Both pieces were a pleasure to read. Perhaps to stay in line with the analogy: Bitcoiners point to a narrow door that leads to a building that is also on fire; a credit layer provides fire escape slides for all windows in there, as well as 10 more doors?
What I take away as one of Green's main critiques is that with fiat, there is an - albeit slow and flawed - path to reform, to hold accountable, and to contest in the fiat system. In Bitcoin, "the lock is welded shut". Should a sound societal design, of which money is a core pillar, remain cautious and therefore include "backdoors" or safety valves? Does the credit layer (and who knows whichever other societal structures that should be built on top in a decentralised way) offer these safety valves, allowing for a fixed base money?
See here for the proof that a fixed limit good CANNOT EVER provide the functions of money. It is impossible and that is why neither market nor state has ever selected such a money. A non-monetary good cannot provide a "base-layer" money. That should be obvious. https://thebitcoingambit.substack.com/p/chapter-6-deflation
Thanks for linking your article. Have you read mine?
As it explains, the fixed stock of base money is not a hindrance, but a strength. Non-infaltionary elasticity needs elastic credit money, redeemable in fixed base money to prevent overissuance and dishonesty.
Like Green's article, yours does not consider credit on Bitcoin M0. Bitcoin's credit money layer M1 is already code and proving itself in Alpha.
Early bitcoiners don't siphon wealth from late adopters, if late adopters buy bitcoin from them.
It's the opposite. They who purchase bitcoins get something that will increase in value, by exchanging it for something that will decrease.
As such those who buy bitcoins from early bitcoiners with fiat money can be seens as the one's who fool bitcoiners into parting with something there is a limited edition of, for something that in the long run there is a unknown unlimted amount of.
People don't have to buy bitcoin. They can earn it.
They can offer goods and services in exchange.
If they think it's unfair. Nothing stops them from creating their own coin, which they can distribute however they like. That's what Satoshi made possible.
Bitcoin is like a global inclusive dance, in which those who participate helps protect the value of each others savings and earnings.
My personal thinking is that UBI would be the most fair money. Each person just getting a fixed amount, simply for existing. But it will flow to those that work.
Bitcoin being a possible hedge against possible UBI inflation.
And also a guard against tyranny. If people fear that their money can be frozen if they have the wrong opinions.
They simply will never speak out until they risk dying however they do.
Democracy isn't possible. The existence of Bitcoin or something like it, as such protects democracy.
Democracy came about in a world based on money that couldn't be frozen.
If the freezing of money were possible. The US might never had been able to fight and win the war for independence.
If some kind of elite can freeze the money of people. They are f*cked.
The guy asks about the weil of ignorance. While being himself very ignorant.
Tell that veil of ignorance experiment to people growing up in in a country in which they are forced to work for fiat money with 100% inflation or more.
Making it impossible for them to build wealth and independence. And as impossible for them to gain power and unseat the dictator.
For example all the people that became poor or stayed poor because they grew up in Zimbabwe.
Where their fiat money collapsed. Printed into destruction by their dictator.
Something that can't happen on a Bitcoin standard.
1. Since Bitcoin is freely traded, everyone could have entered at any time at the correct market price. Green's argument is an ex-post fallacy.
2. ON democracy: Slightly off topic, but I consider democracy possible, by thranscending today's fake democracy, which in truth is just an electoral party oligarchy. Hayek's demarchy idea and John Burnheim's "Is democracy possible?" are important ideas along the right path. No there quite yet, but approaching.
Not sure everyone could have entered at the correct market price. Some are too poor to be able to take any perceived risk, some live in countries with hardly no information about it, and some too young, not even born.
So the distribution won't end up fair. But there is also the fact that even if Satoshi would haven given everyone on earth a bitcoin. Most would just have sold it, as soon as possible. A similar thing happened in Soviet, and also in El Salvador.
So a “fair” distribution isn't really possible. So the question is. Should Satoshi had just given up because a fair distribution isn't possible? No.
That would had been even worse.
Early adopters mostly sold, since it wasn't possible to know if the thing would be attacked and fail. So those that managed to hodl on to some did so against all odds and mostly out of luck. And Bitcoin wouldn't had succeeded at all without them. Which would had meant that people would had possible given up on the concept.
There is still a fairness built in. In that they can't create more out of air. Unlike in Proof Of Stake systems in which they can increase their stake. As such they lack the fairness Bitcoin have.
I haven't read his article because it's subscribers only. But my guess is that he takes Rawl’s veil and asks either.
A. Would you want to live in a world where Bitcoin is the base layer money.
Or:
B. Is a world in which Bitcoin exists better than one in which it doesn't.
If he asks B. The question is very simple. Yes, it has potential to be that for many people.
If he asks A. I personally believe so. Since even if it starts of with an uneven distribution among people. It will probably in the long run ensure that people will only stay rich if they contribute to society as no one can freely print money and freeride on others, by simple print money or being close to those who can.
And also that as some people die, their coins may be lost. And as such it would work as a distribution mechanism back to everyone in society. Though that maybe is, or would change. As people begin to store their coins in multi signature addresses that can pass them on to their heirs.
But the question, if that's what he asked, I assume misses something. That in a world where Bitcoin is invented. Nothing stops people from creating their own version of Bitcoin, if they find Bitcoins distribution to be unfair. As the technology is open source. What practically stops people is the coordination problem.
Another thing that may make it difficult is that if they begin with a proof of stake coin instead of a Proof Of Work coin. They maybe could premine it and distribute it pretty equally to people if people have a good identity system.
Then change it into Proof Of Work.
Still probably difficult in practice.
But nothing stops people from instead adopting a coin with what they may believe is a more fair distribution.
Even in a Bitcoin standard world. Since in a Bitcoin world there is always the possibility of competition unlike in a world where Bitcoin wouldn't be invented.
So I believe that basically in both John Rawls veil’s scenarios it would be better to be born in a world where Bitcoin was invented. No matter how it was used. Rather than one in which it wasn't.
Both pieces were a pleasure to read. Perhaps to stay in line with the analogy: Bitcoiners point to a narrow door that leads to a building that is also on fire; a credit layer provides fire escape slides for all windows in there, as well as 10 more doors?
What I take away as one of Green's main critiques is that with fiat, there is an - albeit slow and flawed - path to reform, to hold accountable, and to contest in the fiat system. In Bitcoin, "the lock is welded shut". Should a sound societal design, of which money is a core pillar, remain cautious and therefore include "backdoors" or safety valves? Does the credit layer (and who knows whichever other societal structures that should be built on top in a decentralised way) offer these safety valves, allowing for a fixed base money?
See here for the proof that a fixed limit good CANNOT EVER provide the functions of money. It is impossible and that is why neither market nor state has ever selected such a money. A non-monetary good cannot provide a "base-layer" money. That should be obvious. https://thebitcoingambit.substack.com/p/chapter-6-deflation
Thanks for linking your article. Have you read mine?
As it explains, the fixed stock of base money is not a hindrance, but a strength. Non-infaltionary elasticity needs elastic credit money, redeemable in fixed base money to prevent overissuance and dishonesty.
Like Green's article, yours does not consider credit on Bitcoin M0. Bitcoin's credit money layer M1 is already code and proving itself in Alpha.
Extremely well written and reasoned.
Early bitcoiners don't siphon wealth from late adopters, if late adopters buy bitcoin from them.
It's the opposite. They who purchase bitcoins get something that will increase in value, by exchanging it for something that will decrease.
As such those who buy bitcoins from early bitcoiners with fiat money can be seens as the one's who fool bitcoiners into parting with something there is a limited edition of, for something that in the long run there is a unknown unlimted amount of.
People don't have to buy bitcoin. They can earn it.
They can offer goods and services in exchange.
If they think it's unfair. Nothing stops them from creating their own coin, which they can distribute however they like. That's what Satoshi made possible.
Bitcoin is like a global inclusive dance, in which those who participate helps protect the value of each others savings and earnings.
My personal thinking is that UBI would be the most fair money. Each person just getting a fixed amount, simply for existing. But it will flow to those that work.
Bitcoin being a possible hedge against possible UBI inflation.
And also a guard against tyranny. If people fear that their money can be frozen if they have the wrong opinions.
They simply will never speak out until they risk dying however they do.
Democracy isn't possible. The existence of Bitcoin or something like it, as such protects democracy.
Democracy came about in a world based on money that couldn't be frozen.
If the freezing of money were possible. The US might never had been able to fight and win the war for independence.
If some kind of elite can freeze the money of people. They are f*cked.
The guy asks about the weil of ignorance. While being himself very ignorant.
Tell that veil of ignorance experiment to people growing up in in a country in which they are forced to work for fiat money with 100% inflation or more.
Making it impossible for them to build wealth and independence. And as impossible for them to gain power and unseat the dictator.
For example all the people that became poor or stayed poor because they grew up in Zimbabwe.
Where their fiat money collapsed. Printed into destruction by their dictator.
Something that can't happen on a Bitcoin standard.
Thanks for the kind praise and mostly agree.
1. Since Bitcoin is freely traded, everyone could have entered at any time at the correct market price. Green's argument is an ex-post fallacy.
2. ON democracy: Slightly off topic, but I consider democracy possible, by thranscending today's fake democracy, which in truth is just an electoral party oligarchy. Hayek's demarchy idea and John Burnheim's "Is democracy possible?" are important ideas along the right path. No there quite yet, but approaching.
https://ses.library.usyd.edu.au/bitstream/handle/2123/2402/Frontmatter-is_democracy_possible.pdf;sequence=1
3. On UBI I struggle with the U and the B. Another day.
Not sure everyone could have entered at the correct market price. Some are too poor to be able to take any perceived risk, some live in countries with hardly no information about it, and some too young, not even born.
So the distribution won't end up fair. But there is also the fact that even if Satoshi would haven given everyone on earth a bitcoin. Most would just have sold it, as soon as possible. A similar thing happened in Soviet, and also in El Salvador.
So a “fair” distribution isn't really possible. So the question is. Should Satoshi had just given up because a fair distribution isn't possible? No.
That would had been even worse.
Early adopters mostly sold, since it wasn't possible to know if the thing would be attacked and fail. So those that managed to hodl on to some did so against all odds and mostly out of luck. And Bitcoin wouldn't had succeeded at all without them. Which would had meant that people would had possible given up on the concept.
There is still a fairness built in. In that they can't create more out of air. Unlike in Proof Of Stake systems in which they can increase their stake. As such they lack the fairness Bitcoin have.
Sure, birth is not fair, genetics and luck is not fair.
Still, ceteris paribus, Bitcoin is fair.
You are right that external factors are unfair.
That Bitcoin exists in an unfair world.
And that Bitcoin is fair in the sense that the rules apply equally for everyone. That it doesn't discriminate.
That no one can cheat. And create bitcoins freely for themselves.
Exactly. That's why Mike Green's claim about Rawl's veil does not hold water.
I haven't read his article because it's subscribers only. But my guess is that he takes Rawl’s veil and asks either.
A. Would you want to live in a world where Bitcoin is the base layer money.
Or:
B. Is a world in which Bitcoin exists better than one in which it doesn't.
If he asks B. The question is very simple. Yes, it has potential to be that for many people.
If he asks A. I personally believe so. Since even if it starts of with an uneven distribution among people. It will probably in the long run ensure that people will only stay rich if they contribute to society as no one can freely print money and freeride on others, by simple print money or being close to those who can.
And also that as some people die, their coins may be lost. And as such it would work as a distribution mechanism back to everyone in society. Though that maybe is, or would change. As people begin to store their coins in multi signature addresses that can pass them on to their heirs.
But the question, if that's what he asked, I assume misses something. That in a world where Bitcoin is invented. Nothing stops people from creating their own version of Bitcoin, if they find Bitcoins distribution to be unfair. As the technology is open source. What practically stops people is the coordination problem.
Another thing that may make it difficult is that if they begin with a proof of stake coin instead of a Proof Of Work coin. They maybe could premine it and distribute it pretty equally to people if people have a good identity system.
Then change it into Proof Of Work.
Still probably difficult in practice.
But nothing stops people from instead adopting a coin with what they may believe is a more fair distribution.
Even in a Bitcoin standard world. Since in a Bitcoin world there is always the possibility of competition unlike in a world where Bitcoin wouldn't be invented.
So I believe that basically in both John Rawls veil’s scenarios it would be better to be born in a world where Bitcoin was invented. No matter how it was used. Rather than one in which it wasn't.
I like Mike Green but he has BDS
Let's acknowledge that Green's essay was reasonably balanced and nuanced, if half wrong.