DanDjarin on Nostr: Maybe this could be a good topic for one of @TheGuySwan’s FUD relief series. Also, ...

Maybe this could be a good topic for one of @TheGuySwan’s FUD relief series. Also, here’s the relevant quote from the book (a super thought-provoking read BTW), I didn’t want to make my first note too long.

“By sharply capping possible units and pushing all change onto the price, Satoshi made it a volatile speculative asset rather than a reliable measuring stick of value.
Capped at 21 million units by 2141, with all but 2 million or 91 percent already is-sued, Bitcoin is extremely volatile up and down by as much as 20 percent on jittery days. With as many as 5 million Bitcoins irretrievably gone because the private keys that access them are lost, BTC's net supply may even be shrinking.
This cap is fatal to Bitcoin as money. The supply of money must be able to expand as the productive economy expands. A currency is ultimately merely a measuring stick for that production. By capping the total supply of Bitcoin, its founders gilded the lily, made a money more golden than gold the supply of which increases approximately 1.5 percent per year. A coin that exists only in the ether has been rendered into a commodity —and thus its value as a financial measuring stick is destroyed.
Bitcoiners, far from progressive, hold their coins as an old-fashioned speculative asset, like a van Gogh painting or a Mickey Mantle rookie card or, well, a coin collection. Its volatility makes it useless as cash or for investment. A currency must be above all devoid of information surprise. Bitcoin's volatility makes it full of volatile surprises.
Money is only valuable when you give it away and cast it upon the waters. It is meant to facilitate trade and investment and entrepreneurship. The rule of Bitcoin is HODL, hold on for dear life, a post- capitalist rule. At Bitcoin conferences, there is much talk of buying Bitcoin and "going to sleep or on vacation or on a cruise." Money gains its value through profits from creative economic projects-the knowledge it enables, the information it yields, the time it saves. The reason the dollar is avidly sought is not because it sustains the U.S. economy but because the U.S. economy sustains it. It is the preeminent global reserve currency because it can be invested in a huge fabric of American enterprise and buy a global array of goods and services.
Bitcoin aspired to be gold, but gold is a metric not a store of value. Even on a gold standard, the amount of gold backing the currency ordinarily does not affect its price. The monetary properties of gold allow it to be trusted as a measuring stick of value even in relatively small quantities. Because gold is trusted, a small amount can support a huge increase in transactions. PayPal and Visa and other trusted platforms with trillions of dollars' worth of transactions need hold hardly any phys. ical money at all.
Above all Satoshi failed to make a new gold because he made time one-dimensional, as if time made a past but not a future. While understanding that money must be as scarce as time, he ignored the other crucial feature of time, its infinite extensibility. A successful money must combine these two features of time as paradoxically both scarce and infinite.
A successful money must be governed ultimately by the expansion of knowledge and learning. In the information theory of economics, knowledge is ultimately measured by time.
Gauging the gains of entrepreneurial learning and thus the increase in the supply of knowledge and money are two factors: the willingness of entrepreneurs to assume the risks and possible downsides of business projects, on the one hand; on the other, the willingness of lenders and investors to fund them.
These constraints govern the level of real interest rates, measures of time. These are gauges not of central bank fake fiat currencies but of actual time-prices accepted by entrepreneurs and their investors. True interest rates cannot be guaranteed by governments. A guaranteed loan is not falsifiable and does not generate real growth and collateral.
Just as important as the time-based scarcity of money is its extensibility.
Following the Asian financial crisis in 1998, the tech crash was caused in large part by the runaway appreciation of the dollar. During the tech boom, Fed chairman Alan Greenspan cut back on dollars. He said there was "irrational exuberance" and "inflation," when in fact a new digital economy was emerging, spearheaded by Thiel's Facebook, Bezos's Amazon, Google, and thousands of others.
In the last four years of the twentieth century, during the tech-telecom boom, the dollar's value rose 57 percent against gold. Measured by time-prices, the dollar appreciated strongly as the productivity multipliers of the internet economy all moved toward fruition. But, as with Bitcoin's cap of 21 million coins, the supply of dollars was prevented from matching an astonishing expansion of knowledge and wealth. Its role as a measuring stick was thwarted.
Money must expand in proportion as it is needed to conduct transactions, perform experiments, and launch projects. It must be as infinite as the entrepreneurial imagination, filtered by the banker's discipline, and it must expand in a way as limited as the twenty-four-hour day that defines time-prices, sometimes called dynes, required to conduct business.
Other better cryptocurrencies are abroad or on the horizon, more like gold in that they are scarce and yet also able to grow with the accumulation of wealth and knowledge. Bitcoin "mining," if it can be done rightly, is wonderfully analogous to the slow but steady increase of the gold supply.” - George Gilder, from chapter 13 of Life After Capitalism