The success of bitcoin can be defined in two ways.
On the one hand, there is the success of bitcoin as an investment asset. On the other, there is the success of Bitcoin as a peer-to-peer electronic cash system.
The success of Bitcoin as a peer-to-peer electronic cash system will always guarantee the success of bitcoin as an investment asset.
The success of bitcoin as an investment asset does not guarantee the success of Bitcoin as a peer-to-peer electronic cash system.
The success of Bitcoin as an investment asset is the blue pill – It’s the decision to stay in a safe, predictable world and avoid confronting uncomfortable truths. Scaling and privacy aren’t just not needed, but seen as actual risks.
The success of Bitcoin as a peer-to-peer electronic cash system is the red pill – It’s the decision to break out of the Matrix and build a world where financial censorship becomes an impossibility, but it requires future updates to the protocol.
Since the notion that self-custody is undesirable for users has increasingly been floating around, let us make this very clear: If you do not take custody of your funds, you do not get to decide.
Replies (21)
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New to Primal here - tried to zap your post but getting an error saying I don't have enough sats, even though I loaded 31. Any tips? Love your content btw!
Thinking out loud here, so don't quote me on this. But ultimately doesn't Bitcoin's scarcity mean that even if people hodl and decide not to spend or sell the only option to get sats will start becoming demanding payment and salary in it? It may take a while at any significant scale, but eventually as it becomes the easiest way to stack, it will have no choice but to become a medium of exchange. Even if people seek it as a savings asset, they'll have to work for it.
In any case I agree that MoE should be the goal.
Some lightning minimum fee requirement I suspect. Try now.
Bitcoin base layer is a terrible payments network. Lightening is infinitely better. Here in the West, we don’t have a payments problem; we have a savings problem. That is the main value proposition of Bitcoin. Centralized fiat in general makes for a better payment network, but a shit savings technology.
SOV needs to come first before MOE ever has a chance of being widespread
Thank you! That worked! I see now how to change the default zap settings.
I struggle to see a future where a bitcoin that is as volatile as it is today is used for payments. I just can’t imagine anyone is okay with potentially losing 10-20% of their purchasing power in a week and, at times, 60-70% of their purchasing power in a few months. Any rational human wants a way to secure the purchasing power they need for the near future in a stable, relative to the things they need to buy, system. If you give anyone a wallet with a stable coin and bitcoin they will naturally use the stable coin to transact and use bitcoin for long term savings. That is to say they’ll see bitcoin as an investment given its volatility.
If this is a bitcoin wallet where the stable coin uses the bitcoin network that’s a great bridge to the future, IMO, as bitcoin’s P2P payments could continue to mature as volatility decreases until a point where the fiat-linked stables would become less popular and eventually useless. If people can put enough money in the wallet to buy groceries for a month and that number doesn’t change much if it’s bitcoin or a stable coin then they won’t care. At that point there’s no reason bitcoin isn’t the backbone of the global financial system.
All of that to say I don’t think it has to be one or the other. But the roadmap has to consider real world incentives and meet people where they are.
No. This is not binary.
I can and will use my cash however I wish.
Lambos now or HODL for decades.
Even the HODLers will spend their cash (BTC) when the producers of quality stuff refuse to take fiat.
Great article and not counter to my point at all actually
Thank you Paulo! I will read this tonight and reply with anything that I find interesting or have doubts on. 👍
Indeed, it was a counterpoint to
@npub12sxr...zzke's reply 🙂
ah, sorry!
This is exactly where the market can step in and guarantee prices. As an example, I sell items directly for Monero, priced in Monero, and I use the 365-day moving average to do so. As I sell her, my service is taking on the volatility. And for that risk, I use the 365 day moving average, which means that in fiat terms, sometimes my items are more expensive, and sometimes they are cheaper. Either way though, in Monero, my prices do not change rapidly.
If Monero were as well adopted as bitcoin then Monero would have the same problem.
People want USD. All around the world. Everywhere I go, except Japan, people want dollars. That’s what the market wants no matter how much you wish it didn’t.
Seems like stability is actually what people want. Canadians don't mind having Canadian dollars. British people don't mind having British pounds. And Europeans don't mind having the Euro. But people in Egypt definitely want dollars because the Egyptian pound is a crap currency and inflates too quickly. Stability is something Bitcoin does not have because people don't price items in Sats. Because Bitcoin is too expensive and unreliable to be used as peer-to-peer digital cash.
"The success of bitcoin as an investment asset does not guarantee the success of Bitcoin as a peer-to-peer electronic cash system."
I'd go further. It has effectively prevented BitCoin ever taking off as a day-to-day payment systems, outside of a niche of true believers. Once the tulip mania took off, the tokens became way too valuable to buy pizza with, and their value far too variable.
Now that the initial mania is over, a huge numbers of wealthy individuals and institutions are holding BTC as a speculative investment. It seems even less likely to work as an everyday payment system, and more likely to be the prototype for a federated clearing system between banks.
It cannot really work as a SoV if it's not a MoE
i think store of value should preceed liquidity. sov is the red pill. people will never exchange something worthless.
