Bitcoin : Bitcoin’s First 9 Months is it still relevant?
These days (or years) do a quick search on the internet about ‘bitcoin’ what do we get? Always ‘price’ related news and info right? That is, price in terms of Fiat money we’d recognize. This is understandable as today we all live in a world where people are used to expressing and measuring ‘value’ in terms of Fiat money. But there were times Bitcoin was not associated in any way with Fiat money right? I mean before BTC became a tradable commodity. Yes I’m talking about the time before New Liberty Standard used a bunch of estimates and averages an did the calculation of BTC’s exchange rate. A few extra months would lapse before such rates became acceptable by anyone. The point is that there were about 9 months where technically there’s people out there (Nakamoto and the early cypherpunks) and there’s definitely tradable goods and services among these people and there’s this new money thingy these folks all recognized and believed in (it’s designed to function like money for God’s sake). Now I’m just wondering what really went wrong? There’s gifting of BTC (Nakamoto to Finney) but the use of BTC as medium of exchange for goods or services never happened. Especially comparing to places and scenarios like a prehistoric tribe or some isolated community on some isolated island in the Pacific or one of the prisons or PoW camps where money and the use of money actually happened? What’re the factors that made the differences? The prison/pow camp scenario would be more relevant as we’re talking about recreation of money in a world where there’s already money we’d all use and recognize.
I came up with the following explanations (which might or might not be relevant in designing of future crypto or crypto based systems):
i. Unlike the rather CLOSED OFF environment of prison or island or prehistoric societies we all live in an open world of Fiat money and have the CONVENIENCE to use it. Fortunately or unfortunately same would apply to the c punks. They’d just be using regular money to buy things.
ii. Decentralized internet money such as BTC started off with LOOSELY CONNECTED (Nakamoto communicated with his penpals using a very primitive mailing list) and SPARSELY POPULATED early adopters from around the world. It’s hard to trade things for real. Buyer seller connection was not there.
iii. In isolated, tiny but well connected communities when it came to adoption of money DECISION MAKING would more likely be centralized, authoritarian, quick and arbitrary (I’d call it ‘decreed agree’).
iv. In such centralized settings one of the most frequently exchanged commodities whose VALUE could be most conveniently used to quantify the value of other commodities became the agreed (and/or decreed) commodity money within a community. And in the absence of Fiat money (island, tribe, or jail). These days we’d have two totally separate and different things or vehicles when it comes to the concept of value. One is company stock which is supposed to be a vehicle for growth and people agree and disagree on its value expressed in Fiat. The other is Fiat money itself that we’d all know and use as a medium of exchange for goods and services, which must have a relatively stable value or purchasing power.
v. The size of ecosystem for such isolated and closed off community would be relatively STABLE in terms of size of population, tradable goods and money supply. BTC was more or less an open system.
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Bitcoin
Bitcoin is a distributed, worldwide, decentralized digital money. Bitcoins are issued and managed without any central authority.
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