Nick Szabo  🔑

Shallow safety vs. deep safety: Shallow: estimated from volatility, assumes nothing goes wrong at lower layers of the protocol stack Deep: what happens to your assets upon underlying failures? e.g. how would your digitally centralized assets fare against sanctions or cyberwar?

Digitally centralized assets have poor deep safety. They were designed in & only work in a legally stable environment. Real estate & gold have deeper safety, assuming strong local security. Trust-minimized Bitcoin uses computer science to achieve unprecedentedly deep safety.

Digital centralization has made it possible, for the first time in history, for authorities to routinely extract haircuts and "negative interest". Some countries in Europe have already used these techniques against digitally centralized cash balances.