Read on Twitter
1/ Yet another example of “money is a shared illusion” thinking. https://twitter.com/ercwl/status/1343686914075996160
2/ If a shitcoin temporarily overtakes bitcoin’s market cap (how would you ever know whether it was permanent?), it does mot change the monetary properties of bitcoin.
Objective, real-world monetary properties are ultimately what matters, and will inevitably prevail.
Objective, real-world monetary properties are ultimately what matters, and will inevitably prevail.
3/ If you think of fiat as an ugly Bcash-style gold forkcoin—assuming an absence of bitcoin as an option—holding onto “mainchain” gold would eventually turn out to be the smart move.
This has already been demonstrated through multiple paper money experiments in history.
This has already been demonstrated through multiple paper money experiments in history.
4/ Bitcoin is perhaps special in that a lower market cap relative to other cryptocurrencies decreases the security of proof of work—but this only increases the risk of censorship (transportability).
It does not threaten the primary monetary property: inflation-resistance.
It does not threaten the primary monetary property: inflation-resistance.
5/ Inflation-resistance (more specifically, the difficulty of production resulting in a consistently high stock-to-flow ratio) is enforced by bitcoin nodes.
6/ There are two (unlikey) scenarios where I could imagine a shitcoin temporarily overtaking bitcoin’s market cap:
i) An irrational, opportunistic, get-rich-quick pile-in to some garbage like Ethereum.
ii) A state-led push into a more-easily regulated/inflated bitcoin forkcoin.
i) An irrational, opportunistic, get-rich-quick pile-in to some garbage like Ethereum.
ii) A state-led push into a more-easily regulated/inflated bitcoin forkcoin.
7/ (Note that I am more convinced of the possibility of (ii) after witnessing the still-ongoing lockdown and mask hysteria. Exposed to the right cues, a majority of people can act against their own best interests for extended periods of time.)
8/ However, in either scenario, there will *always* remain a core of hardcore node operators with an unswayable dedication to maintaining the bitcoin supply limit.
The sanctity of bitcoin’s inflation-resistance is guaranteed by these Bitcoin Templars.
The sanctity of bitcoin’s inflation-resistance is guaranteed by these Bitcoin Templars.
9/ Whether you look at the problem from an (Austrian) economic theory or historic precedent point of view, one thing is for certain: the hardest money always eventually wins. Monetary competition is a zero sum game, and good money pushes out bad.
10/ So if some shitcoin does one day suddenly or gradually overtake bitcoin’s market cap, put down your Harari-inspired monetary garbage-takes, and stop worrying.
It won’t mean that bitcoin is dead. The spell won’t have been broken—there is no spell. Be patient.
It won’t mean that bitcoin is dead. The spell won’t have been broken—there is no spell. Be patient.
11/ You can continue to hold onto your bitcoin with confidence that the hardest money always wins. It may take a long time, but people will return when they rediscover the evil of inflation.
It’s the monetary properties, not any illusion, that matters. That will never change.
It’s the monetary properties, not any illusion, that matters. That will never change.
