chadlupkes on Nostr: Just saw a video from Katharina Pistor about her book "The Code of Capital". This was ...

Just saw a video from Katharina Pistor about her book "The Code of Capital". This was shared with me on Facebook after I asked my wall "What is Money", and it's an interesting set of concepts.

https://www.youtube.com/watch?v=m81pkJs5fcY

My comments in response:

First aspect, Priority, is enforced within the Bitcoin network in several ways. First, on the non-custodial blockchain itself, if you don't have the keys to a wallet, none of the assets in that wallet are available to you. Zero. It doesn't matter what the law says, it doesn't matter how much force is used, without those keys the assets can't be touched or manipulated. Second, in custodial wallets, you can have institutions working in the same way that banks work in the fiat world, giving you access to your assets but keeping the keys safe so that if the law identifies those assets as being needed to pay a debt, they can be accessed without undo force. If a court requires a bank to open an account and pay someone from the assets, they can and will do that. Perhaps that is why so much effort is being made to bring as much Bitcoin as possible under the control of financial institutions, governments and other potential third parties. They will never get all of it, there will always be some on-chain that are excluded from legal control, but if they can build financial tools and infrastructure using custodial wallets it can work exactly like the current fiat custodial system with the added advantage of the limited supply. Which I'm sure some people are trying to get around, but we'll deal with that eventually.

Second aspect, Durability, is absolute within the Bitcoin network. Much like Capital itself is a conceptual framework, the blockchain makes it visible exactly how much of the 21 million BTC that are available are in each and every wallet address at any given time. Once released by a miner, BTC can neither be created nor destroyed, only transferred between wallets.

Third aspect, Universality, is also part of the reason Bitcoin is superior because the asset is pure mathematical and computer code, making it completely safe against destruction. And if contracts in custodial systems like I described above are put into place, guarantees can be made that a certain amount of capital is available to replenish "lost" BTC from a reserve if someone is stupid with their keys or one of those third party custodial systems is hacked.

Convertibility is a potential weakness in that there is only one form of BTC, and that's the numbers on the blockchain. In order to convert those numbers to other types of assets, it requires an exchange of value. And "cash" or physical representations of BTC do not exist, except as perhaps printed materials related to wallets on custodial third party controlled accounts. Again, goes back to whether third party custodial systems are needed, and in order for the current players in the financial games to keep control over our lives and our nations, they probably feel the need to take control over as much BTC as possible as quickly as possible so that they can continue to keep that control.

The enforcement mechanism in the pure non-custodial blockchain system is simply the keys, nothing else exists. And third party actors, meaning any institution or legal entity, are unable to overcome that in the context of BTC. I agree with her premise that these various sources of law have all of the power in the fiat systems. But they have NO power in the on-chain system. It's pure peer-to-peer.