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Some have asked me how the Bitcoindollar System would work, so I have summarized below the key takeaways from Chap. 22 of my book. β€’ Stablecoin issuers convert fiat reserves into T-Bills, increasing U.S. debt demand πŸ“ˆ. β€’ T-Bill yields are reinvested into Bitcoin, creating a positive feedback loop ♻️. β€’ Dollarized stablecoins spread globally as local currencies collapse πŸŒπŸ’΅. β€’ Bitcoin absorbs inflation as an inelastic monetary asset 🧲. β€’ U.S. sustains deficit spending while keeping the dollar exchange rate at sustainable levels βš–οΈπŸ’¬. β€’ Bitcoin becomes the global store of value, displacing gold, real estate, and stocks πŸ›οΈπŸ“‰. β€’ Nations that build strategic Bitcoin reserves gain a critical geopolitical advantage πŸ›‘οΈπŸͺ™. The future is a convergence of Bitcoin, the dollar, and global liquidity flows. The transition is already underway. image
2025-04-28 13:45:02 from 1 relay(s) 2 replies ↓
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The Deep Structural Flaw of the "Bitcoindollar" System: Why Hard Money and Soft Money Cannot Merge. Many are excited about the idea of merging Bitcoin's hard monetary properties with the global liquidity of the U.S. dollar system β€” sometimes called the "Bitcoindollar System." However, this vision contains a deep structural flaw: you cannot permanently merge hard money and soft money without eventually destroying one or the other. Here’s why: 1. Hard Money (Bitcoin) and Soft Money (Dollar) Are Anti-Systems Bitcoin is a closed, scarcity-enforced, decentralized system with no room for discretionary expansion. The dollar is an open, elastic, human-governed system based on trust, credit, and political power. These two systems react oppositely to economic stress: Bitcoin tightens naturally (scarcity rules). Dollar expands artificially (printing, credit expansion). Trying to integrate them sets up a deep contradiction that cannot resolve peacefully. 2. Scarcity vs. Elasticity: Economic Feedback Incompatibility In times of recession: Bitcoin cannot "stimulate" liquidity because it is strictly scarce. Fiat needs emergency liquidity injections to survive. If Bitcoin anchors a dollarized system, governments lose their core tool: printing liquidity. If governments remain interventionist, Bitcoin principles must be compromised. 3. Practical Scenarios Break Down Quickly If Bitcoin becomes a major reserve, crisis responses are crippled. If stablecoins are Bitcoin-backed, volatility collapses trust and reserve ratios. If Bitcoin is for saving and fiat for spending, Bitcoin naturally drains fiat economies over time. There is no permanent stable equilibrium here. Either Bitcoin undermines fiat gradually, or fiat authorities crush Bitcoin to preserve their system. 4. Gresham’s and Thiers' Law Under free choice, people save in the sounder money (Bitcoin) and spend the weaker one (dollar). Over time, fiat currencies are hollowed out as stores of value. This forces inflationary collapse, regime change, or monetary reset. 5. Philosophical Incompatibility Bitcoin prioritizes individual sovereignty. The dollar system prioritizes top-down societal management. Merging these is not just an economic contradiction, but a philosophical impossibility. 6. Conclusion: No Sustainable Bitcoindollar System At best, a "Bitcoindollar" phase may act as a temporary bridge. But ultimately, either: Bitcoin displaces fiat, or Bitcoin is neutered into a centrally controlled, compromised form. The endgame is a clear winner β€” not a hybrid. The future is not a fusion of Bitcoin and fiat. It is a transition β€” and a battle β€” between two entirely different visions of money and freedom. nostr:nevent1qqsza9ns7qlcrf93mp78dr5ck0dd9lm8kz9kcjwf7l48v8emndu485qpzamhxue69uhhyetvv9ujuurjd9kkzmpwdejhgtczyrgkvu5n6ha3s8qsljjdtwur8fwjzsjg4r38e0u5m66ej5pc3ecqgqcyqqqqqqgph6jdw
2025-04-28 14:50:51 from 1 relay(s) ↑ Parent 1 replies ↓ Reply
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2025-05-02 10:03:06 from 1 relay(s) ↑ Parent Reply