management of the US dollar is now in the hands of… the people who’ve been buying a ton of bitcoin in a bet on the imminent death of the US dollar.
@KarlHeinzHasliP i think the planet would be even less likely to survive a bitcoin standard.
@Hyolobrika sometimes people are glad to win bets by helping them come true.
But it's worth noting that a cryptocurrency doesn't have to be "deflationary".
@feld i’ve maybe devoted years of my life to thinking through this stuff. and, um, no.
here’s a presentation that directly addresses what you misinfer from that graph.
https://www.interfluidity.com/uploads/2017/10/Fiat-Is-Effective-Minitalk-light-edit-to-share.pdf
@feld here’s maybe a more concise and entertaining version.
https://www.interfluidity.com/uploads/2019/10/uber-but-for-slavery-2019-10-30-post-edit2.pdf
https://ia904501.us.archive.org/5/items/english-collections-1/Economics%20in%20One%20Lesson%20-%20Henry%20Hazlitt.pdf
@feld you might address the basic point that the dollar has retained and gently increased value over time as long as it’s been held in the form of zero-credit-risk Treasuries. your graph just shows the existence of a mattress tax, not a weakness of the dollar as a store of value. while crypto has been a terrible store of value, because a currency has to accommodate those who expect to store negative values (be indebted) over fixed periods.
> Fiat money is an instrument of state power
yeah and that's a bad thing, a very very bad thing.
Today's problems are directly related to QE. You can't even have "uber but for slavery" unless QE exists. All the things we hate today only exist because QE made it possible for people to access a nearly infinite amount of cheap capital to fund their disruptive ventures in the hopes that someday they'll profit when the competition is eliminated
@feld QE does much less than you think. But you are getting to the actually interesting questions. Fiat is extremely effective. It’s a tool of statecraft. The question is whether its effectiveness is a good or bad thing.
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@Hyolobrika @feld that is why we invented the institutional state. it’s very much the same story as the blockchain. there’s a central power (central ledger) but no small group of people controls it, only a large decentralized community. we can trust that community, and enjoy the (absolutely extraordinary) benefits that can derive from central authority.
but, in both cases, there is always an attack surface.
@feld @Hyolobrika I made no insinuation that a small group of people control bitcoin. I made an analogy between the trust strategies. Devise a central authority (the whole point of a blockchain is to define a single, unified legder) maintained and controlled by a very dispersed community. Then if you trust the community, you can trust the authority.
@feld @Hyolobrika i was not entering into any kind of pissing match over degrees of dispersion.
@feld @Hyolobrika that is the community you are trusting. you trust this community enough that it seems implausible to you that 51% would change the rules adversely.