๐๐ฏ ๐ฆ๐น๐ค๐ฆ๐ณ๐ฑ๐ต ๐ง๐ณ๐ฐ๐ฎ ๐ต๐ฉ๐ฆ ๐ฆ๐ญ๐ฆ๐ท๐ฆ๐ฏ๐ต๐ฉ ๐ค๐ฉ๐ข๐ฑ๐ต๐ฆ๐ณ ๐ฐ๐ง โ๐ฎ๐ญ ๐ค๐๐ฒ๐๐๐ถ๐ผ๐ป๐โ, ๐ต๐ฉ๐ฆ ๐ธ๐ฐ๐ณ๐ญ๐ฅโ๐ด ๐ง๐ช๐ณ๐ด๐ต #Ai-๐ฆ๐ฏ๐ฉ๐ข๐ฏ๐ค๐ฆ๐ฅ #Bitcoin ๐ฃ๐ฐ๐ฐ๐ฌ.
Most people are familiar with fiat currencies, and will wonder how Bitcoin differs from it. In this chapter, Svetski (npub1dtgโฆup6m) and johnkvallis (npub1cqmโฆhjec) give their explanations, which are indispensable for anyone new to Bitcoin.
Below is John Vallisโ answer, as written in โ๐ฎ๐ญ ๐ค๐๐ฒ๐๐๐ถ๐ผ๐ป๐โ:
๐๐ผ๐ต๐ป ๐ฉ๐ฎ๐น๐น๐ถ๐โ ๐ฎ๐ป๐๐๐ฒ๐ฟ:
Money is the fundamental organizing and coordinating mechanism of a market, and as such, its qualities, which determine the functions which it either permits or prohibits, are highly consequential in both subtle and obvious ways. If there is an inherent unfairness in the money, as is the case with fiat, then that unfairness will propagate, through the money, into every corner and facet of the market which uses it โ which is to say, into the people who use it.
In this particular case, fiat is unfair because a certain (small) group of people are permitted to obtain it for free (to โprintโ it), while others must sacrifice their time and energy to do so. The result is, expectedly, the subjugation of the latter to the former. Such a market comes to increasingly reflect not the โwillโ of each individualโs choices, but those of a very small few, as they may siphon off purchasing power and deploy it in whatever manner they see fit. The inevitable result is an unnatural concentration of wealth and power in the hands of a select few โ those who control or have privileged access to the โmoney printerโ (or digital equivalent).
You may also characterize fiat as a โlieโ. While perhaps not intuitive or obvious, part of the reason why money is able to perform the stabilizing or harmonizing function which it does, is because it โcarriesโ information about the preferences of all market actors, and the associated time, energy, and sacrifices which were made to either act or not act on them (among other information). If there is an entity arbitrarily manipulating the money supply, all that information becomes corrupted and distorted, and the fidelity with which it coheres to the preferences of market actors, and the market circumstances broadly, is diminished. Decisions are thus made on false or imperfect information, and as such, due to their diminished coherence with โrealityโ, are more likely to be made in error, or to be more wasteful or destructive than necessary. The longer this goes on, the more such a money will erect a โfalse realityโ, increasingly detached from what individual preferences and action, in relation to the natural and social worlds, would otherwise have dictated.
Bitcoin, on the other hand, does not permit such arbitrary manipulations, nor any degree of unfairness from one user to the next. Everyone is subject to the same rules. The result is a scenario in which unfairness, and all the damaging consequences of it, is impossible, and where truth, rather than falsehood, is rightly the basis upon which people interact (economically).
Simply put, fiat is immoral, and the qualities that make it so, erect an all-encompassing system of incentives which inevitably influences those who (are forced to) use it. Conversely, bitcoin operates on truth and fairness, and thereby erects (or will erect) an all-encompassing system of virtuous incentives, which likewise will influence behavior in accordance with them.
Simply put, a fiat standard is immoral and destructive, and a bitcoin standard will be virtuous and creative.
John Vallis is the host of the Bitcoin Rapid-Fire and Portal Orange podcasts. He is a passionate Bitcoin advocate, and an enthusiastic explorer of the profound implications it represents.
Preorder your copy of โ๐ฎ๐ญ ๐ค๐๐ฒ๐๐๐ถ๐ผ๐ป๐โ, and ๐๐ฎ๐๐ฒ ๐๐ฝ ๐๐ผ ๐ด๐ฌ%, by contributing to our geyser (npub1kmwโฆxqk9) initiative:
https://geyser.fund/project/spiritofsatoshi