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Dr. Selgin was on the mailing list with Wei Dai and myself where in 1998 cryptocurrency (bit gold, and a bit later b-money) was invented. His description of free banking was very inspirational and informative.
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George is a fellow OG but this is wrong. Bitcoin is seamlessly global, it does not and need not conform to the ideological speculations ("macroeconomic theories") of particular polities.https://twitter.com/GeorgeSelgin/status/1021553927324688386 …
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(Also Larry White's description of free banking). My two-layer architecture (bit gold for the basic currency and settlement, Chaumian cash for the retail "bank notes") was inspired by the free banking system of bank notes redeemable on demand for gold at a gold window.
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The lesson I drew from that and other aspects of history that the real money in these circumstances was gold -- that is what people wanted at the end of the day. If the gold window closed, the trust-based part of the system collapsed.
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Trust and security considerations are far more important than speculations about aggregate human behavior. Psychologists have a hard time making their experiments on individuals repeatable. Macroeconomists speculate about vast numbers of interacting individuals, no repeatability.
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High inflation causes savers and creditors large tangible harms, as we see today in Venezuela, Iran, Sudan, Nigeria, Argentina, &c. But alleged harms caused by much lower levels of "bad deflation" are very causally remote from monetary decisions -- it's ideological speculation.
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While macroeconomic debates are very popular in the fiat central banking world, where monetary decisions are highly political, they are nevertheless ideological speculations not science.
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For these reasons, I strongly urge those developing or maintaining cryptocurrencies to focus on trust minimization and security. Protect holders against internally caused loss of value, but treat macroeconomic considerations with many grains of salt and very low priority.
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Additionally, I think the debate has progressed to the point of how bitcoin successfully challenges the institutionalized incumbency advantages that national fiat has over btc when it comes to expressing prices in the new numéraire, or unit of account.https://www.alt-m.org/2011/12/22/making-the-transition-to-a-new-gold-standard/ …
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@SoakerPatoshi btw this seems relevant too, if I understood this article, Nash's argument is that a parallel standard is asymptotically the same as reestablishing a standard by fiat, but only in the presence of a sufficiently apolitical commodity money (which gold is not) -
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To be fair, I don't think anyone does.
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FWIW, I think this critique applies to your explanation just the same: https://twitter.com/NickSzabo4/status/1021657068246261760 … That you or Nash could be correct doesn't mean you are correct a priori
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Nash's argument is a theory, and it's not very clearly falsifiable either, in the sense that the predictions it makes a single prediction over an indefinite time horizon. It may turn out to describe how reality plays out, or maybe it won't
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When was the last time you were wrong about something in Bitcoin or smart contracts?
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We might also ask which would be best at ruling-out booms and busts. But we need economics to answer such questions. I don't think any of this is a matter of ideology. Nor does it mean that gov't should oppose innovations that don't conform to my or any other economist's ideal!
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Nick is on fire
tonight good read !Thanks. Twitter will use this to make your timeline better. UndoUndo
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Btc is slow , expensive and centralised. But I agree .. it is a global phenomena. Maybe in the future it will be useful.
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when u last test btc? i send yesterday 687$ cost btc and fee was 0.06$ oh it's very expensive
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The average fees is more expensive than that.. when the network is busy the fees are too expensive. On ledger btc can do just 6 transactions per sec. It can not scale.
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Lightning network could be the answer. However still early days and the economic model that is going to build on top of it will give priority to big banks/institutions. I would honestly have preferred to enlarge to block size.. way more democratic and fair.
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Plus.. why do everyone still believe btc is decentralised when the hashing power is in the hands of 1-2 mining pools?
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u dont like 8k, bcoz u want 20k again. than yr tweets will be shiny.
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Do not get me wrong I see value in btc but it is also important to find technical limitations in projects. I am not a fun of any coins. The utility of the coins is what will make the value rise. What utility do you see in btc?
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problem is u cant see it.
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