Bitcoin Has No Competition

A Weekly Series Of Essays About The Language Of Bitcoin by Alex McShane.

Lingua Contra Imperium

The Language of Bitcoin: 5

TL;DR – A myriad of monetary ruses are revealed to the general public through the scrutiny Bitcoin incites. From the onset, most of us couldn’t see the woods for the trees. For many, the simple technology of Bitcoin helped explain the extremely convoluted machinations of fiat, which were so pervasive as to keep generations of humans effectively viewing the monetary landscape at close quarters. Bitcoin is another lens, a constant measure, through which to view the world. Meanwhile, many are deceived about the state of things due to the all-consuming influence of inflationary credit expansion, which has a telescoping effect on the financial world.

Function 

Through its proof-of-work mining the digital world of Bitcoin’s infinite scarcity is grafted on to the physical world. Such a tether between these two realms hadn’t been achieved before with a distributed system. Bitcoin has the additional magical property that it can be transported through any communications channel, for a nearly inconsequential fee that transparently serves only to protect its value, and incentivize cooperation among its network participants.

There is an insidious misconception, or a popular misassumption, that many competing objects in this world are scarce.

There is only Bitcoin, and it is geographically independent, politically deaf, and out of any single entities control. Moreover its perceived value, which derives from its terminal infinite scarcity, can be transferred from and to anyone, anywhere on the planet, at any time.

This is in part what separates Bitcoin from every other cryptocurrency. It is not difficult to invent circumstances, or to imagine what might be the case. Altcoins are just an exercise in this, they belong to the realm of ideas. Ideas alone will not bring about change. Altcoins, NFTs, de-fi, all of that noise exists merely in the realm of ideas. In the real world, Bitcoin is the simpler, more practical technology that is subsuming and eclipsing the centralized proof of stake technologies, all of which look more or less the same from the perspective of a decentralized technology.

Alt coins are nothing but iterations of fiat, bringing to the market nothing aside from niche special technical languages that are effectively technobabble gibberish which serves to entertain. Altcoins are emergent from Bitcoin, direct copies and failing permutations. They are also dependent upon it.

Bitcoin solved the daunting problem of associ­ating events with points in time in distrib­uted systems. It is worth pointing out that Satoshi didn’t manage to make infor­ma­tion uncopyable. If you have access to infor­ma­tion, you can also copy it perfectly. Centralized systems try to obfuscate and police knowledge by avoiding and actively discouraging people from learning how to do this.

All information, including that associated with your Bitcoin private keys can be copied. This understanding is at the heart of learning to use Bitcoin, and protecting your privacy. Duplication is an inexorable trait of information.

This is a blessing and a curse. This law is what makes both good and bad ideas heedless and intractable. It’s also what makes patents and copyright law a perpetual losing battle, one that only persists through force.

It must be stressed that the impos­si­bility of associ­ating events with points of time in distrib­uted systems was an unsolved problem before Bitcoin. Solutions such as Bitcoin may be singular, but can’t be made single, because all information is copyable, alternative cryptocurrencies will always exist.

It is highly improbably that the set of conditions that led to the launch and successful bootstrapping of the Bitcoin economy will repeat in our lifetime with a currency that can do everything that Bitcoin does, and more.

Bitcoin as a solution cannot be put back in the bottle, and it cannot stay niche. Alternative cryptocurrencies will persist, but will pale in comparison to Bitcoin’s success, because they are and will remain centralized and subject ultimately to the whims of one person, or a small group, or even a large group of people.

Apolitical

Bitcoin is apolitical money. This is one trait that separates it from every other asset.

You might argue we will not find a solution to all political problems in cryptography, however, as Satoshi Nakamoto pointed out, “we can win a major battle in the arms race and gain a new territory of freedom for several years.” And we have and will likely continue to enjoy the opportunity to have freedom and property that Satoshi provided.

Many believe this freedom emerges out of a competition between various cryptocurrencies. This is a mistake. For what it does, Bitcoin has no competition. It is peerless.

In the expansive history of monetary mandate, censorship, and oppression, everyone alive had ideas. Bitcoin delivered a simple, actionable solution. Unforgeable, unstoppable, unconfiscatable transactions ordered and stored on a distributed network.

As long as honest nodes control the most CPU power on the network, they can generate the longest chain and outpace any attackers, and we can store and transmit property, value, and therefore uncensorable free speech across space and time.

The only requirement is that the good guys collectively have more CPU power than any single attacker. For over a decade that has been the case.

Bitcoin gives you the freedom to acquire and control property. This is a singular form of ownership. Bitcoin is freedom. It is unique in this regard. You can actually take ownership of freedom through Bitcoin. This is what it means to be running Bitcoin.

The problem with fiat is that its rules are forever incompletely explained. There is a degree of randomness brought to bare on all forms of alternative cryptocurrencies and fiat, because they’ve introduced a great amount of human governance and dictate into the system.

Humans are not maximally effective at policing themselves, because they are subject to the fallacy of infinite regress. Who watches the watchers? and so on.

This admits of a question: How is governance defined? In Bitcoin one has the option to run older versions of Bitcoin, and the freedom do whatever one chooses with one’s Bitcoin, without being cast out from the network. Our updates are agreed upon by a majority and adopted individually at will. Bitcoin is backwards compatible. And the burden of choice with whom or for what to transact rests solely on the owner of the transactions unspent.

There is no limitation imposed by the rules of the fiat game. They are not playing with a definite supply of numerals but instead with a system for constructing numerals indefinitely.

The fiat game was constructed on the premise that the highest number, positive or negative, takes the trick. The problem is the rules of that game have been abused to the point where it has become generally unclear to the population at large how the game works. In fiat, what is, and what is not money?

In fiat you are playing three-card monte with the fed, who provide the illusion of security, entertainment, and instant gratification (if you play nice), in exchange for the perpetual debasement of your wealth.

Instead of making this false promise, Bitcoin simply provides you with certainty as to how much property you have in this moment and in the next. Bitcoin is property ownership in a rented world.

So we are just quietly accumulating Bitcoin. Bitcoiners understand that only a terminally closed supply will maintain value long term, and increase value when priced against all other non-scarce assets.

In fiat you are constantly paying a permissionless convenience tax by way of monetary debasement on top of the outright taxes paid to fund wars and institutions that enforce the fiat network. Bitcoiners understand that any amount of money will forsake value ad infinitum when its supply is unlimited.

As a society we have grown accustomed to not a definite supply of monetary numerals but instead a system for constructing money indefinitely.

Every other monetary system is allowing people to decide at each moment at what rate to continue printing money, and when to tighten up, but it will never stop, there’s no incentive to. History has shown that governments can’t resist the temptation to debase society’s currency in order to enrich themselves.

Time

Bitcoin is a closed monetary enumeration that accounts for the asynchro­nous commu­ni­ca­tion that is inherent in every decen­tral­ized system.

Synchro­nous events don’t exist. Everything happens in plenty of its own time. From the perspective of a centralized system however, with a single line of sight, this would not appear to be the case. There is a sobering parallax effect when viewing the monetary landscape through Bitcoin’s decentralized system.

But infor­ma­tion, and even Bitcoin cannot represent the state of the world directly. And Bitcoin doesn’t pretend to do this. The state of things is not, nor has it ever be as any government tells you it is.

The Bitcoin blockchain is but one description of time within greater and smaller systems, orthogonal systems. All other cryptocurrencies have left out the essential decentralized feature of such a description of time and try to mask this with accessory features.

There is a wealth of monetary experiences revealed to us by the scrutiny Bitcoin incites, which were hidden or abstracted from view before. One of these is the understanding of our time as an asset we must constantly trade. Time is not money. But time, like Bitcoin, is scarce. 

12 September 2021

Read The Language of Bitcoin: 4: “Bitcoin And Existential Risk”
Read The Language of Bitcoin: 3: “Bitcoin: The First and Final Rival Money”
Read The Language of Bitcoin: 2: “Bitcoin Alleviates Future Uncertainty”
Read The Language of Bitcoin: 1: “BTC Is The Best Explanation For The Way Money Is”