Bitcoin’s Economy is Already Circular

This opinion editorial is by Aleks Svetski. He is the author of “The UnCommunistManifesto”, founder of The Bitcoin Times, and host of the “Wake Up Podcast With Svetski.” Bitcoin is the perfect money. It has all the functions and properties of money: Store of value (SoV), Medium of exchange (MoE), Unit of account (UoA). And it does this without any intermediary, government regulation or prudential oversight. Because it is a social technology, money is by definition the most important invention of humanity. Money is the way we measure and attempt to quantify complex things in the material realm. This includes time, energy, and material resources. But money also measures and attempts to quantify metaphysical things like “value,” reputation, and quality. Money is more than a “measuring stick.” It is also a communication network. Money is a medium that allows for higher order collaboration. It is essential for the creation of societies larger than a few hundred people. Without it, civilization cannot grow. We are now in 2022. It’s been 14 years since Satoshi Nakamoto published the white paper that outlined the future of global money. It’s a monetary unit that embodies all the elements of a global economic network. This is the answer to the question of circularity: When circularity? –> “As it becomes a necessity. “Necessity is not just the mother of invention, but the grandmother of all changes. “Major changes like Bitcoin are gradual, but measurable, developments that spread through society in a memetic fashion. It has become, to quote Stephanie Kelton, “points.” SourceIt has become meaningless and virtual, arbitrary, and pointless points that one group can get at the expense of all the other players in the game. Who are those players? Who are those players? It always catches up. Another example is the whole KYC/AML edifice and the absurd new mandates like “Travel Rule.” “Money exists so two parties who don’t know each other can trade the product of their labor for things each values more or less. “Knowing your customer” is fundamentally antithetical to the entire raison d’?tre of money and the scale it’s supposed to enable in society via efficient trade.Imagine all of the wasted resources that go into:Unnecessary complianceKnowing all of your customersReporting meaningless statistics for AMLLicensing and regulationsBureaucratic negotiations and lobbyingImagine how much more effective we could all be and how many resources we could save and allocate toward productive means if we were not forced to play this game. To make matters worse, consider how much privacy this whole “performance” compromises on behalf of all “customers”. See these two idiot companies in Australia, within a week of each other recently:SourceSource: Author’s emailIt’s crazy.Payments and financial privacy will not get better under the existing system. They will only get worse. Savings won’t be protected under the existing system. They will only continue to evaporate.This is all why Bitcoin’s necessity as the foundation of a new monetary and payments network is only going to increase, as will the magnitude of its circularity.There Is No Alternative.It will be driven just as much by the decline of the existing fiat system, as the zero to one evolution of money that Bitcoin represents.IncompatibilityOne of Bitcoin’s most important and, for many, compelling features is incompatibility, specifically with the status quo or legacy money and payments.Bitcoin is fundamentally unlike anything that currently exists and it is therefore by definition circular. Bitcoin can only move over the Bitcoin Network. Any bitcoin that appears to interact with the legacy system, or other “crypto networks”, is just paper bitcoin. The Bitcoin network is only useful if bitcoin can be moved on it. Bitcoin can only exist on the Bitcoin network. What more circularity could you want? This is not an interoperable shitcoin or an exchange. la FTX, BlockFi, or a digital database with points. It is a zero-to-one invention and discovery. It is a zero to one invention and discovery. They are fundamentally different and require input from the participants, much like activation energy in chemical reactions. As new “catalysts”, and other participants find themselves “energized enough” to change (as necessary), the movement cascades, achieving mass and scale. We will also take Bitcoin for granted in much the same way we take electricity, the internet, Uber, or social media for that matter. People laughed at the early electric pioneers, such as Nikola Tesla, George Westinghouse, and even Thomas Edison. They couldn’t imagine what we would need this mysterious power from God for other than lights. The internet was the same. The “greatest minds” couldn’t see beyond a fancy video and conference call medium. Some people saw the potential of online shopping, but this was only true for about two decades. It was initially seen as a way to make shopping easier, but that was only until about two decades later. Bitcoin is where the puck is heading. The legacy system loses because it fights a losing battle against Entropy and every move it makes to save itself is actually a move towards its own demise. It’s over for fiat. It’s going to take what seems like an eternity to any one person, but it’s actually a very short time on a civilizational scale. These opinions are not necessarily those of Bitcoin Magazine or BTC Inc.

 

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