Author: Shinobi, Bitcoin Magazine; Translator: Wuzhu, Golden Finance
Mircea Popescu is a mostly forgotten figure in the space, but he was an early and highly influential cultural figure who faded from the public eye and eventually "accidentally" drowned off the coast of Costa Rica. He was a pretty crazy and eccentric guy, but he left a lasting impact on the space. I think he was essentially the godfather of what people think of as "toxic extremism" today, although compared to those who claim that label today, he makes them look like overly sensitive and whiny children.
One of his most informative posts, in my opinion, is his thoughts on the price of Bitcoin and its long-term market dynamics since 2013. He discusses the dynamics of the interaction of supply and demand, and in particular the mentality of current Bitcoin holders, who may or may not be as motivated to try to accumulate Bitcoin as the fiat currency system deteriorates compared to the average consumer.
He frames the supposed friction between the two groups as a stalemate, where current holders don’t have much incentive to give up their Bitcoins, and if Bitcoin holders do, there’s no real remedy for people trying to get out of devalued fiat currencies.
He suggests three possible ways to resolve this stalemate.
“One is that consumers capitulate, the price of Bitcoin goes up to thousands of dollars or so, and people rush to get society out of this dysfunctional standard.Banks start accepting Bitcoin deposits, Bitcoin hedge funds pop up everywhere, the Chairman of the Fed, the President of the ECB, and everyone else comes to Timisoara whenever they want to take action, get my endorsement, and so on.”
This seems to be the path we’re on right now. Abandon the existing system, integrate into the legacy financial system, worship the early adopters and Bitcoin as a solution to the systemic problems of fiat currencies. This is what Bitcoiners are currently cheering for our path forward, citing every little piece of news from banking institutions, ETFs, investment funds as evidence of their capitulation! We win!
This is pure delusion. Trump’s pandering to Bitcoiners seeking campaign funds does Bitcoin no real good, he is and always will be a fan of the US dollar. His mentality is based on the idea of a money printing press, exporting our inflation around the world, and that is a very positive thing for American interests. The Democratic Party is overwhelmingly hostile to this space for similar reasons.
Even if such a future actually becomes a reality, and not just in name only, it will be a very scary and depressing future for anyone who sees Bitcoin as a tool for freedom and sovereignty. Using Bitcoin will provide that for almost no one. Hedge funds, banks, ETFs will all become key holders for the vast majority of people. No one will truly have any degree of freedom, it will be the same financial system we have in existence now, where nothing can be done without seeking permission from some overlord who actually controls your money. Regulation will not foster more competition in this space, existing players will use their revolving doors to encourage capture and high walls around their privileged position in this role.
This path essentially means the failure of Bitcoin as a tool for freedom, and the same game we see playing out now, imposing slightly stricter rules on the privileged few who get to sit at the table.
This path essentially means the failure of Bitcoin as a tool for freedom, and the same game we see playing out now, imposing slightly stricter rules on the privileged few who get to sit at the table.
“Another reason is that consumers revolt, governments intervene, and we all spend the rest of the decade fighting each other.The price of Bitcoin also rose to thousands of dollars, but the energy, effort, and resources that could have been used for easy surrender and effective submission were wasted on an ultimately doomed effort to defeat the strong with the weak. Neutral and uninvolved governments won, and as the dust settled, the balance of macroeconomic power had shifted away from the Western world and toward China, Iran, Brazil, and others.”
This is how they openly fought against Bitcoin. People actually started moving to Bitcoin en masse, and governments reacted reflexively by trying to prevent that from happening. From now on, things will fall like dominoes, and as Bitcoin starts to become a more important aspect of global finance outside of the traditional financial system, the countries that oppose and refuse to let Bitcoin happen will only end up suffering the consequences, while the smaller, more adaptable jurisdictions that either stay out of it or embrace the change will ultimately benefit greatly.
A world where Western governments make it an extremely difficult task to use Bitcoin, but people persist anyway. The rest of the world with brains either stay out of it or actively embrace it, while the West spends all its energy and resources futilely fighting the inevitable. The rest of the world experiences a financial renaissance, while the Western world stagnates, and its citizens are forced to fight tooth and nail all the time to maintain some level of economic success (or even just stay afloat).
It sounds harsh, but this is the world I want to see. A world where the West's domination and coercive control over the rest of the world gradually diminishes. We have no right to dominate the rest of the world the way we currently do, and this path forward will gradually take away our ability to continue to do so. Western citizens can embrace Bitcoin to defend our individual freedoms and sovereignty, and in doing so, protect us from the collapse of corrupt institutions.
The victory of the revolution was not easy. For Bitcoin to truly live up to what many of us expect, it must ultimately take a painful path. That means people must choose to take that path. Many in this space think that governments will easily give in and let Bitcoin win, but that is only a feint to feint and take Bitcoin.
We need to push to build around them, build in parallel, force them to act. If they don't actively fight back, then something else will. And that's not good for us.
“The other trend was consumers rebelling, entrepreneurs stepping in, and by the end of 2015 there were somewhere between 10 and 1 million different Bitcoin forks around the world, each with a monetary base worth about $1.The size of the market between Bitcoins, the attendant complexity and confusion made it nearly impossible for the “average person” to manage it all. The hedge funds and banks (those who were slightly better at using Excel) who traded in this nebulous complexity made a killing and became a major driver of global economic growth.Not only was the situation as bad for consumers as it was currently, but for everyone, he once again clearly demonstrated that rebellion = Being pushed harder and longer with a thicker, pointier tool. Conveniently, too, the thing to rebel against becomes more nebulous and elusive. On a scale of probability, this seems the most likely outcome, as history always moves in the direction of squeezing the “ordinary people” the most brutally. ”
Popescu thinks this is the most likely outcome. Bitcoin keeps splitting, slicing off countless branches from the original Bitcoin. Each region or group of people with different ideas splits off into their own different network. The network effect keeps eroding until it becomes localized, spawning more sub-shards than one can keep track of.
Everyone thinks this is over, that this door is just a phase we went through during and after the blocksize wars, and that it is closed forever. This is delusional. Nation states are adopting Bitcoin, financial institutions that primarily set government policy are coming on board and integrating it into their systems.
The world is a game of coercion and blackmail politics, with the US invading countries and slaughtering hundreds of thousands just to get commodities to flow the way it wants. It is naive to imagine that they and other interest groups won’t fork Bitcoin for their own benefit around the globe. I would go so far as to say that opening the first door and the quick “surrender” and grabbing of Bitcoin by these people almost guarantees that the final door will eventually open.
This is an abject failure. Fragmentation, no single network effect to enforce true supply scarcity, and more importantly, no rules to influence global economic participants. A brief respite and then an immediate return to the game as we know it now. A complete failure of any kind.
All three doors are still there, and we haven’t walked through any of them yet. Which one we will eventually walk through is anyone’s guess. Bitcoiners need to have a little humility and admit that not only are we not close to winning yet, but that the possibility of failure still exists. And there are many ways to fail.
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