Patri Friedman

2/ "Price Inversely proportional to velocity" here is not a vague correlational statement, but an exact one from "MV = PQ", which was my grandfather's license plate: https://en.wikipedia.org/wiki/Equation_of_exchange …

3/ Which means that #bitcoin's governance problem is worse than you thought. Fast transactions = higher velocity = lower price, so #Bitcoin holders literally have a direct incentive for a slow network (it's not just a coordination problem)

4/ You can argue that faster txs = greater utility = more future demand, and there's some truth, but that's an indirect/distant/second order effect compared to the direct/immediate/first order effect of velocity decreasing price.

5/ This suggests that store-of-value and medium-of-exchange uses are in opposition. Hodlers want high prices, which means a slow network. Exchangers are price-indifferent but want speed.

6/ This makes investing in tokens for any non store-of-value a sketchy proposition. An effective enabler of exchange (financial, storage, CPU, bandwidth, whatever) must be fast & low-friction, which is opposed to token appreciation.

Isn't P in the exchange equation the price level, which in turn is inversely proportional to the value of the currency in question?

Causality in the exchange equation can be deep, but analyzing a change in V is easy: Since M is constant, Q is constant, and P (vs. any other currency) floats, P will change directly inverse to V.

agreed, but is P the price level of goods in the economy or the price of (for instance) 1 BTC? these change inversely as well, no?