Honest question: if you truly believe that, how do you account for the infrastructure required to mine it in a post-apocalyptic society? How do you guys envision a post-apocalyptic world where BTC is even remotely viable?
People are increasingly realizing that central banks don't have any scientific reason to exist, and the economy actually runs better without them. Their only reason to exist is to give unlimited power to governments and funnel wealth from the poor to the rich. Bitcoin is the bet that what I said is actually true.
You must understand that monetary theft has always happened in many forms, in addition to central banking and fiat currency. For example, even in a gold coin economy, the rulers have always sought to debase the coins with various methods, such as mixing them with less valuable metals. In history, everyone understood that debasing gold coins was theft. Everything worked fine when central banks succeeded in defending the gold standard.
However, things changed and this theft became modern economics, and it's difficult to question, because it's "science".
There's also a lot of historical inaccuracies and rewriting of history to defend this system. For example, the great depression is partly blamed on the gold standard, but in reality it happened exactly because the gold standard was already broken (since 1914), which resulted in wildly wrong speculative monetary practices and policies.[0]
As you said there's plausible rational arguments from both sides. But then again, are the central banks even following practices based on economics, or did they become politicized and corrupted, because of their central position in the economy? We see blatant monetary corruption happening in autocracies, but is it happening in western economies too, but it's just less obvious?
I have used years to study these issues and I'm becoming more convinced every day, that it's time for a hard money standard, i.e. Bitcoin. And, I think it's inevitable, because historically, people always vote for harder money in a free market.
[0] From this perspective, the Austrian School of economics has the correct explanation for the Great Depression. https://en.wikipedia.org/wiki/Great_Depression#Austrian_Scho...
Perhaps, but the period since 1914 saw the rise of many peripherical countries, notably China, who also have a tight control over their monetary policy, and use it all the time for their economic plans. For your counterfactual to make sense, you would have to present an example of a country that developed using the gold standard.
> But then again, are the central banks even following practices based on economics, or did they become politicized and corrupted, because of their central position in the economy? We see blatant monetary corruption happening in autocracies, but is it happening in western economies too, but it's just less obvious?
There is corruption and inefficiency at every level, but I fail to see how that would change by going back to the gold standard or cryptocurrencies for that matter.
I am familiar with the Austrian line of argument, and I'm sure in your years of study you have come across many criticisms of it, so I won't bother, but let's just say I don't think this perspective has brought us tangible benefits at all. Meanwhile, the imperfect system we have has shown itself to be at least robust to major hiccups recently.
If people are denied the use of gold as money, then they can't. There are many regions, where citizens are basically prisoned by their central bank, and can't use gold or US dollars.
Also, Switzerland used gold backed currency until 1999, and they are one of the richest countries per capita. There's no reason to believe that they would have done better with a fiat currency.
> There is corruption and inefficiency at every level, but I fail to see how that would change by going back to the gold standard or cryptocurrencies for that matter.
Self-custodied Bitcoin is impossible to inflate.
> Meanwhile, the imperfect system we have has shown itself to be at least robust to major hiccups recently.
Disagree. We are now entering a long period of depression.
There is no virtue in saving. Money that is hoarded reduces "consumption" but also reduces "meaningful" investments, no matter your definition of "meaningful" and "wasteful".
> Bitcoin is impossible to inflate, like gold.
Or Litecoin. Or Bitcoin Cash, or BSV. Individually, they are all "fixed supply", but as whole, any crypto currency that enters the market and gets traded should be counted as part of the asset reserves.
Unless, of course, we get some central entity to force everyone else to adopt the Highlander approach and claim "there can be only one"...
Oopsies.
No, money has strong network effects an tends to one.
Correlation is not causation. Japan has fiat currency and has not had significant inflation for decades. Housing is affordable. It's not just because most countries have "bad" monetary policy involving fiat currency that makes it impossible to have "good" monetary policy.
> money has strong network effects
In relation to currencies controlled by central banks? When used by governments as single legal tender? Perhaps.
But just look at any chart and see how BTC market cap relative to the rest of the crypto keeps going down. The number of Ethereum wallets is already larger than BTC. BTC is not the dominant chain anymore. Whatever advantage it had in terms of "network effects", it is evaporated.
BTC is a failed experiment. It failed as a currency and it never was a "store of value". And let's not even get on the topic of how BTC price is so heavily manipulated by Tether, to the point that exchanges should only display BTC/USDT if they honestly wanted to reflect their dependence on Tether's "fractional reserve".
We will wait until they crash to see how the maxis will be crying that Tether is too big to fail or something like it.
Why would Bitcoin be the most affected by Tether? USDT is used on all markets. It seems that Ethereum, DeFi, NFTs etc. have way more of shady stuff going on.
Re: Tether. They were constantly touting that their reserves were in BTC. When it depegs, BTC is the first that is going to crater.
Not true. Tether should have USD equivalent reserves, but I don't care about them. I don't care if they go bust.
> Tether should have USD equivalent reserves
Should, but they don't. At least since 2019 they already dropped all pretenses of having USD to back all USDT they minted. With the bull run started in 2020, they've used it as justification for all their wild minting with the price of the BTC. Whenever the price of BTC started to go down, they would "miraculously" mint a bunch of USDT and use to buy more BTC - in a clear attempt of market manipulation.
You are saying you don't care if they go bust, but you should at least be honest with yourself and be open to the possibility that all the market for crypto is built on a lie. The upcoming crash will be entirely on them.
USDT minting means that someone buys USDT with USD. There's nothing funny going on. Most of the USD in this market is invisible, because it's on exchanges, not in stablecoins. There's also USDC and BUSD, which are combined as big as USDT. I hope Tether falls, if that means cheaper Bitcoin.
No, it does not. Even themselves admitted it. They have minted before just based on the "value of their reserves", which no one can really verify.
If you continue with arguments that are provably false and blatant circular logic, I think I am done here.
No, this is revisionism.
By the way, you could totally use a gold standard nowadays in a centralized communist country, but if you believe in debt, risk and all that liberalist stuff, better not go back to that.
In modern economies, as production and population increase, you need more money in the system. If money is not available (because backed by gold), you'll need to augment your fractional banking ratios. One minor banking crisis and it's 1797/1893 all over again.
You don't need more money, because Bitcoin is infinitely divisible. It just means that the value of Bitcoin increases, when demand grows or productivity increases.
I say that having done the reasoning for my own portfolio and allocating some to a "privacy basket"; Bitcoin is just the first iteration of cypherpunk ideals for money, and it has successors now.
But really, most of my holdings aren't premised on a collapse but a hedge on uncertainty about what governments are doing next. The core premises that got Bitcoin started are still in effect. You can remove all the onramps and it's still the case.
I actually did invest based on my principles. My faith might be a little bit shaken, but at this point I feel like I might as well see the experiment out. Maybe I am a fool.
Spoken like someone who everyone should listen to. /s