Bitcoin Mountain Problem
Hyperbitcoinisation describes a state- an ideal- in which all the world’s money has been subsumed into Bitcoin. Transactions are settled in Sats on the Lightning Network or sucessor, and consumer shrinkflation (resizing down products and hoping you don’t notice) or run-of-the-mill inflation are a thing of the past.
In this state, where new money issue is controlled by code, holding is encouraged and wanton government debt is a thing of the past. The exchange of Sats for goods and services occurs where there is a genuine need, and each Man is his own bank.
This vision explains how Bitcoin can grow and grow almost indefinitely. Despite the wild swings of the past (and present), over time Bitcoin is not volatile, but a store of value. However if you can’t make the same case for your Alt Coin- why near infinite growth is a feature of the code- then perhaps you are participating in at best a gamble, and at worst a Ponzi scheme. Despite the gains you may make, despite the glinting watches and the pool parties, the wide-eyed followers retweeting your every thought, there will be a top, and a permanent retracement against Bitcoin. And whoever buys that top will learn the hard way that gambling is a zero-sum game.
With this zero-sum game in mind, I am going to embark on a thought experiment to explain the quandary of Bitcoiners coexisting with Alt-coiners.
Imagine Bitcoin as a mountain, far away from the city-states and their central banking. On Bitcoin mountain, each citizen is a free Man, not a number. His wealth is preserved (but not increased), and he is free from inflation and debt.
The further down the mountain sides you decide to make your home however, the more money people agree you can make. The further down the mountain we get, we come to a valley plain- man made, by a dam. Those camped next to the dam tell each other they are making the most money of all. This may or may not be true- what is important is that they believe it.
Fortunately due to the magic of a thought experiment, everyone who is NOT on Bitcoin mountain has access to running water, from the hill slopes to the dam. The waste water is piped and dumped on the other side of the dam. As the populations grow, and time passes, more and more water builds up behind the dam. At some point it seems clear to some that the dam will burst and flood the plains.
Don’t worry, say the valley folk. Dam bursting is a thing of the past. Other dams have burst, but this one won’t. Maybe we can repair the dam. Or maybe we won’t have to, and it will hold forever.
Here is the dilemma of Bitcoiners, and a simple question; what do you do?
One choice is to stay on the mountain, and warn people that the dam is dangerous. If enough people listen and everyone moves from the valley onto the mountain, the dam will never burst, and the warning will be seemingly for nothing. Perhaps then the camp sites will start again migrating further and further down the mountain towards the valley again- after all, there is a persistent rumour that you can make more money next to the dam.
Another option would be to stay on the mountain, and warn no-one. The valley folk are adults, they can make their decisions and take their own risk. So what if they drown? In fact, you welcome the day the dam bursts. That will serve them right for their greed.
Maybe you will move down the mountain yourself. Just a little way. After all, everyone else is doing it, as long as you don’t go too far, when the dam bursts you’ll probably be above the flood line. And you’re not going to stay long anyway, you can always make a little money and then move back up the mountain, with slightly more Bitcoin than you had when you moved away.
That is it. That’s the dilemma. Which Bitcoiner do you want to be? And does your real life persona reflect this?