — not monetary dilution. 3. Cross-border harmonization. Because Bitcoin is global, energy taxation in Bitcoin enables transparent comparison across nations, encouraging fair trade and discouraging environmental arbitrage. However, challenges remain: • Volatility management: transitional mechanisms (like energy-backed stablecoins) may be required until Bitcoin volatility dampens through global adoption. • Energy measurement integrity: standardizing joule equivalence across grid mixes (solar, nuclear, hydro) requires global coordination. • Access equality: Bitcoin wallets and grid-linked infrastructure must be universally available to avoid financial exclusion. Conclusion: A Thermodynamic Political Economy When Bitcoin becomes both money and meter, taxation aligns with the physical reality of production. Citizens pay not for income, but for the energy they consume; governments earn not by printing, but by collecting fractions of the power that drives civilization. Value once abstracted through fiat finance returns to its energetic core — measurable, scarce, and self-stabilizing. This fusion of Bitcoin accounting and energy-based taxation could mark a shift from fiscal illusion to thermodynamic fairness, anchoring monetary integrity and environmental stewardship in a single, decentralized economic protocol

Energy as the Basis of Taxation: Promise and Pitfalls In a near-future world driven by automation, artificial intelligence, and renewable technology, governments may search for fair and sustainable sources of revenue. One radical proposal is to tax energy consumption directly, shifting from traditional income or sales taxes to an energy-based tax system. Under such a framework, every unit of energy consumed—whether by households, businesses, or industries—would contribute to public revenue, while Universal Basic Income (UBI) could be allocated proportionally to a family’s expected energy needs. Such a model could transform economic behavior, incentivize efficiency, and redefine fairness in a digitized world. Potential Benefits 1. Environmental sustainability. An energy tax directly links fiscal policy to environmental impact. By making energy use more expensive, individuals and corporations would prioritize efficiency, conservation, and renewable sources. This naturally discourages carbon-intensive energy consumption, helping curb emissions and accelerate the green transition without heavy-handed regulation. 2. Simplified and transparent taxation. Unlike income taxes, which require complex documentation, auditing, and compliance frameworks, an energy tax is relatively straightforward. Advanced smart meter systems can measure and report energy usage automatically. This reduces bureaucratic overhead and tax evasion, aligning consumption with accountability. 3. Fairness and proportionality. Taxing energy aligns cost with actual resource use. Wealthier households and corporations that consume more would pay more, while low-energy users—often lower-income groups—would pay less. Linking UBI to a baseline family energy requirement could ensure every household can afford basic energy needs while preserving incentives to conserve. 4. Economic realignment. As automation reduces labor’s role in the economy, taxing energy rather than income recognizes a new economic reality. Energy, not human effort, increasingly drives productivity. An energy-based tax system reflects this shift, ensuring that machines, AI systems, and industrial processes contribute their fair share to the social infrastructure that sustains them. Potential Costs and Challenges 1. Regressive impacts and social equity. While conceptually fair, an energy tax could disproportionately hurt low-income households if not carefully structured. Energy use often rises with climate (heating and cooling), housing quality, or regional availability of renewables. Without equitable subsidy mechanisms or progressive brackets, some families could face energy poverty. 2. Implementation complexity. Tracking and taxing every form of energy consumption—including distributed solar, battery storage, and off-grid systems—requires sophisticated infrastructure. Calibration errors, data privacy concerns, and cybersecurity risks could undermine trust and fairness in the system. 3. Economic disruptions. Industries reliant on cheap energy, such as manufacturing or data centers, may shift operations abroad to avoid taxes, reducing domestic employment. A sudden introduction of energy taxation could also drive inflation as businesses pass costs onto consumers. 4. Measurement and standardization problems. Different energy sources—gasoline, electricity, hydrogen—have distinct efficiencies and carbon footprints. Converting all into a uniform taxable energy metric would be technically demanding and politically disputed, particularly across borders. Balancing Efficiency, Equity, and Sustainability. To reconcile these issues, a gradual transition could help. Governments might phase in energy taxes while reducing income taxes, ensuring the overall burden remains stable. Real-time rebates or UBI adjustments could protect vulnerable groups and maintain purchasing power. International coordination would also be crucial to prevent economic flight and maintain competitiveness. Ultimately, an energy-based tax system offers a compelling vision of fiscal and environmental harmony: a world where humanity pays not for earning, but for consuming, and where efficient use of energy becomes both a moral and economic virtue. Yet its success depends on technological readiness, equitable policy design, and collective willingness to rethink the very foundation of taxation in the energy age.

It sure feels that the “sound money” investor is a very small group.

Is what has been happening with bitcoin, sideways action, what 1 bitcoin = 1 bitcoin feels like?

Bitcoin’s recent decoupling from both stocks and gold does not mark the end of its story; it marks a transition from a speculative “beta trade” into a monetary thesis in its own right. The very fact that it no longer obediently rises whenever tech stocks or precious metals rally is precisely what strengthens the case that, when the old pillars of portfolios begin to crack together, Bitcoin will emerge as the alternative vault for global savings. In this light, Peter Schiff’s latest proclamation that “the Bitcoin trade is over” is less a diagnosis of terminal decline than an illustration of how hard it is for incumbents of the old order to recognize the birth of a new monetary regime. Schiff’s critique rests on a simple pattern: if Bitcoin does not rally with tech stocks and does not rally with gold and silver, then it must be finished. Implicit in this logic is the assumption that Bitcoin’s legitimacy depends on tracking the performance of legacy assets, as if its only purpose were to be a leveraged sidecar to what already exists. But that is a misunderstanding of what a base money contender actually is. A new monetary asset does not prove itself by moving in lockstep with the assets it is ultimately meant to replace; it proves itself by surviving when those assets fail to provide the security they promised. In that sense, decoupling is not a bug but a prerequisite. For more than a decade, markets largely treated Bitcoin as a kind of hyper‑volatile tech stock with a mythology attached. It rode the same liquidity waves as growth equities, sold off when macro tightened, and often behaved like a high‑beta play on the broader risk cycle. At the same time, Bitcoin repeatedly flirted with a “digital gold” narrative, drawing comparisons to gold’s scarcity and independence from corporate cash flows, yet its price often failed to mirror gold’s defensive strength during acute periods of fear. This dual identity—part tech, part gold—kept it trapped conceptually: too wild to be a hedge, too monetary to be just another startup. The current break from both stocks and gold is the market’s way of resolving that contradiction. To see why this matters, consider how investors normally feel “hedged” within the existing system. When tech stocks soar, portfolios look healthy and risk feels rewarded. When fear rises and growth fades, gold tends to step in as the venerable, centuries‑old refuge, a metal whose reputation as a store of value is backed by tradition and war stories. As long as one of these two pillars appears to be doing its job, there is little urgency to reach for a new, politically neutral base money. The comfort of diversification—stocks for upside, gold for downside—keeps capital anchored inside the same underlying framework: claims denominated in, or settled through, the dominant fiat currency. However, that comfort is only as solid as the system beneath it. Stocks are ultimately claims on future cash flows in a currency that is constantly being diluted. Gold, outside of physical holders, is often mediated by layers of paper claims, exchange‑traded products, futures, and rehypothecated collateral that may not all be honored under extreme stress. A scenario in which both stocks and gold “work” less and less at the same time is not difficult to imagine: corporate earnings weakened by stagnation or recession, equity multiples pressured by higher risk premia, and gold constrained by policy measures, taxation, or the discovery that paper gold vastly exceeds readily deliverable physical metal. In such an environment, both sides of the traditional barbell begin to look like different flavors of the same risk: dependence on the state‑bank nexus and its credibility. This is where Bitcoin’s apparent failure to behave “correctly” in normal times becomes a strength in abnormal times. If Bitcoin were perfectly locked to tech, it would be nothing more than a speculative derivative on innovation and liquidity cycles. If it were perfectly locked to gold, it would add little that tokenized gold, gold miners, or traditional bullion do not already provide. By breaking from both, Bitcoin signals that it is being repriced as something else: a neutral, non‑sovereign, bearer asset whose long‑term value depends not on quarterly earnings or industrial jewelry demand, but on its role as a parallel monetary system. This transition is rarely smooth. Markets must experiment, discover correlations are unreliable, and eventually learn to price Bitcoin not as a satellite to other assets but as a separate gravitational center. Underneath all of this sits the architecture of the fiat world, with the U.S. dollar at its core. Over the past century, the dollar’s purchasing power has eroded, not by accident but by design. Money creation in the modern system is not neutral; it follows the contours of political power and financial proximity. Those closest to the source of new money—governments, large banks, major corporations—receive it first, while prices have not yet fully adjusted. By the time new money filters out to wages and small savers, asset prices and living costs have risen, leaving those at the periphery holding a weaker unit. This dynamic, known as the Cantillon effect, turns the reserve currency into a quiet engine of wealth redistribution. Calling cash (USD) the “king of distrust, delusion, and Cantillon effect” is therefore not mere rhetoric; it is a description of how the system behaves over decades. Savers are taught to trust a unit that steadily declines in value, while believing that nominal stability is the same as real safety. The delusion lies in confusing the ubiquity of the dollar with its fairness, and mistaking its legal status for moral legitimacy. In practice, every crisis is resolved through more issuance, more intervention, and a steeper hierarchy of winners and losers. Those who can borrow closest to zero enjoy asset inflation; those forced to save in cash absorb the loss. The “king” rules not by preserving wealth impartially, but by quietly taxing the future through dilution. Bitcoin’s core challenge to this order is simple and radical: it removes the throne. There is no issuer whose balance sheet expands and contracts at will, no committee that adjusts supply in response to short‑term political pressure. Its monetary schedule is transparent and inelastic, and its settlement is final without reliance on any particular government or bank. To those embedded in the fiat‑Cantillon world, this looks like a speculative toy whose price swings prove its unseriousness. To those who study monetary history, the volatility looks more like the birth pangs of a new unit of account, as free markets struggle to price an asset that does not bend to the usual levers of policy and credit. From this perspective, Schiff’s statement that “if Bitcoin won’t go up with tech, and won’t go up with gold, it won’t go up at all” reveals an attachment to an old paradigm. He imagines a world where Bitcoin’s only valid role is to hitch a ride on existing winners—where its failure to do so means its narrative has died. But if Bitcoin’s true purpose is to offer an escape from both the equity complex and the gold‑plus‑fiat complex, then the time when neither of those complexes inspires confidence is exactly when Bitcoin’s monetary function will be tested in earnest. In other words, the phase when Bitcoin no longer maps neatly to the performance of other assets is not the epilogue; it is the prologue. The break from stocks and gold, then, increases rather than decreases the probability that, in a future crash regime where both pillars wobble together, Bitcoin will be perceived as the remaining vault not claimed by anyone else’s liabilities. Investors searching for a place to store the residue of their trust will find that cash is explicitly designed to depreciate, that stocks are hostage to earnings and political conditions, and that most gold exposure is mediated through the same institutions that oversee the fiat system. Bitcoin, for all its imperfections, is the only large‑scale asset whose existence and scarcity do not depend on faith in those institutions. When the old king of money—USD under Cantillon rule—finally looks too naked to ignore, markets will not be searching for another subject inside the same court; they will be looking for a new kind of sovereignty entirely. Bitcoin’s independence from the price theater Schiff is watching so closely is exactly what qualifies it for that role.

If I’m reading Mr Schiff comments correctly. Bitcoin is on its own path……. Finally. “If Bitcoin won’t go up when tech stocks rise, and it won’t go up when gold and silver rise, when will it go up? The answer is: it won’t. The Bitcoin trade is over. The suckers are all in. If Bitcoin won’t go up, it can only go down. If HODLers are lucky it won’t be a slow death.” -Peter Schiff

Rotation

A Christmas message to Bitcoiners Throughout history, ideas that fundamentally challenge existing power structures are rarely welcomed by those who benefit from the status quo. Bitcoin, as a decentralized monetary network, finds itself in a position strikingly similar to that of early Christianity: rejected by central authorities, misunderstood by the masses, and sustained primarily by belief among ordinary people rather than endorsement from institutions. While one is a religious movement and the other a technological and monetary innovation, both illustrate a recurring pattern in human history—the collision between emergent belief systems and entrenched authority. Early Christianity arose within a world dominated by religious and political institutions that claimed exclusive authority over truth, law, and legitimacy. The Jewish Temple establishment and the Roman state both viewed Christianity as a destabilizing force. Its teachings bypassed institutional gatekeepers, asserting that spiritual access did not require intermediaries, wealth, or political alignment. This democratization of faith was profoundly threatening. It removed control from centralized authorities and placed it into the hands of individuals, communities, and conscience. Bitcoin similarly challenges modern centralized authority, not in matters of salvation, but in matters of money—arguably one of the most powerful instruments of social organization. Governments and central banks function as the “temple” of modern finance, defining monetary truth, legitimacy, and access. Bitcoin’s rejection by regulatory bodies and state actors mirrors the early institutional rejection of Christianity. It does not ask permission. It does not require trust in a central authority. Instead, it offers a system governed by transparent rules, voluntary participation, and cryptographic verification rather than institutional decree. Both Christianity and Bitcoin were initially embraced not by elites, but by ordinary people. Early Christians were largely drawn from the lower and middle classes, individuals seeking meaning, justice, and hope beyond imperial power and religious hierarchy. Likewise, Bitcoin’s early adopters were not governments or major financial institutions, but individuals disillusioned with inflation, financial exclusion, and systemic instability. In both cases, the appeal was not dominance but liberation—the ability to participate without needing approval from entrenched power. Mass rejection is another shared characteristic. New belief systems rarely enjoy immediate acceptance. Early Christianity was dismissed as heretical, irrational, and dangerous. Bitcoin today is often labeled a scam, a cult, or a tool for criminals. In both cases, critics frequently attack not only the idea itself but the character and intelligence of its adherents. This reaction is less about the merits of the belief and more about discomfort with its implications. If the system works, then the authority of existing institutions is called into question. Belief itself becomes the battleground. Christianity required faith in a message that could not be empirically proven within the frameworks of its time. Bitcoin similarly requires belief—belief that code can substitute for trust, that decentralized consensus can outperform centralized control, and that value can exist outside state decree. In both cases, belief is not blind acceptance but a commitment formed through conviction, experience, and community reinforcement. Finally, both movements demonstrate that belief will always be challenged by non-believers. Skepticism is not merely opposition; it is an inevitable response to any idea that reorders power. Christianity endured centuries of persecution before institutional acceptance. Bitcoin, still in its early stage, remains in its period of testing—socially, politically, and economically. Whether it follows a similar trajectory is unknown, but the pattern is familiar. In conclusion, Bitcoin’s resemblance to early Christianity lies not in doctrine, but in structure and reception. Both emerged outside institutional authority, appealed to the common person, threatened centralized control, and survived through belief rather than permission. History suggests that such ideas are not extinguished by rejection; instead, they are refined by it. Whether spiritual or monetary, belief systems that resonate deeply with human values tend to persist —often long after their critics have faded into footnotes. I for one am staying in the catacombs of self-custody.

If l go to a Square merchant, and he ask me why should he turn on his POS to take bitcoin. Yes he gets a credit card savings, Yada Yada Yada. But what is the most succinct reason. Going to do a little “missionary” work this week.

Spending Inflationary Currency in an Era of Monetary Transition For nearly a century, the U.S. dollar has served as the global reserve currency—a position earned through military power, industrial production, and geopolitical dominance. But over that same period, the dollar has lost over 90% of its purchasing power. Goods and services priced in dollars have steadily risen not because their intrinsic value increased, but because the currency measuring them declined in value. Inflation is a quiet tax, a continuous dilution of individual saving power in exchange for state-controlled liquidity. In such a system, the rational economic actor learns a simple truth: spend inflationary money before it degrades further. Holding dollars long-term is akin to holding melting ice—the longer one waits, the less remains. Spending becomes not only a consumption habit but an investment decision against future loss. For those who understand this mechanism, spending fiat currency is a strategy, not simply an indulgence. It reflects the awareness that idle cash depreciates as governments expand monetary supply through debt issuance and quantitative easing. Bitcoin’s Contrasting Dynamic Bitcoin emerged as a counterweight to precisely this inflationary system. With a fixed supply of 21 million coins, Bitcoin’s issuance curve is transparent and predictable—beyond the control of central banks or nation-states. Over the past decade, prices for goods—measured in Bitcoin—have fallen steadily. This is not deflation in the harmful economic sense, but appreciation of purchasing power. A person who held Bitcoin rather than dollars experienced the opposite dynamic: the ice hardened rather than melted. Yet, since October 2025, Bitcoin has entered what might be called a temporary inflationary state—not because its supply increased, but because its price in USD declined. This apparent inflation is the mirror image of dollar strength, as fiat markets briefly regained relative value through tightening policies and liquidity shocks. When Bitcoin falls against the dollar, its purchasing power temporarily inflates for those using BTC as a pricing unit. But unlike fiat inflation, this is a market-driven repricing, not structural dilution. It will reverse as global liquidity cycles normalize and Bitcoin’s issuance schedule continues its predictable decline. The Relationship Between Fiat Inflation and Bitcoin “Inflation” At a macro level, Bitcoin’s inflationary moments are a reflection of fiat deflationary waves. Central banks can temporarily make the dollar stronger by reducing liquidity, increasing interest rates, or contracting credit. When this happens, all asset prices—including Bitcoin—decline relative to the dollar. Yet nothing about Bitcoin’s intrinsic properties changes; 21 million coins remain fixed. Fiat currencies, on the other hand, are designed to inflate over time. Even during “strong dollar” periods, the long arc of history bends toward devaluation because monetary policy depends on credit expansion. The state’s capacity to issue more units ensures that wealth continually moves from savers to spenders, from private citizens to public balance sheets. Bitcoin reverses that logic: it is a network where issuance is immune to decree, and thus over time it enforces a deflationary bias. The Long Arc Toward a Deflationary Global Currency If Bitcoin—or any neutral, globally adopted digital reserve asset—becomes the standard of value, the world will gradually shift into a deflationary monetary regime. Without a nation-state able to control money creation, the currency’s supply cannot be expanded to finance wars, bailouts, or political agendas. Prices, in such a system, would fall as technology and productivity increase—because money remains scarce while efficiency rises. This would reward savers rather than debtors and foster long-term investment rooted in value creation rather than credit expansion. A deflationary world currency, therefore, represents not just a financial transformation but a moral and civilizational one. It removes the power of arbitrary issuance and restores the discipline of time preference—rewarding those who plan rather than those who print. Until such a system becomes dominant, the strategic approach is clear: spend inflationary currencies while they still hold value, and save in deflationary assets whose supply cannot be tampered with. Adoption Through Strategic Spending Ironically, the same principle that applies to dollars should, at moments, apply to Bitcoin as well. When Bitcoin enters an inflationary state—when its price dips and purchasing power temporarily expands—spending Bitcoin becomes a strategic act of adoption. In these periods, using Bitcoin to buy goods and services seeds the economy with sound money. Merchants who accept Bitcoin during its lower phase end up holding it as it returns to its natural deflationary path, gaining direct exposure to its future appreciation. Thus, spending Bitcoin in its inflationary cycle is not a loss, but a transfer of opportunity. It distributes Bitcoin into broader hands, embeds it in commercial circulation, and accelerates the network effect that eventually restores its price and purchasing strength. In this way, rational actors help drive adoption by understanding the rhythm of Bitcoin’s monetary heartbeat—spending when it inflates, saving when it hardens, and thereby building the foundation for a deflationary world currency untethered from state control.

For the average pleb. Does bitcoin perform better when governments embraces it or fights it?

My sister doesn’t understand why I’m spending my bitcoin on burgers. It’s this simple. Bitcoin is a bottom up mechanism. I, the lowly pleb, transfer my bitcoin to a larger pleb, the small business. Bottom up monetary movement.

So my main frustration with ecash is the multiple Mints. The wallet say 2000 sats but that is split between two or 3 mints. So to drain the wallet a single lightning send out is not possible. This I think will be handled my the bank account.

Bitcoin Banks as Temporary Payment Hubs Bitcoin stands out as both an asset and a payment network. Yet its dual nature exposes a tension between security and convenience: long-term holders value self-custody for sovereignty, while everyday users need liquidity and speed for commerce. Bridging these priorities calls for a reimagined model of custody — not the traditional “bank” that takes permanent possession of assets, but a Bitcoin bank designed as a temporary payment hub. In this model, individuals retain ultimate ownership of their wealth while offloading small, transactional liquidity to trusted payment intermediaries for short durations. Traditional banks emerged to safeguard money and facilitate its movement within a centralized financial system. Depositors trust institutions to store, transfer, and lend their funds, a necessity born from the fragility of physical cash and the complexity of global transfers. Bitcoin challenges that foundation by granting individuals direct ownership through cryptographic keys, making custody optional. A “self-custodial” setup—a hardware wallet or multi-signature vault—manages this securely. However, sovereignty introduces friction: using funds on the Lightning Network or in fast micropayments requires liquidity channels and always-on technical management. For most users, handling these tools daily isn’t practical. That’s where the temporary Bitcoin bank enters. In contrast to the old-world institution designed to keep your money, a Bitcoin bank’s purpose is to move it efficiently and reversibly. These entities—whether ecash mints, Lightning custodians, or federations using technologies like Fedimint—function as liquidity relays, not custodians of long-term wealth. A user can shift a small, spendable portion of their Bitcoin into such a system for payments, shielding the remainder in cold storage. Once transactions complete, the remaining balance is swept back to self-custody. This process mirrors a cash withdrawal for weekend spending: a temporary delegation of transactional control without surrendering ownership. This model also enhances privacy and scalability. Ecash systems, for example, use blind signatures to obscure individual transactions from the mint itself, allowing payments with fiat-like anonymity. Lightning custodians, meanwhile, provide high-speed micropayments that settle instantly without congesting the base Bitcoin chain. In both designs, trust is minimized through transparency, auditing tools, and open protocols. The relationship becomes fluid: users “bank” with these services ONLY WHEN IN MOTION, NEVER AT REST. The philosophical shift here is subtle but profound. We move from asking, “Who holds your money?” to “Who helps your money move?” Traditional banks keep; Bitcoin banks facilitate. Temporary custodianship becomes an operational layer of monetary freedom—akin to a data network rather than a vault. By separating storage security from transactional convenience, Bitcoin users can experience the best of both worlds: uncompromised self-sovereignty and seamless payment agility. As Bitcoin matures, this approach may become the norm. Large holdings remain offline in self-custody. Smaller balances oscillate into temporary banks or federations to fund daily trade, subscriptions, or peer-to-peer commerce. These cycles of movement—buy, hold, deploy, return—mirror capital efficiency in financial systems but without the moral hazard of opaque intermediaries. The “Bitcoin bank” thus isn’t a relic of the old system; it’s a pragmatic evolution of it, built to respect personal custody while enabling frictionless payment flows.

https://money-gif.shakespeare.wtf/ Checking out Shakespeare with a simple gif build.

One question. If the internet had a financial component would you buy it?

Very curious what this weekend action does to IBIT flows.

The banking system is deep. Using a Lansky playbook. Breaking competition legs with many different pipes. I think that if a mass of bitcoin is used to pay for goods and services...... Things will get ugly. In the End I believe like 1907 the people will choose Big Brother over freedom. Whatever shape Big Brother takes on the large screen. I hope not.