Bitcoin Without a Fight
loeber.substack.comI don’t see how the article can plausibly argue that Bitcoin has won. How does USA creating a reserve of coins they will never sell change anything? It’s just as if the cap of bitcoins have been adjusted, which doesn’t fundamentally change Bitcoins role.
Can you get a bank to issue a mortgage in Bitcoin? Can you make your employer pay you in Bitcoin? Can you pay your taxes in Bitcoin? No? Then nothing has changed. Bitcoin didn’t win in any meaningful sense. It’s just an abstract thing people hoard for the sake of hoarding. If you’re lucky you can use it as a hedge against inflation. Fairly safe in the very long term, but very risky in the short term.
Yes, the market cap is continuously increasing, but I don’t see how thats meaningful. Anyone can create a new coin with a huge market cap. That’s easy. The market cap doesn’t say anything about how much value is stored in the coin. The market cap becomes even less meaningful if huge quantities of bitcoins are stored in huge reserves, that can never sell a significant portion of their coins without crashing the entire bitcoin market.
Yeah, governments don’t fear bitcoin anymore, mostly because it has become clear that bitcoin could never do any of the things people thought it could do. The main problems now is cryptocurrencies being used for crime and scams, but I think most governments know it’s hopeless to fight that fight by banning the currencies themselves. The fight will mainly be in the form of increasing regulations around trading cryptocurrencies for real currencies, which is already happening many places.
All "winning" requires in this context is that governments didn't really try to kill it. They had the opportunity, chose not to exercise it, and arguably no longer have the opportunity.
As the article notes, Liberty Reserve was seen as Bitcoin's antecedent when it launched, and many people expected it to meet the same fate - raids, seizures, criminal charges against the founders. Any moderately successful private currency project up until around 2010 was met with this response. Curiously, this never came for Bitcoin. Since there was no centralized throat to strangle, authorities started acting like what Satoshi did wasn't illegal at all. If Satoshi had undertaken the same effort under his real name in the open, I have little doubt that it would have been swiftly shut down, and he would have faced criminal charges. But that didn't happen, the cat's out of the bag, and now any regular schmo is allowed to mint and circulate their own currency.
Beyond that, "winning" is in the eye of the beholder. Many people call it a failure due to its non-ubiquity as p2p cash, and they're not entirely wrong. Even so, it provides those few who need it with a capability that previously was not allowed by authorities to exist.
Title misspells _point_