All the best Bitcoin Works read aloud so that you can listen. This is a crypto Connie quick read. All right, guys, welcome back to the crypto gonna me with guys Swan. That is me. The guy who has read more about Bitcoin than anybody else. You know, we have a quick read today and I am skipping. I'm doing a bad. I am not going to do the gradually then suddenly series in order like I have so far. I'm actually skipping the last Sorry to hit the most recent one because it's just that good it is again, this is Parker Lewis has series gradually then suddenly and it is all on the Unchained Capital blog, which I have a collection of all of the works that I've read just from that blog. If you go to the Crypt economy.com, but let's go ahead and jump into this piece. It is titled Bitcoin obsoletes all other money. When it comes to bitcoin adoption, there are generally two rules that never seem to fail everyone always feels late and everyone always wishes. They had bought more Bitcoin. There are exceptions to every rule but Bitcoin has an uncanny ability to screw with the human psyche. It turns out that 21 million is a scarily small number and it actually becomes smaller as more individuals come to understand that the fixed supply of Bitcoin is credibly enforced and that monetary networks Converge on a single medium. Demand for Bitcoin is driven by The credibility of its monetary properties and the convergent nature of money, but increasing demand for Bitcoin reinforces, the scarcity of Bitcoins fixed Supply as it does Bitcoin becomes more valuable as a monetary medium while this becomes evident the further down the Bitcoin Rabbit Hole one travels. It is not uncommon for individuals on the periphery to be overwhelmed. The sheer number of cryptocurrencies. Sure Bitcoin is in the lead today, but there are thousands how do you know Bitcoin is not my space? How can you be sure it's something new doesn't overtake Bitcoin. It may sound crazy to believe that Bitcoin will be the dominant Global Currency and it likely would be if evaluating the possibilities from a top-down probability weighted perspective today Bitcoin is one of a thousand plus competing digital currencies that all look the same on the surface its purchasing power of a hundred and fifty billion dollars is a drop in the bucket compared to the Global Financial system, which supports 250. In dollars of debt gold alone has a purchasing power of 8 trillion dollars 50 times the size of Bitcoin. What are the chances that an eleven-year-old internet sensation Rises From the Ashes of the 2008 financial crisis and goes from nothing to becoming the dominant Global Currency. The idea sounds laughable or at the very least. It appears to be too low of a probability to Warrant consideration. However, when starting from the bottom up and developing conviction around a few foundational principles the noise of a thousand cryptocurrencies Fades to the background when added together just a few foundational principles create Simplicity and Clarity around what once may have seemed too complex to possibly discern If someone had to evaluate one thousand possibilities to come to the right conclusion, it may not be practical or possible. But if you could eliminate 999 of those possibilities based on one or a few starting first principles, then becomes more practical to arrive at a coherent answer. Is money a basic necessity? Yes is money a collective hallucination. No do economic systems Converge on a single form of money. Yes. Will the world Converge on bitcoin. Well is Bitcoin more scarce than any other form of money? Yes is Bitcoin more easily divisible than any other form of money? Yes is Bitcoin more easily transferable than any other? more money, yes world domination check This is the roadmap to cutting out the noise and focusing on what really matters individuals may come to different conclusions concerning any of these questions, but this is the past to consider when attempting to understand why Bitcoin consistently out competes all other currencies and whether it will continue to do so money is a basic necessity, but it is not a collective hallucination nor is it a shared belief system? Individuals adopt Bitcoin because it possesses unique properties that make it Superior as a form of money relative to all other currencies because money is a solution to an intersubjective problem monetary systems tend to converge on a single medium or rather economic systems naturally emerge from a single medium due to the function of money. The properties inherent in Bitcoin are causing the market to converge on it as a tool to communicate and measure value because it represents a step function change in provement over any other monetary medium if anyone comes away with the fundamental view that money is a necessity and that monetary systems naturally converge. The questions in centers on whether Bitcoin is optimized to fulfill the monetary function better than any of the competition. Money is a necessity. Civilization as we know it would not exist without money without money. There would be no airplanes no cars. No iPhones and the ability to fulfill very basic necessities would become materially impaired millions of people could not peacefully inhabit a single city state or country without the function of money money is the economic good that allows food to reliably show up on grocery shelves. Gasps to be at the gas station electricity to power homes clean water to be abundant Etc. It is money that makes the world turn and it would not turn into way that most have taken for granted. If not for the function of money. It is a massively underappreciated function one that is poorly understood because it is generally not consciously considered in the developed World reliable money is taken as a given. So too are the basic necessities delivered through the coordination function of money consider, for example, a local grocery store and the range of choice that converges in a single store the number of individual contributions in That are required to make that happen is mind-boggling from the coordination of the store itself to the individual packaging to the technology providers to the logistics Network to the transportation networks to the payment systems and right down to each individual item of food. Then as a derivative consider all the unique inputs that go into each item on the Shelf. The grocery store is just the Fulfillment side. The production of each input has its own diverse supply chain and it is just one Modern Marvel deconstructing the inputs of a modern Telecom Network energy Grid or water and waste management system is similarly complex each Network and the participants there in Lie on all the others producers of food rely on individuals that help fulfill energy demand Telecom Services Logistics clean water etcetera among others and vice versa practically all networks are connected and it is all made possible through the coordination function of money. Everyone is able to contribute their own skills based on their own personal interests and preferences receive money. In return for Value delivered today and then use that same money to acquire these specialized value created by others in the future. And it does not all happen by chance either some not. So rigorous thinkers suggest that money is either a collective hallucination or that it derives value from the government in reality money is a tool that was invented by man to satisfy a very specific Market need in facilitating trade money helps facilitate this activity by acting as an intermediary between a series of present and future exchanges. Without any conscious control or Direction Market participants evaluate various different goods and Converge on the tool with the properties best suited to facilitate the very Express purpose of converting present value for future value. Whereas individual consumption preferences vary from person to person and change constantly. The need for exchange is practically Universal and the function is distinctly uniform. ERM for every individual money allows for Value produced in the present to be converted into consumption in the future the value when places on a home a car food Leisure Etc naturally changes over time and logically varies from person to person but the need to consume in the need to communicate preferences does not change and applies to all individuals on an intersubjective basis. Money exists to communicate these preferences and ultimately value but recognizing that all value is subjective and not intrinsic money forms the base line to establish an expression of value and more importantly relative value. Money represents the collective recognition that everyone benefits from the existence of a common language to communicate individual preferences it Aggregates and measures the preferences of all individuals within an economy at any point in time and it would not be possible or at the very least extremely inefficient to communicate value. If not for a common constant upon which everyone could agree. Think of money as the constant against which to measure all other Goods. If it did not exist everyone would be at a practical stand still not able to agree on the value of anything by comparing against a single constant it then becomes more practical to discern the relative value of two other Goods. There are billions of goods and services produced by billions of individuals always unique preferences through the convergence on a single form of money to Aggregate and communicate all preferences a price system. Ultimately emerges by measuring and expressing the value of all Goods in a common intermediary money it then becomes possible to understand how much one good or resource is valued relative to any other. Without the use of a common currency there would be no concept of price and without the concept of price. It would not be possible to do any range of economic calculation. The ability to perform economic calculation allows individuals to take independent actions relying on the information communicated through a price system to best satisfy their own needs my understanding the needs of others. In fact, it is a price system that allows supply and demand structures to form and it is ultimately a necessity because it provides for the communication of information without which the Fulfillment of basic needs would not be. Possible. Imagine if nothing you consumed had a discernible price. How would you know what you needed to produce in order to obtain the goods you prefer then recognize that your own conception of the value you produce and the Very existence of goods and services produced by others would not be available. If not for some expression of price existing. It becomes circular but money is the good that allows the underlying structures of an economy to to form through the price system while it is often extolled as the root of all evil money may just be the greatest accidental invention ever created by man and one that could not have emerged by conscious control. quote I've deliberately used the word marvel to shock the reader out of the complacency with which we often take the working of the price mechanism for granted. I am convinced that if it were the result of deliberate human design and if the people Guided by the price changes understood that their decisions have significance far beyond their immediate aim, this mechanism would have been acclaimed as one of the greatest triumphs of the human mind. It's Misfortune is the double one that it is not the The any human design and that the people Guided by it usually do not know why they are made to do what they do. But those who clamor for conscious Direction and who cannot believe that anything which has evolved without design and even without our understanding of it should solve problems, which we should not be able to solve consciously should remember this. The problem is precisely how to extend the span of our utilization of resources beyond the span of the control on anyone mind and therefore how to dispense with the need of conscious control and how to provide inducements which will make the individuals do the desirable things without anyone having to tell them what to do end quote fa Hayek the use of knowledge in society. Society economic systems Converge on a single monetary medium late stage Silicon Valley thinking has many people believing that hundreds. If not thousands of currencies may exist in the future. The machines are going to do all the calculation Ai and Quantum will handle it an intellectually safe view to hold is that 95% of cryptocurrencies will probably fail but there are some interesting projects. It is inherently difficult to know which will succeed much like Venture Capital investing most will fail. But the ones that win we'll win big at least this is what most of Silicon Valley would have you believe because it is a defensible parallel to historical experiences investing in companies. In reality. It is a blanket hedge lacking in first principles. It is also applying a familiar formula to an entirely distinct class of problem. While it may seem logical to form a mental framework around Bitcoin in relation to the rhyming history of Technology startups. There can be no comparison whatsoever Bitcoin is a money not a company it would be illogical to assume competition between two monetary mediums or multiple would be in any way parallel or would follow a similar pattern to that of two companies companies compete in a capital formation arms race in order to You so they need money to coordinate economic activity. How do they get money by using money to coordinate the production of goods and services and by selling the output for more money profit in essence companies compete for the same pool of money in order to accumulate capital. Money is the tool that makes the wheel go round. It simply would not be possible to coordinate all the individual skills necessary in order to allow for the Fulfillment of goods and services derived from the complexity of most modern Supply chains without money. It also would not be possible. If it were not for the fact that a large group of people accepted a common form of money. Quote adding a single medium of exchange allows the size of the economy to grow as large as the number of people willing to use that Medium of exchange the larger the size of the economy the larger the opportunities for gains from exchange and specialization and perhaps more significantly the longer and more sophisticated the structure of production can become end quote say 15. Ominous the Bitcoin standard. In the supply chain of production money serves a distinct function of a different class than any individual good or service. It is the distinction between the Fulfillment of preferences production of goods and services and the coordination of preferences money. The Fulfillment of preferences is dependent on the coordination of preferences and the coordination of preferences is dependent on a price system which can only form as a derivative of mass convergence on a single monetary medium. Without a pricing system division of labor would not exist at least not to the extent necessary to allow for the functioning of complex Supply chains. This is the root level principle most miss when contemplating a world of many currencies. Any pricing system is derived from a single currency. The concept of price would not exist. If not for a critical mass of individuals producing a diverse set of goods and services and communicating the value of those goods and services through a common medium. In order to derive the benefit of money and price convergence is a precursor. As a result it may be more accurate to say that the economic systems emerge from a single monetary medium rather than Converge on one individuals Converge on a single monetary medium and the output is an economic system. Whereas the value of all other goods and services is consumption. The value of money is exchanged exchange is the good the any individual is purchasing when choosing to convert value the subjective output of time labor and physical capital into a monetary good individual consumption preferences are unique but money serves One Singular function for all Market participants to bridge the present. To the Future whether it be for a day a week year or longer in any exchange of present value some time continuum exists until a future exchange at the point of exchange. Each individual must make a decision as to which monetary Good Will best serve the function of preserving value created in the present into the future A or B while an individual can choose to hold one or multiple currencies one is definitionally going to perform that function more effectively one will preserve future purchasing power better than the other everyone intuitively understands this and makes a decision based on the inherent properties of one medium relative to another When deciding which monetary good to use the preference of one individual is impacted by the preference of others. But each individual is making an independent evaluation Discerning the relative strength of multiple monetary Goods. It is not coincidence that the market converges on a single medium because each individual is attempting to solve the same problem of future exchange, which is interdependent on the preference of others. The ultimate goal is to reach consensus such that each individual can communicate and exchange with the widest and most relevant set of trading partners collectively. It is an objective evaluation of tangible goods based on an intersubjective need the whole point is to find one good that everyone can agree is one a relative constant to measurable and three functional in exchange. The existence of a constant creates order where none existed previously, but that constant must also be functional as both a measurement tool and a means of exchange. It is the combination of these characteristics often described as aggregating the properties of scarcity durability fungibility divisibility and transferability which are unique to money very few goods possess all of these properties and every good is unique. With inherent properties that calls each to be better or worse in fulfilling certain functions within an economy. A is always different than b and the combination of properties that perfect a monetary. Good are so rare that the distinction from one to another is never marginal. More practically everyone agrees on a single monetary good through which to express value because it is in their individual and Collective interests to do. So, it is the problem itself how to communicate value with other Market participants. It would be counterproductive to the entire exercise. If a consensus were not formed But it is the properties of a monetary good itself that allow for convergence and consensus. The imagined world of thousands of currencies is blind to these fundamental first principles a critical mass of individuals converging on a common medium is the input required to ascertain the information that is actually desired and the value of a common medium only increases in value as more and more people converge on it. as a tool to facilitate exchanges The fundamental reason being that with more individuals converging on a single medium the medium actually accumulates more information and presents a greater utility. Think of each individual as a potential trading partner as individuals adopt the common Medium as a standard of value all existing participants in the monetary Network gained new trading partners as do the individuals that become part of the network. There is mutual benefit and ultimately the range of choice expands, but what also occurs as a monetary Network expands is that more goods come to be valued in the common medium of exchange more prices exist and as a result more Relative prices do as well. More information is aggregated into the common medium, which can then be relied upon by all individuals within the network and by the network as a whole to better coordinate resources and respond to changing preferences the constant becomes more valuable and inherently more reliable as it communicates more information about more Goods produced by more individuals. The constant actually becomes more constant. More variable information is communicated through it. chart of the network adoption and possible network connections So with 10 million users, there are 50 trillion number of possible connections. If you 10x those 10 million users to 100 million your network connections go from 50 trillion to five quadrillion, which is a 100x in the number of connections. Make a 10x Improvement to the adoption again from 100 million users to 1 billion users. And again, your number of network connections are 100x from five quadrillion to Five Hundred quadrillion. As adoption of a monetary Network increases by an order of magnitude 10x possible network connections increase by two orders of magnitude 100x while this helps demonstrate the mutual benefit of adoption. It also highlights the consequence of converting value into a smaller monetary Network. A network that is 1/10. The size has 1% of the number of potential connections. Not every Network distribution is equal but a larger monetary Network translates to a more reliable constant to communicate information greater density more relevant information and ultimately a broader range of choice. The size of a monetary Network and the expected growth of that Network become critical components of the intersubjective A/B test when each individual is determining which medium to utilize while the number of people with whom any individual can maintain social relationships is inherently limited the same limits do not apply to monetary Networks. It is money that allows humans to break from the constraints of dunbar's number in monetary Network allows for Millions. If not hundreds of millions of people unknown to each other to contribute value and in points in the network with relatively few direct connections needed. Monetary networks, ultimately accumulate the value of all other networks because all other network effects would not exist without a monetary Network complex networks cannot form without a common currency to coordinate the economic imputs necessary to kick-start the positively reinforcing feedback loops of price. A common currency is the very Foundation of any monetary Network which allows other value networks to form. It provides the common language to communicate value ultimately leading to trade and specialization and organically creating the ability to expand the use of resources beyond the reach of conscious control to steal Hayek. When contemplating the network effects of a social network a logistics Network a telecom Network energy grid etcetera add them all together and that is the value of a monetary Network a monetary network. Not only provides the foundation for all other value networks to form, but the currency of that network is what pays for access to all derivative networks within the monetary Network. The existence of the common currency is the engine and the oil. Yes, the dollar euro Yen pound Frank one rule Lyra peso etcetera all coexist today, but this is not a natural function of an open global economy instead each fiat currency that exist today emerged as a fractional representation of gold which the world had previously converged upon as a monetary standard none would subsist without the forces of government intervention. Vention nor would any fiat currency have ever emerged? If not for the prior existence and limitations of gold as a monetary medium. Modern monetary theorists and gold bugs alike will never admit it but the Calamity that is all Fiat systems is nothing more than a manifestation of Gold's failure as a monetary medium. It is a dead man walking the gold standard was formerly abandoned in 1971 and the subsistence of jurisdictional Fiat systems since then merely represents a transient departure from free-market. three forces Modern Fiat systems have only managed to survive as long as they have because the solution to the very problem created by Fiat did not yet exist Bitcoin. Is that solution and ever since his creation individuals have been converging upon it as a new monetary standard a trend that will only continue as knowledge naturally distributes. all roads Converge on bitcoin All right. I've got to take a break here. Whoo. This is really good. We're a little bit over half way, I think. Yeah, just just barely over halfway. So let's go ahead and get our sponsor and then we will jump back in on all roads Converge on bitcoin. For anyone who has a podcast anchor cannot be beaten particularly for trying to get off the ground their entire platform is free. This includes unlimited hosting both in audio that you upload and how much your listeners download. I have uploaded an incredible library of audio now and I've never paid anchor a dime. In fact, they connect me with other sponsors and have run an ad consistently on my show. So they've paid For exposure to my audience that's really hard to beat even if we ignore that I can record directly in the app or my browser. I don't need any other software. If I don't want it I can edit at sound effects clips and they automatically publish to all of the top podcasting platforms. I never had to do a thing. So if you were thinking of starting a show or already have a podcast, there's no better platform out there check out anchor by downloading the app or go to Anchor dot f fem today all roads Converge on bitcoin the greatest constant finite scarcity the market converges on bitcoin overtime and its value continues to increase because it provides a constant. It is superior to any other form of money Bitcoin has an optimal monetary policy and that policy is credibly enforced on a decentralized basis. Only 21 million Bitcoins will ever exist in the element of trust is removed from the equation entirely. Bitcoins fixed Supply is enforced by a network consensus mechanism on a decentralized basis. No one trusts anyone and everyone enforces the rules independently as an aggregate of these two functions Bitcoin is becoming the scarcest form of money that has ever existed. By Night scarcity is a property. No other form of money has ever or will ever achieve and demand for Bitcoin is fundamentally driven by that scarcity. However, scarcity is a two-sided equation a fixed Supply may be the primary drawl but demand is a critical and often overlooked aspect of scarcity demand is actually what makes scarcity a utility as a constant in exchange Bitcoin becomes more and more scarce as a two-way. Action of increasing demand and a completely inelastic terminal Supply the scarcity of its fixed Supply creates demand but increasing demand then creates greater scarcity. It sounds circular because it is if there were 21 million Bitcoins in only one person valued it there would be nothing scarce or useful about Bitcoin, but if 100 million people valued Bitcoin 21 million starts to become scarce and if the network grew to 1 billion people 21 million would become extremely scarce and Bitcoin would represent a greater utility as a constant. With a fixed Supply increased demand naturally results in Bitcoin becoming more distributed. There is only so much to go around and the pie ends up getting split up into smaller and smaller shares owned by more and more people as more individuals value Bitcoin the network not only becomes a greater utility. It also becomes more secure. It becomes greater utility because more people are communicating in the same language of value through a more reliable. Constant and as more individuals participate in the network consensus mechanism the entire system becomes more resistant to corruption and ultimately more secure. recognize that there is nothing about a blockchain that guarantees a fixed Supply and Bitcoins Supply schedule is not credible because software dictates it to be so instead 21 million is only credible because it is governed on a decentralized basis and by an ever-increasing number of network participants 21 million becomes a more credibly fixed number as more individuals participate in consensus and It ultimately Becomes a more reliable constant as each individual controls a smaller and smaller share of the network over time. As adoption increases security and utility work in lockstep consider the distribution and relative density of Bitcoin adoption throughout the world heat map below of the network nodes as reach and density within each market spread Bitcoins constant becomes harder and harder. As individuals increasingly opt-in 21 million becomes more and more credible. And in the mind of those who adopt it finite scarcity becomes what differentiates Bitcoin from all other forms of money both Legacy currencies and competing cryptocurrencies alike. All other currencies either centralized overtime, for example, the dollar euro Yen gold or were too centralized from the start example all other cryptocurrencies to credibly compete with a fixed supply of 21 million. Centralization inherently creates the need to rely on trust and Trust ultimately puts the supply of any currency at risk which in turn impairs demand and marginalizes its utility in the function of exchange. Whereas all other currencies depend on trust be constant Bitcoin provides is trustless 21 million is only credible because Bitcoin is decentralized and Bitcoin becomes increasingly decentralized overtime. The best any other form of money could possibly do is match Bitcoin, but practically it is not possible because individuals Converge on a single medium and Bitcoin beat every other currency to the punch, every other currency is ultimately competing against the ideal constant one that will not change and that does not rely on trust. all forms of money compete with each other for every exchange if the primary or sole utility of an asset is the exchange for other goods and services and if it does not have a claim on the income stream of a productive asset such as a stock or a bond, it must compete as a form of money as a consequence any such asset is directly competing with Bitcoin or the exact same use case and no other currency will ever provide a more reliable constant because Bitcoin, The exists and it is finite because individuals Converge on a single medium scarcity and Bitcoin will perpetually be reinforced on both the supply and demand side whereas the opposite force will be in effect for all other currencies due to the reflexive nature of monetary competition. The distinction between to monetary Goods is never marginal and neither is the consequence of individual decisions to exchange in one medium rather than another money is an intersubjective problem and a choice to opt into one monetary medium is an explicit opt out of the other which in turn causes one network to gain value and utility at the direct expense of another as Bitcoin becomes more scarce and more reliable as a constant other currencies become less scarce and more variable monetary competition is zero sum and It's scarcity a dynamic function of both supply and demand creates the fundamental differentiation between to monetary mediums the only increases and becomes more apparent over time. But remember that scarcity for the sake of scarcity is not the goal of any money instead the money that provides the greatest constant will facilitate exchange. Most effectively the monetary good with the greatest relative scarcity will best preserve value between present and future exchanges over time relative price and relative value of all other Goods is the information actually desired from the coordination function of money and in every Exchange. Each individual is incentivized to maximize present value into the future finite scarcity and Bitcoin provides the greatest assurance that value exchanged in the present will be preserved into the future and is more and more individuals collectively identified that Bitcoin is the monetary good with the greatest relative scarcity stability and its price will become an emergent property. See Bitcoin is not too volatile Link in the show notes. the greatest measurement tool divisibility while scarcity is the Bedrock not all scarce goods are functional as money in order to be functional as a tool to communicate value in monetary. Good must be a relative constant easy to measure and functional in exchange. a ruler may be an effective measurement tool but rulers are not scarce nor is it easy to carve out pieces of a ruler into larger and smaller units to facilitate Exchange in exchange a monetary good being scarce and measurable allows for the measurement of all other Goods the ability to easily subdivide and transfer a monetary unit provides for practical utility in exchange Bitcoin combines finite scarcity with the ability to subdivide each whole Down to eight decimal points 0 point 0 0 0 0 0 0 0 1 or 1 100 millionth of a Bitcoin and transfer any amount of value. However large or small. Just as scarcity for scarcity sake is not necessarily valuable in the context of money. Neither is the property of divisibility. It is the combination that becomes valuable in the context of money particularly when each subdivided unit is fungible when each individual unit is essentially interchangeable and each of its parts is indistinguishable from another part. It is these properties together that allow Bitcoin to not only be a perfect constant, but also an effective measure of value to facilitate Exchange in the code one Bitcoin is actually represented as 100 million subunits with the smallest unit referred to as a Satoshi or sad for short technically one Bitcoin is 100 million SATs while one big one equates to approximately 9,000 dollars today one Satoshi is equal to 1/12 of a penny in essence anyone can exchange any amount of value into Bitcoin Bitcoin as with any money is For one purpose to store value between a series of exchanges receive Bitcoin for Value produced today save spend Bitcoin in the future in return for Value produced by others. It will perform the same function regardless of amount. The Practical consequences of divisibility is that Bitcoin is capable of measuring any and all value which allows it to support any and all adoption. Individuals produce a wide range of value and divisibility allows all individuals to utilize Bitcoin as a savings mechanism regardless of whether it be to store fifty dollars or fifty thousand dollars in value for monetary good to be an effective communication tool. It must be able to measure the range of value produced by all individuals and Bitcoin. Does this flawlessly the ability to divide and transfer any amount of Bitcoin makes it accessible to all individuals and ultimately all Goods produced regardless of how much value is attributable to each in the A or B test of monetary competition if a is greater than b any amount of a will perform the function of money better in any amount of be over time a will increase in purchasing power relative to be whether it be for fifty dollars or fifty thousand dollars worth of value never be confused by a list of cryptocurrencies trading on coinbase that look like a better deal because the price Is cheap whereas Bitcoin appears expensive always remember that Bitcoin is capable of being divided into smaller or larger units to store more or less value one Bitcoin isn't inherently arbitrary unit as is one unit of any currency. The market test is whether a is more functional as money than b it is an intersubjective decision. And while the market is communicating which network it believes. It performs a monetary function more effectively through price and value Network value is the output not the input. The input is each individual evaluating the properties of the monetary good itself relative to others. If Bitcoin is a in your evaluation, then there is no too expensive Bitcoin may be over or under valued at any point in time. But each individual that adopts Bitcoin increases the value of the network recall the discussion on trading partners and network connections and the ability to be divided easily into very small units allows for a practically Limitless number of individuals to convert and communicate. value through the network if a is greater than b and if a can support unlimited adoption eventually obsoletes the need for Network be as individuals independently evaluate this A or B test more people ultimately adopt Bitcoin and Bitcoin becomes divided into smaller and smaller units on average. This is the result of increasing demand combined with a fixed Supply and the value of the network actually increases as a function of this process as a network Bitcoin becomes more valuable as it is valued by more people. A 0.1 Bitcoin equals a thousand dollars is more valuable than one Bitcoin equals the thousand dollars despite each being worth the same measured in dollar terms more exchange and ultimately more Commerce becomes possible the more valuable Bitcoin becomes in total but value is really an output of more and more people choosing to adopt Bitcoin as an exchange intermediary. Each individual owns a smaller and smaller nominal amount of the currency but the purchasing power of each equivalent unit increases over time with each exchange. Every individual is conveying his or her own value onto the network and is doing so at the direct expense of a competing monetary Network through this process a new price is determined specifics the value created in measured by each individual and as a result. Accumulates more information derived from a more diverse set of trading partners. While prices today may not yet be quoted in Bitcoin terms a pricing system is forming every time an individual converts value into Bitcoin. Even if dollars are an indirect intermediary value produced somewhere in the world distinct to a particular individual is expressed as a unit of Bitcoin as more and more people choose to do so and increasingly on a per individual basis that value converts to a smaller and smaller unit of Bitcoin on average. The consequence is that a smaller and smaller denomination of Bitcoin can be used by more people to transfer an equivalent amount of value. And as Bitcoin is measured by more people its ability to measure relative value only increases since Bitcoin can measure all value and can be adopted by a limitless number of individuals it practically obsoletes the need for any other value transfer network over the long term because the form of money with the lowest rate of change ultimately communicates more perfect information finite scarcity combined with divisibility creates an extremely powerful exchange intermediary Bitcoin has the lowest terminal rate of change possible due to its absolute scarcity and you can be divided to a fraction of a penny which will allow it to measure value far more precisely than any other currency. the greatest exchange tool transferability With this bass line the real knockout punch becomes the fact that Bitcoin can be irrevocably transferred over a Communications Channel without the need for any trusted third party as an intermediary. This is fundamentally different than digital payments in Fiat systems, which are dependent on trusted intermediaries in aggregate Bitcoin is a greater constant than any other form of money and is highly divisible and measurable while also capable of being transferred over the Internet try to identify a single other good that could possibly share of these properties finite scarcity greatest constant plus divisibility and fungibility measurement plus ability to send over a Communications Channel ease of transfer. This is what every other monetary good is up against as it competes for the convergent role of money practically. The only way to really appreciate the power of Such a rare Dynamic is through experiencing it firsthand any individual can access the network on a permissionless basis by running a Bitcoin node on a home computer the ability to power up a computer anywhere in the world and transfer a finitely scarce resource to any other individual without permission or Reliance on a trusted third party is empowering that hundreds of millions of people can do this in unison without anyone needing to trust other. The Serpent's in the network is near impossible to fully comprehend. Bitcoin is often described as digital gold. But really this does not do it justice Bitcoin combines the strengths of physical gold with the strengths of the digital dollar without the limitations of either gold is scarce, but difficult to divide and transfer while the dollar is easy to transfer but not scares Bitcoin is finitely scarce easy to divide an easy to transfer in their current forms both gold and all Fiat monetary systems are dependent on trust whereas Bitcoin is trustless Bitcoin optimized for the strengths and weaknesses of both which is fundamentally why the market is converging and will continue to converge on bitcoin to fulfill the function of money. Bitcoin obsoletes all other money if any individual comes to three principal conclusions one money is a basic necessity to money is not a collective hallucination and three economic systems Converge on a single medium that individual is going to more consciously seek out the best form of money. It is money that preserves value into the future and ultimately allows individuals to convert their own time and their own skills into a range of choice. So great that prior Generations would find it difficult to imagine freedom is ultimately what a reliable form of money provides the freedom to pursue individual interests specialization and the ability to convert the output of that value into the value created by others trade. Whether individuals consciously ask themselves. These questions are not they will naturally be forced to answer them through their actions. They will also arrive at the same answer as those that do the conscious and the subconscious arrive at the same place because the fundamental truths do not change and the function of money is singular to inter mediate a series of present and future exchanges and to provide the very Base Line to communicate Active value among a wide group of individuals it stand to benefit from trade and specialization money is a necessity. There are discernible properties that make certain Goods more or less functional in exchange and exchange is an inherently intersubjective problem. owning Bitcoin is becoming the cost of Entry to what will likely be the largest and most diverse economy that has ever existed between is global and it is accessible on a permissionless basis because Bitcoin becomes the common language of value for all participants anyone that is a part of the network will be able to communicate and ultimately trade with other network participants the more trading partners the greater the value each unit provides to the individuals holding the while there will likely always be jurisdictional friction that impedes trade access to the same common currency removes the root cause of friction in the communication of value and Bitcoins fixed Supply will allow its pricing mechanism to accumulate in communicate more perfect information with the least amount of distortion relative to any other form of money and as more individuals choose to store value in Bitcoin it it's fixed Supply becomes more credible and its pricing mechanism more reliable and relevant new adopters of a monetary Network both contribute value and realize value as a function of adoption, which is why it is not possible to be late to bitcoin nor will Bitcoin ever be too expensive. It does not matter how complex Bitcoin is at the end of the day Bitcoin becomes an A or B test the need for money is real and individuals will Converge on the form of money that best fulfills the function of exchange. No other currency in the world can ever be more scarce than Bitcoin in scarcity will act like a gravitational force driving adoption and communication of value. Today most billionaires do not understand Bitcoin Bitcoin is an equal opportunity Mindbender, but even those who do not understand Bitcoin will come to rely upon it. There are many fundamental questions Bitcoin is volatile seemingly slow challenges to scaling not commonly use for payments consumes. A lot of energy Etc stability is an emergent property that follows adoption and all other Perceived limitations will be solved as a function of the value that is derived from finite scarcity combined with the ability to measure divide and transfer value. That is the innovation of Bitcoin currency a has a fixed Supply currency B does not currency a keeps increasing in value relative to currency be currency a continues to increase in purchasing power relative to goods and services while currency be Does the opposite which one do I Want A or B make the right choice? Because the opportunity cost is your time and value all of the rest simply explains why individuals will increasingly opt for A over B, but in practice it all comes down to basic common sense and survival instincts Bitcoin obsoletes all other money because economic systems Converge on a single currency and Coin has the most credible monetary properties. Quote, I don't believe we shall ever have a good money again before we take the things out of the hands of government. That is we can't take it violently out of the hands of government. All we can do is buy some Sly roundabout way introduce something that they can't stop in quote F A Hayek. Views presented are expressly my own and not those of unchanged capital or my colleagues. Thanks to Wilco landfill Geiger for reviewing and for providing valuable feedback. Alright guys. I hope you enjoyed that one. That was again Bitcoin obsoletes all other money and there's a lot that I really would like to unpack this but I don't have a whole lot of time but they're just a couple of things. I wanted to bring up was a money blockchains and social scalability by Nick Szabo is one of there's a line in this that money is the tool that allows humans to break from the constraints of dunbar's number. It's about money as a as a social scaling mechanism as a way of obtaining social scalability and Parker Lewis really breaks down that concept without actually addressing the fact that that's the like the term itself social scalability. That's what he talks about it the idea that it is it is the tool which allows us to measure everything again so that we can trade and exchange and we can measure relative value despite the incredible intersubjectivity the lack of consensus about any other way to measure the value like my preferences and my skills, like what's valuable to me is not at all the same that's valuable to you or somebody else always remembered like I used to work in a photography studio and I would always think how could people spend this much money on pictures you just go take pictures, but then I think you know, they don't know how to use the Murmurs, they don't know how to use the equipment. They don't know where to get good prints. They don't know what it takes to get a good interesting shot and you know, all this stuff so like for someone something could be worth noting because you know, you know how to do it, but for someone else's time and skill set and speciality that they just don't have the time to learn that other skilled or do that other thing and because of that we need these, you know, add to that all of our other social problems are cultural. Visions are language divisions, etc. Etc. I mean this this list of number of things that prevent us from properly communicating is literally endless and money. Is that tool which allows us to cooperate in spite of it and he's I love his little nod to the you know, some people think money is the root of all evil and like this just not not the case is the greatest invention is the greatest emergent. Invention of humanity that adds I don't I don't I don't see how you would be able to Define it the the amount of value that it produces its it is why Society exists. Literally it is it is the foundation for civilization without it. There is no specialization without it. There is no division of labor without it. None of us could hope to have an ounce of freedom because our entire lives are just dedicated just to getting basic needs and without it. We can't this many people can't survive on earth like like without money all of its gone a stable a a stable reliable monetary good is critical to everything else we do. It is Step 1 and on top of that on top of that monetary system and economy is built and and he goes into that a lot. Who is that? I'm that was something that I didn't actually highlight this quote or copy and paste this quote. But there's something along the lines of it's not that economic systems Converge on one medium. They Converge on one money. It's that individuals converging on one money creates an economic system. I thought I thought that was a really interesting framing that it's a lost if you're not looking look at this from first principles, if you're not sitting in the right position and with the right perspective that that is absolutely the case and I think we're building an alternative economy. That is that is the crypto economy. That's where the whole concept come from comes from is it with this money? We're building something entirely new and building that thing is not a five-year process. This is not this is not a payment system with an app. This is this is an entire ecosystem. This is the internet 2.0 and for the same. reason that the internet wasn't done in 2010 Bitcoins not going to be done in 2030 and there's just so much to unfold and explore and learn what he's capable with this thing with this tool at our disposal to create new economic systems, and that's what we're doing and it truly is it In the greatest sense of the the core fundamentals the the fundamental properties of money. It obsoletes all other money it there is nothing that can compare to it today Fiat alternative cryptocurrencies. They are all deeply inherently centralized on ends. If you Parker Lewis has so many of the Great answers to all of these problems to in the previous gradually then suddenly series like Bitcoin is not too slow where he goes into how The difference between transfer and payments and how payments is the scarcity itself like the idea of achieving digital scarcity is a zero to one invention and payments is a 1/2 in invention and with a programmable platform. There's essentially no end to the Limit that we can extend the transactional in the payments capacity with layers and it brings back brings us back to the original concept of something that I bring up a lot about the difference between a broadcast and a unicast network in the necessity to have a unicast network. If there's ever in any sense going to be some degree of global scalability with a monetary Foundation like Bitcoin and then I think it's Bitcoin cannot be copied. It can be copy. That's the one it's not not Bitcoin blockchain. There's this whole series is wonderful by the way. And like I said, I've skipped three that we will actually go back to just because I really wanted to hit this one, but it's Bitcoin can't be copied that talks about how the decentralization is a trend. It's a maturation process and if you go back and you look at Bitcoin originally if you look at in the first two years the queen wasn't decentralized. Owen was highly centralized. There's a very small group of people. It was not battle-tested. It had multiple bugs that were not sorted out until later that were critical bugs on and make so the process of creating decentralisation of hardening. The currency was a very critical maturation process and therein lies one of the main elements as to why Bitcoin can't be copied is because it no longer has the environment And if you've got some sort of a specific like highly specific and highly centralized group that is in charge of it. You've inherently defeated a lot of the purpose of actually getting there and then no matter what what the project or network system thinks that it's specializing in whether it be smart contracts or dex's or defy. It all has to compete with the monetary properties of Bitcoin and that's what he gets to in this piece and also in the Bitcoin not blockchain part of this series. That if essentially if your monetary properties are not secure if your scarcity is not Paramount that the hope of competing with Bitcoin is impossible because you're you're competing on the wrong you're competing on layer 2. It's like it's like saying, you know, I have nicer have nicer looking rooms in my hotel that doesn't have a foundation that's going to stand up to a good gust of wind and and then in that same Measure is that not only do you have to compete with Bitcoin as money, but you also have to compete with Bitcoin with the monetary properties that make it more valuable because of its Network effect that I love the one of the really great pieces of this was that one Bitcoin if one Bitcoin equals a thousand dollars it that is less valuable than point one Bitcoin equaling a thousand dollars. So even No, both of those are $1000 the capability the amount that you can do the the the network of connections and the the breadth of goods and services and opportunities available to you in anima and economy or in a market in which Bitcoin is worth point one Bitcoin is worth $1,000 versus one Bitcoin being a thousand dollars. Is they are not equal they are the same amount of value, but they are part of two entirely different valued networks. And the second is is vastly more useful and that is its utility. So I just really love this piece and he goes into so many great elements of this but I just unfortunately don't have the time to unpack this anymore, but I wanted to go ahead and get this episode out because I was just a great piece another one in the continuation of the gradually than And we series I highly recommend all of the other ones that we have covered you can get them all in fact, if you just go to the Unchained - Capital blog Unchained - capital.com is the website but they've actually just got a link on the blog to my page with all the audio and then obviously all the written versions are right there on the blog so you can get to both of them straight from that page. And of course you can just go to the crypto economy.com and click on Collections and find it there as well. So thank you so much for listening. I am out today. I'm not sure. Let's see what I need to actually mention here. I got a couple new patrons in the last couple of days and thank you. Thank you. That was awesome, and you guys have not joined the Crypt economy telegram yet. So if you need the link shoot me a DM, but yeah join us if you want to and thank you. Thank you, so. To you guys and to everyone who is a patron to the show and supporting this and helping this actually bring in money for me. It's it's my love and I love doing this and it means a lot it you guys actually get value out of it. So thank you guys so much and if you want to become a patron that'll get you into the crypto economy crew telegram group and all it takes is as little as $1 a month on patreon.com / the crypto economy. And you will support me in my turning all of the best Works in Bitcoin and the crypto economy space into the audio versions they deserve. All right, guys, I think that is everything I don't forget about your bit block boom tickets. Again. That discount code is CC if you want to come and hang out with me there in August and yeah grab your copy of the audio book for canute's Van homes. Sovereignty through mathematics is on. If you would like your own version or your hard copy get that on Amazon. Thank you guys so much. I'll catch you next time until then. Take it easy guys.
"Money is an intersubjective problem, and a choice to opt into one monetary medium is an explicit opt out of the other, which in turn causes one network to gain value (and utility) at the direct expense of another." - Parker Lewis  Skipping around a little bit in the "Gradually, Then Suddenly" series, we read the most recent (#12) published on the Unchained Capital Blog. No, Bitcoin isn't a startup. No, there will not be many currencies. No, you can't create an alternative that doesn't compete with Bitcoin's monetary properties. The very problem of money is one of intersubjectivity, which can only be solved through convergence on a single monetary medium. Bitcoin. "Bitcoin Obsoletes All Other Money." https://unchained-capital.com/blog/bitcoin-obsoletes-all-other-money/  To check out the rest of the audio collection for the Unchained Blog, check out the site: https://thecryptoconomy.com/collections-new/  Also mentioned on the show was Nick Szabo's excellent piece, "Money, Blockchains, & Social Scalability." https://anchor.fm/thecryptoconomy/episodes/CryptoQuikRead_066---Money--Blockchains--and-Social-Scalability-e2ndsj  ---   This episode is sponsored by  · Anchor: The easiest way to make a podcast. 