Bitcoin is the perfect money. It embodies all of the properties and functions of money:
Store of value (SoV)
Medium of exchange (MoE)
Unit of account (UoA)
…and does so in a way that any person or participant, from anywhere in the world can
- Save without having their wealth invisibly stolen
- Spend without some Big Brother type of institution telling them what or with whom they’re allowed to do so
- Account, audit and verify what they have, when they received it and how much it is in relation to the whole.
Furthermore, this is all possible without any form of trusted intermediary, government regulation, prudential oversight or “decree by the anointed.”
Money is arguably the most important invention of mankind because it is a social technology, and we are by definition the social species. Money is the mechanism by which we measure or attempt to quantify complex things in both the material realm, such as time, energy and material resources, alongside things that are more metaphysical in nature, such as “value,” “reputation” and “quality.”
“measuring stick,” but is also a communication network. It is a medium through which higher order collaboration is made possible.
Money is critical for the formation of any society more complex than a few hundred people and without it we simply cannot scale civilization up. There’d be no division of labor nor any form of production beyond self subsistence.
Now, here we are in 2022. Roughly 14 years since Satoshi Nakamoto released the white paper for what has emerged as the apex money (at least on this planet).
So, what does this have to do with Bitcoin’s circularity?
Well, if bitcoin is the next and final global money, then by definition (and by design) it is already circular. It’s a monetary unit and a financial network which already embodies all of the elements required for a global economic system.
So, it’s not a question of “if,” or even “when,” but more a question of progress, magnitude and necessity.
In 2020 I wrote an article entitled “Bitcoin & Lockdowns,” in which I put forward a model of understanding Bitcoin’s long-term adoption curve, through the lens of necessity. And this is the answer to the circularity question.
Necessity is not only the mother of all invention, but is the grandmother of all change.”
Major transformations like Bitcoin are progressions which diffuse through society in memetic fashion.
They start imperceptibly slowly, but as they gain momentum due to both their own development and the deterioration of the old guard, they begin to accelerate exponentially.
And this is what we’re in the midst of today:
The fiat experiment spiraling out of control, and the necessity of using Bitcoin as a savings vehicle, payments mechanism and at some point an accounting system, all rapidly accelerating and converging.
When you look at modern economics and the fiat money they’re dependent upon, you realize you can no longer:
Accurately measure the product of your labor or value generated in the marketplace
Store or preserve the product of your labor or value generated in the marketplace
Freely or voluntarily exchange the product of your labor or value generated in the marketplace
Money is no longer “money” in the true sense of the term. It’s become, as Stephanie Kelton would put it; just “points.”
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