Nick Szabo  🔑

A monetary system is bounded in both sides of the coin. Risk of default is how the global economy works. You can't design this out of the system without enslaving people.

How does Bitcoin enslave people?

I can agree in good faith to make payments to x, but if/when economic or personal conditions change through no fault of my own to point i can't afford payments, the only thing I have left to pledge to avoid default is my own personal autonomy.

Good for you, but bad for the also human counterpart(ies) who had been counting on you, and an utterly insecure basis for a monetary system.

THe monetary system is a reflection of human interactions and relations. These come part and parcel with credit and default risk. If you remove that feature from the money system, it can never act as a reliable abstracted system of real value allocation.

A debt based currency is a flawed system leading to artificial credit booms and credit busts. If credit is taken from a currency with a fixed supply, it reduces heavily those credit cycles.

are you simply asserting the superiority of the gold standard over the current system or is there something specific that cryptocurrency brings in your view?

A well implemented cryptocurrency, with mature holder and estate key management, is much more secure (trust-minimized) than gold in most ways, and far more efficient for moving value around the globe.

perhaps it is but surely the interesting question is whether a "well implemented cryptocurrency" can provide a more secure basis for the monetary and financial system than the alternatives, and, if so, how and why

Credit in the form of transferable bank deposits does carry some default risk, but has other advantages over crypto as a payment method, namely speed, cheapness, and denomination in the most widely used unit of account, hence less purchasing power risk.

It has those advantages over gold, not, in the long run, over cryptocurrency.

Easy to see gold has lower purchasing power risk both short/medium term by simply observing market signal of price/volatility/skew, regardless of noise in theory or financial 'beliefs'. Bitcoin will have convenience superiority in time. Certainty of purchasing power, likely not

Both gold/fiat benefit from base layer of value/stability/liquidity anchored in "commodity equivalence" of first order needs(Food/energy). While Bitcoin as mathematical system is anchored in unforgeable "scarcity of time",still subject to uncertainty of competition/system entropy

starting from a foundation that is trust minimized and having the option to create trust in higher layers is the only sane architecture that stands out to me for financial ecosystems — trust is complicated — good protocols are simple

Without credit there is no possibility of scaling in any economy. And in our current structure there is no capacity of sustaining the complexity of the system. Pandora's box has been opened. Can't be shut without return to medievalism.

I have never heard a single cypherpunk argue for a ban of credit. Many appear critical of fractional reserve banking, so if that's what you take issue with, imo you could avoid confusion by being more precise.