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364 sats \ 12 replies \ @elvismercury 20h \ on: Orange pill immunity bitcoin
This story stands in for a lot of stories, I think, that the btc world needs to come to terms with: if people don't have a real felt need for the thing, you trying to talk them into it is unlikely to work. It turns it into the usual hard-sell, like when those guys come to your door and try to convince you that your house is infested and you need them to come in and spray chemicals everywhere to kill whatever is infesting it.
The response to this is usually educate them, so they develop an urgent need for the thing and there's something to be said for that; but jesus, could there be anything more plentiful than examples of where this is fruitless? The least controversial advice in the universe is probably that if you eat well and exercise most kinds of disease are optional, and you will feel better almost immediately in every aspect of life, and it doesn't even matter tremendously what "eat right" means to you, and "exercise" means to you, since anything aside from the current default would be a vast improvement for almost everyone.
And yet even this behavior, which should provide the most visceral possible lesson than every self-interested person should embrace, goes ignored.
I am evolving toward a new understanding, and it involves looking at what is the real, honest-to-god, actual use case for btc, as demonstrated by the actual humans inhabiting the actual world, and not how imaginary people ought to behave according to us. That understanding has implications that I'm trying to work out.
actual use case for btc
Here are the three biggest imo
- debasement resistant savings
- cross border payments / globally portable asset
- micropayment driven apps like SN
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I think these are use cases, e.g., btc can be used to do them. But how much is really going on?
If we adopt a working definition of "use" to be something like where have people sacrificed their time and money to transform it into btc? then when you look at the person-money and person-hours so invested, I think #3 is effectively zero; #2 is negligible; and #1 also minimal, at least, if you divorce the "speculation" use case out of it.
I am just making all of this up, so reasonable people can disagree. I have no insight into shadow banking and how much fiat Russian oligarchs or CCP elites have secretly pumped into btc. I'd be very interested in analyses that pull fewer things out of their ass than I am doing here.
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I think these are use cases, e.g., btc can be used to do them. But how much is really going on?
I don't think there's much point drawing a sharp differentiation between savings and speculation. All choices to save in a certain asset vs another is a speculation on their relative future exchange rates.
So i'd say 100% of bitcoin holders are engaging in debasement resistant savings.
It's hard to know how many bitcoiners are using it for crossborder. I think a more relevant metric would be, what % of bitcoiners who have a need for crossborder payments, use bitcoinf or cross border payments. An overall % of the whole population isn't helpful because few people need crossborder payments to begin with.
similarly for usage of micropayments. How many bitcoiners use things like nostr and SN to zap?
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I don't think there's much point drawing a sharp differentiation between savings and speculation.
You're free to define the use case as you like, of course, but if there were a safe "preserve my current buying power" option that I had high faith in, I'd re-allocate a bunch of my btc stack to it. Hoping for "btc to $1m" loads on a different principal component than "don't let my money get inflated away" in my own mind, and I don't think I'm alone there.
Put another way: I think the overwhelming amount of ETF money that flowed into btc was not stemming from the "preserve my savings from the melting ice cube" mindspace. I don't have a lot of friends who have actually bought btc, but 0% of those that have are worried about monetary debasement. It's probably relevant that these are just normal people I know, not cryptotwitter doomscrollers.
I think a more relevant metric would be, what % of bitcoiners who have a need for crossborder payments, use bitcoinf or cross border payments.
Disagree again. The crucial point that I want to make is that you can't condition on bitcoiners. Well, you can, but that's a different question. The question I want to ask is:
A: m(use btc | need cross-border payments)
not
B: m(use btc for cross-border payments | bitcoiner ^ need cross-border payments)
Where m is the magnitude of value realized by that use case.
I believe the distinction to be crucial to get at the market-sizing question: if you need something that bitcoin ostensibly provides, and you're not using bitcoin for it, that's telling; and if there isn't much absolute need (e.g., small m) for the thing itself (e.g., cross-border payments, micropayments) then that's also telling; and (a subset of the previous) if you need the thing, and are using btc for it, but you are of little economic consequence because you're a poor refugee, than that's also suggestive of btc's future purchasing-power prospects.
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The question I want to ask is: A: m(use btc | need cross-border payments) not B: m(use btc for cross-border payments | bitcoiner ^ need cross-border payments)
The problem with this framing is that
m(use btc | anyone) is already pretty low, so m(use btc | need cross border) will also be low simply for the first fact. It doesn't really tell us much about whether bitcoin is good for that use-case.The reason I want to condition on holding bitcoin is because it tells us more about whether bitcoin is actually useful for that purpose. If
m( use btc | need cross border) is low, that could just tell us that few people know how to use bitcoin, or even hold any bitcoin.... it doesn't tell us whether cross border payments is a good use case for bitcoin.My sense is you just think that that there's no demand for the use cases of bitcoin, not that bitcoin isn't useful for them. That is, your contention is:
"Even if
m(use btc | have btc AND need cross border) is high, m( need cross border OR have bitcoin) is low" ... and similar for debasement resistance.Basically, the things bitcoin is good for, few people care about.
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My sense is you just think that that there's no demand for the use cases of bitcoin, not that bitcoin isn't useful for them. [...] Basically, the things bitcoin is good for, few people care about.
That's what I'm afraid of, yeah. With a slight tweak:
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It's not so much "few people" as "small resultant m"
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What btc is good for, and that people do care about at large m, is a certain type of speculation. It is demonstrably the case that this is so.
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What is not demonstrably the case is that the m is very large for the common catechism that we can all recite, about how btc is sovereign uncensorable non-state money, blah blah.
Most of the response / advocacy is invariably aimed at category 2, and thus SN is replete w/ calls to educate the ignorant masses about the Good News of btc, get them to spend their sats on hamburgers, etc. I'm glad people are doing this. I bet it's doing work in the background. In fact, I'm confident that it is. But it's not moving the needle right now.
I'm coming to believe there's a nuanced and complicated relationship between type #1 value, and type #2 value, that I want to explore.
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Yeah, I agree with you. I posted in another comment on this thread that I think a realistic outcome for bitcoin is that it becomes the Tor of money. Still around and being used, but never achieving mainstream adoption
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debasement resistant savings
this is the only approach I use for orange-pilling anymore.
my orange pill was something similar.. I had been "Investing in the stock market" for a few years, when I realized that index funds were just socialism (thanks Matt Levine).
when I found bitcoin, it made better sense to me than "investing" so I stopped buying tax advantaged index funds for the gains and jumped right into saving in bitcoin.
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Agreed, and I think these four rival those also:
- seizure resistant savings
- digital payments without credit card or bank fees, keeping money local
- digital payments with anonymity or synonymity
- secure savings for the vast amount of people in the world who can’t legally have a bank account
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the real, honest-to-god, actual use case for btc
I'd put it even stronger: we need use cases that can only be achieved by using bitcoin. Cross border payments (I did some work for people based in Portugal and we settled in bitcoin which was delightfully easy) might fit the bill. But that's not even quite what I mean.
Maybe it looks like in-game money for gamers or tipping and payments for adult industry or marijuana industry people. People will gravitate to Bitcoin when they have to, when it's the only way to do something they really want to do.
This is one of the reasons I like SN so much. It's a thing that can't really be achieved with anything else (I suppose we could all buy CCs with credit cards and then shuffle them around and withdraw back to some banking app or something, but I think it would be way more clunky than lightning and probably illegal unless kyc'd and regulated).
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This is one of the reasons I like SN so much. It's a thing that can't really be achieved with anything else
Agreed. The 'unique use' is a good criterion, I think; but it must be united with actual demand. Actual demand for SN, or Nostr, which can only be realized w/ btc, is low, and shows little sign of growing, as best I can tell.
This doesn't mean it never will. But I sense negligible actual demand for it right now, which is something to consider given the obvious benefits of SN vs any other thing. And yet most people are not hungry for those benefits, and I don't believe anyone will be harangued into it.
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they develop an urgent need for the thing
Agreed. Bitcoin will never be "useful" if there's no "need". The thing is to find where that "need" fits well.
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