0/ Blockchain will first redefine what assets are considered money. Then it will actually reduce the total demand for money. Yes, blockchain will actually mean we need less money in the economy. Time for a thread.
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Stable coins do not need to be a component of everyone’s personal portfolio. I just meant that as an example of a type of asset that some people may desire.
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Right. So I agree that in a world of “Hyperliquidity of Everything”, the SoV component of Money would be gradually reduced. Question is, will it be BTC or a Stablecoin that is better suited to be the aforementioned cash-on-hand?
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Rather than moralistic “better suited”, which “will the market prefer” on the way towards this hyperliquid future?
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The point I’m making is that blockchain tech reduces the TAM of money due to hyper liquidity. The obvious next question is how powerful is this effect. If it is too powerful, it may not matter whether BTC or stable coins or utility coins like ETH win the money use-case.
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Intuitively, it feels that even if your “hyperliquidity of everything” thesis comes to pass, it will be after one of the Neo-Money’s touches $20T+. And then it can deflate afterwards as it flows to securities. The UX of your vision feels clunky. Much of the world is illiterate
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It is possible that the tokenization and hyper liquidity of everything comes more quickly than we realize. But I agree that probabilistically neo-money is more likely to grow to $10T+ first.
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We won't need money as a MoE either. Blockchain protocols will be the MoE, and that doesn't necessarily need money. It just needs the validators / security elements to be paid for. The UoA has to be a universal constant. A basket of stable assets may become the "norm" for a UoA.
End of conversation
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