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Sofia Angel

Beauty Connoisseur who loves Bitcoin

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On the other side, Anthropic's draft IPO prospectus showed an $80.7 billion net loss in H1. Sounds terrifying, but about $72 billion of that is an accounting charge tied to convertible notes whose value exploded as Anthropic's valuation went parabolic. No cash left the building.

When the price rises the arrangement feels like wealth, with everyone feeling like a genius. However, when the price falls the custodian issues a margin call you cannot meet without selling or topping up your balance with more Bitcoin, at the price the custodian's own desk has just helped establish. This is the 1974 unallocated-account pattern with one improvement, where instead of asking you to surrender gold in exchange for a paper claim, the complex now asks you to surrender Bitcoin in exchange for the “privilege” of going into debt against it. Fractional-reserve banking is fraud because the bank promises redemption to every depositor while lending the same funds to multiple borrowers. The Bitcoin-custody-plus-loan product recreates the fraud at the asset level, with one deposit and one borrower; both you.

The point of this brief walk down memory lane is to serve as a reminder that in times of economic crisis it’s always the unsuspecting public that is psyoped into paying the consequences whilst the architects get fat government handouts.With sovereign debt levels far exceeding global GDP, inflation raging, high energy prices thanks in part to the conflict in Iran, an out of control money printer and a higher unemployment rate; it would be a gross understatement to say that an economic iceberg is on the horizon. 

In a 1974 cable released by Wikileaks, primary dealers explicitly planned to use gold futures volatility to "diminish initial demand for physical holding and negate long-term hoarding by US citizens." Furthermore, these primary dealers were of the opinion that U.S. citizens, on the whole, weren't psychologically prepared to switch from small scale gold purchases to large scale, long term bullion hoarding except maybe for gold coins. To put things in context, this was just after it was now legal again for American citizens to own physical gold and the predictions of the primary dealers turned out to be true. As of today, paper trading of gold surpasses physical demand for gold and is 200 times larger than the latter. 

Imagine measuring someone's height with a ruler that shrinks by 5 percent every year. Eventually, everyone would notice that something was wrong with the ruler. Yet when it comes to money, people routinely treat the monetary unit as though it were an immutable yardstick when it’s not. Money is itself an economic good, and its purchasing power is determined by market conditions.

As you can see the entire conversation revolves around one question which is, how high can the price go? This way of thinking is problematic because the number is denominated in fiat. If Bitcoin's fundamental proposition is that fiat money is structurally unsound, then treating the number of fiat units required to purchase one Bitcoin as the ultimate measure of Bitcoin's success is a profound conceptual error.

If money were no object, what would you build? What would you be doing with your time? Instead of being a cog in the fiat machine, how would you be creating value right now? I don’t mean this in a purely economic sense, for example a mother’s presence during the formative years of her children is priceless and can never be quantified financially; even the idea that all value has to be only financial is a fiat way of thinking, but i won’t address that today. I will leave you with these thoughts; if the smallest unit of civilization is the individual then what do you intend to build with your stack? Are you just looking for a comfortable retirement or to build a legacy that will give your descendants and possibly even the world, a headstart? What’s the point of owning your money, if you cannot direct it towards causes and people that matter the most to you?

If you don’t truly own your own money, how is it useful as a civilizational building tool? How will it ever be useful to you as an individual to build for posterity if it’s half life is 50 years and every other investment tied to it can be arbitrarily seized or frozen? In the fiat world, you as the saver are always the patsy, whose economic opportunities are largely constrained by your geographical location. Bitcoin reverses this structure, and it’s precisely why a lot of people dismiss it. When all you have ever known is serfdom freedom looks dangerous and irresponsible.

A better civilization can never be built from the top down by institutions that have the power to dilute the wealth of the individual, at the barrel of a gun. A civilization built on fiat is a civilization built on dependency. Citizens depend on the state to manage the stability of their money, they depend on banks to access their money and they depend on politicos to preserve their purchasing power. This dependency creates a relationship of submission where the citizen is a subject of whatever monetary system he lives under, not its master. A civilization built on Bitcoin on the other hand is a civilization built on sovereignty for the individual. You hold your own keys, verify your own transactions and your purchasing power isn’t subject to the whims of politicos or a committee of central bankers. This sovereignty creates a relationship of responsibility, where you are the master of your own economic destiny. This is the difference between serfdom and freedom.

One of the ways that money can be defined is as a technology that of communication and memory or a ledger that enables you to translate your expended time and energy into a portable, storable claim on the future labour of others. Civilization itself, which is the ability to cooperate beyond the immediate tribe and build complex systems/structures, requires a ledger that accurately records this energy exchange across time and space. When we compare Bitcoin and fiat through this lens, analyzing their original stated intents, we see two diametrically opposed worldviews. One is designed to empower the individual through proof of work and objective truth while the other is designed to subjugate the individual through coercive manipulation. In other words, what’s important to understand is that whichever monetary system better protects the individual’s ability to store value across time is the one better suited to civilization building, because civilization is fundamentally a long-time horizon project.