This is an op-ed by Scott Worden, engineer, attorney, and founder BTC Trust.
“I have been working on a new electronic cash system that will be entirely peer-to-peer, with no trusted third party.“- Satoshi Nakamoto
It’s a perfect fall day in Colorado, and I’m sitting outside a bar in the late afternoon. I’m meeting a fellow Bitcoiner, a guy I met in Austin at the end of this summer. As the sun went down behind the mountains, the sky turned orange, setting the perfect backdrop for lively Bitcoin conversations.
As we tick off the typical list of everything we agreed on—censorship is bad, red meat is good, etc.,—I made an offhand comment about wishing more companies would accept bitcoins as payment. “Well, I don’t, why do you want to break out of your session?” was the response he delivered. The implication, of course, is that a true Bitcoiner values satoshis more than anything else in the world. Why exchange them for groceries, t-shirts, or beer? “Have you not heard of him? Laslo Hanjic? This idiot exchanged 10,000 bitcoins for two pizzas. I do not repeat this mistake. Talk to me when bitcoin hits $200k maybe it makes sense.”
My new boyfriend isn’t alone with this kind of thinking. It’s a sentiment that has been advanced by people like Michael Saylor and others in the HODL community. they will adopt,”The rarest asset in the world is Bitcoin. It’s digital gold“,”Buying bitcoin is like buying a property in Manhattan 100 years ago“,” Do not sell your bitcoins! Yet, at the same time, there is an intuitive recognition that if bitcoin cannot be traded for a good or service, then it is in fact worthless, no matter what price is flashing on BLOCKCLOCK at the desk. I call this the HODLer’s dilemma.
But is this really a problem? Are these phrases, as prolific as they are, in keeping with the spirit of Satoshiinnovation? Does the proliferation of the Lightning Network and non-custodial mobile wallets that our parents (or children) can intuitively operate require us to develop an understanding of the Bitcoin value proposition? Personally, I think now is the time to stop thinking of bitcoin as just a store of value and start visualizing it Primarily as a medium of exchange … This also happens to store value better than any asset on earth. In case you weren’t already paying attention, here are some reasons why.
Bitcoin will be suitable for people who do not have a credit card or do not want to use the cards they do have.“- Satoshi Nakamoto
It’s time to start getting out of the system now. The signal has never been stronger. Today we live in a world where the Fiat system can:
All this happens today, It is probably just the tip of the iceberg. In a retail system where cash transactions are becoming increasingly scarce and inconvenient, the majority of major banks, credit agencies and payment systems have agreed to the demands of government that seem to have an existential stake in controlling our behavior..
Of course, bitcoin is not a panacea for censorship — at least it’s the most popular way to buy and exchange it today. The Canadian truck driver protest It showed us that a government committed to suppressing the voice of its citizens would go to great lengths to do so, and in the process taught us that licensed exchange and chain analysis techniques can be highly effective in blacklisting addresses and even identifying donors. These weaknesses must be overcome in order to provide a censorship-free exchange currency. But by transacting in Bitcoin with peers and merchants for everyday goods and services as often as possible, we incentivize others to accept and transact with Bitcoin. With numbers alone, we can make the Bitcoin economy more powerful, decentralized, and hard to monitor. A society that naturally values privacy will choose to adopt non-custodial wallets, engage in collaborative transactions, and avoid KYC exchanges. Never has the growth and education of this community been more important.
Comfort and independence
“With cryptocurrency based cryptocurrency, without having to trust a third party broker, money can be safe and transactions easy.. – Satoshi Nakamoto
A common counterargument to trading in bitcoin is that it is either too complex or too slow compared to swiping a credit card. This simply is no longer true. Today, any entry-level Bitcoiner can download Muun Wallet and within minutes send Lightning invoices to customers for payment via QR code. Coinkite has an NFC device that allows users to sign transactions with a single tap of their card. There are more examples and more to come. The beauty of these solutions is that they are completely untethered, meaning there is no central third party that controls your coins. The software only enables the transfer of transactions to the network. Lightning deals clear instantly, with fees 2-3% lower than a traditional Visa or Mastercard. (For example, it recently cost me about $60 in fees to send the equivalent of $700 to angry ranches Last week for beef. That same transaction would have cost the merchant about $20 had I used Visa.)
In addition, these transactions enhance the autonomy of both sides. Fast transactions, like everything else backed by Bitcoin’s Proof-of-Work, happen without counterparty risk. Removed from the equation is the risk that the consumer will not pay their bill, dispute the charge, have insufficient funds in their account or file for bankruptcy in the future. All these risks are manifested in the inefficiency of transactions, and their costs are absorbed directly or indirectly by merchants and consumers. Thus, a trustless system like bitcoin is more efficient, reduces risk for merchants, and ultimately makes goods and services less expensive for responsible consumers.
“I am sure that in 20 years there will either be a very large transaction volume or there will be no volume.“- Satoshi Nakamoto
It is best to think of all our transactions in terms of Bitcoin. When money is truly a store of value, we take a thoughtful approach to spending and calculate the potential increase in value that money might get in the future. This makes sense, and applies whether you’re spending dollars or sitting. Location bitcoinorshit.com This point drives home quite frankly.
There is also a story Laszlo Hanic, who in 2010 bought two pizzas for 10,000 bitcoins. In fact, Laszlo paid $2 billion for the pizza, if we consider the market cap of BTC more than a decade later. It surprised me though, when Bitcoiners jumped at Laszlo for being economically naive, and used that example to support their position that bitcoin should never be spent. The simple fact is that virtually everyone who bought pizza in 2010 spent thousands of bitcoins on it. The only way to avoid this is to eat something less expensive or starve. The truth is that every fiat transaction we make is a direct barter to increase our potential stack. Once we understand this, the public debate about spending bitcoin on products or services is basically dead.
The vast majority of us need to exchange monetary energy for goods and services to survive in today’s society. The only controversy left is Which Products or services take precedence over the chance to get more swats. It is a personal and unique decision for each of us. The answer must be thought of independently and regardless of whether this monetary energy is spent in sessions, dollars or yen – it is only monetary energy rescued – What’s left – This is important when it comes to the HODLer’s dilemma.
We all potentially save more BTC if we start doing more transactions in BTC. For one thing, when we’re dealing with sound money that’s a store of proven value, we’re more apt to discriminate in our purchases. Sure, we really want the new iPhone, but is it worth 5 million regurgitations if you expect the sitting value to be worth a penny someday? We may decide to wait another year before we upgrade and retain these seats in the future. On the other hand, we all need food, shelter, and clothing. If I had a choice between buying my meat at Costco with my Visa card, or buying directly from a farmer who accepted bitcoin, why wouldn’t I choose the latter?
Today, the number of merchants accepting Bitcoin is relatively small, although it has been steadily increasing. As bitcoiners begin to understand that their “spend dollars, save sats” theory may be backfiring, more numbers will begin to seek out goods from merchants who accept payments in bitcoin. This surge in demand will lead to merchant adoption, which could shift the timeline for the bitcoin economy significantly to the left.
More exchange means more value
“As the number of users grows, the value of each coin increases. It has the potential for a positive feedback loop; as users increase, the value goes up, which may attract more users to take advantage of the increased value.” – Satoshi Nakamoto
This is where we sit today. There are a growing number of bitcoin speculators and enthusiasts who have bought into the idea that bitcoin is a true store of value. This community further believes that the scarcity of assets will inevitably lead to supply pressure which will drive up the price. Sure, this could happen through just HODLing, but as Satoshi Nakamoto points out, the value goes up when the numbers go up. users Go up. Is the purchase and holding of assets eligible for use? If the brilliance behind bitcoins enables peer-to-peer transactions without a third-party intermediary, are we really taking advantage of this potential by hoarding exclusively and not spending?
I believe bitcoin needs to become a true medium of exchange for it to fully realize its potential as a store of value. Since value is not derived from scarcity alone – demand is fundamental to the Bitcoin price. If it is bitcoin service It becomes the driving force of its demand, at this moment its true potential as a store of value will be realized. Today’s economic and political backdrop may be the motivation we all need. But for bitcoin to become an essential part of our daily economic activity, it is appropriate that it be valued alongside other speculative assets, and subject to the whims of the very monetary system it was meant to replace.
This is another guest from before Scott Worden. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
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