In the old arcades, there were two fighting games competing for attention. One was Street Fighter and the other was Mortal Kombat. You could choose which one to play, but once you chose a console, you couldn’t use the characters of one to fight in the other.
I remember this every time I find myself in a bitcoin debate.
Brett Scott is the author of “The Heretic’s Guide to Global Finance”. His next book on the war on cash and the dynamics of digital currency systems will be published in 2022 by Penguin Random House and HarperCollins.
I have become a Bitcoin critic, and when the price goes up I often find myself drawn into depressing skirmishes with crypto evangelists. They are depressing because my opponents refuse to choose a game in the arcade.
Some Bitcoin enthusiasts don’t know they are doing this, but others are. They present themselves as playing a game, but in reality it’s a game that doesn’t even exist, and they misinform a generation of young idealists in the process. Let me explain and tell you why this is really important.
Imagine that Bitcoin was originally a character in a game called Money Wars, but due to a dispute there is now a separation game called Titans of Trading, which also includes Bitcoin.
In Money Wars, bitcoin is presented as a form of money fighting the forces of fiat money. Will he triumph over the infamous Federal Reserve boss!
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In Titans of Trading, bitcoin is not presented as money, but rather as a rising star in the investment asset market, competing with other assets. Will it beat the dollar returns of the stock market!
In both games, you can choose to play as bitcoin, or – alternatively – as a fighter who is antagonistic or dismissive of bitcoin. For example, my (anti-bitcoin) character in Money Wars might fight the Fed boss, but also thinks bitcoin is a distracting annoyance they need to go first.
So, in Money Wars, I might try to bolster your bitcoin character by criticizing its deeply conservative monetary ideology. I walk over saying, “Imagine a world in which Bitcoin is money, and everyone needs it to access goods and services.”
Then I crouch down for the attack and say: “Many people in this world need loans to buy homes or start small businesses, but because the supply of bitcoin is so limited, its power is growing faster than borrowers can generate the income to pay it off. The amount of things to sell to pay off a 10 BTC loan is growing more and more every month. “
Then I unleash the uppercut with “This leaves borrowers in deeper and deeper bondage. As money, Bitcoin would be like a form of strangulation that keeps the system’s creditors in power! “
In Money Wars, the bitcoin character can block and counterattack by highlighting the evils of hyperinflation, but in Titans of Trading, the characters change, as do the critical and defense combos. Here, the bitcoin character is an asset in a money market, and I could throw a simple jab by saying: “Bitcoin is just a blank digital object kept in a sophisticated decentralized scaffolding. You’re just pumping it up for fickle dollar gains. Why not just buy stocks, which are actually anchored in the real economy ?!
Again, you can block and counter-hit by telling me how spectacular the dollar wins are and how they empowered the early holders. If you’re skillful, you might even do a sophisticated countermovement, arguing that due to its mobility and dollar cost, the object is used for forms of barter. cleared trade. This game is fun, because we agree that your bitcoin character is a object on a market, rather than the money behind a market.
It turns out that expecting to play the same game is wishful thinking, as the crypto evangelists’ dominant attack mode is tantamount to using Mortal Kombat’s Raiden to throw lightning bolts at Street Fighter’s Ryu. They use the strengths of their Titans character against weaknesses in a money war opponent.
It is typical for bitcoiners to complain about inflation (Money Wars), before using the rising price of bitcoin (Titans) to explain why it is a “deflationary currency” (Money Wars), which will be a great savings way (Titans) to empower the unbanked. (Money wars).
OMG, where to start. It is either an asset that appreciates valued in dollars (Titans), or a deflationary currency used at all costs (Money Wars). Pick a game!
Of course, it’s possible that you entered the arcade in a confused state and didn’t know that Money Wars and Titans are different. After all, they have a common character. Can’t you just combine the powers of this character from both games?
No. The games are contained in separate consoles. The common character cannot jump from one screen to another.
Learn to see the difference
Crypto evangelists cannot recognize the difference between an appreciating asset and a deflationary currency. Why is it?
Well, to clearly see the difference in the games, we have to accept that monetary systems underpin market systems, but many people – often under the influence of standard economics – believe market systems underpin monetary systems. If you have this tendency to think of money as “good in a market,” it will be very easy for you to narrow down the distinction between money and superficially “money-like” things valued in money.
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We usually don’t make this mistake in a supermarket. Despite the fact that the products we see there are extremely diverse, they all have the same $ symbol on their prices. So we find it easy to distinguish between money and “whatever is in the supermarket”. But if a mobile digital object like bitcoin appears in front of you with a dollar price, you’re likely to put it in a hybrid category. Because of its branding as a “coin”, you are now inclined to regard it simultaneously as “money” (even though there is not a single country in the world that has supermarkets. with BTC prices) and a “thing priced in money”.
This is why the bitcoin debates are so absurd. Adult adults claim that in the future all products will carry BTC symbols, but in the meantime they will hand someone dollars to get it. This is how you simultaneously play Money Wars – in which all goods pass through Bitcoin – and Titans, in which Bitcoin is routed through the dollar system like an item in a supermarket.
For those of you who have done this, you can take comfort that a character in Titans might indeed offer some forms of protection against a boss-man in Money Wars, but only if you realize that many other characters from Titans can too. Just as you can buy farmland or rare postage stamps to escape inflation, you can buy bitcoin to do the same.
However, Bitcoin does not “fight” against the US dollar. He fights against scarce postage stamps for investment dollars, with the side effect that this could create a hedge against inflation. This form of inflation hedging, in which you take money out and then reintroduce it at a later date, is profoundly different from maintaining a ‘deflationary’ form of money that becomes increasingly powerful against goods that are sent there.
Why gambling really matters
Now let’s move on to the darker reason for this refusal to choose a game. All the rhetoric about an anti-inflationary monetary system that we find in Money Wars is truly bogus. marketing layer for bitcoin, and is used by its promoters to attract attention to help them in their real game, which is Titans.
These promoters are the worst. Bitcoin is actually just an asset that fights other assets, but they cynically condition it with a messianic backstory about how it actually fights the dollar. They keep telling this old story because it makes the crowd happy. But then bitcoin enters the ring and starts competing with stocks (like GameStop) for investment dollars.
It’s tricky but cowardly because anytime someone tries to criticize one of these promoters, they can change the game to “counter” any attack. I’m in Street Fighter about to cut them off, but they disappear, reappear in Mortal Kombat, slam an unmanned opponent there, then reappear waving a victory flag.
They are deliberately spreading a mind virus, a virus in which you can defeat the evil boss-man fiat while simultaneously raving your dollar winnings. Right now, the Bitcoin language is like a scrambling zone full of ball designed to disorientate the current debate, and far from an interesting area of ambiguity where new realities can emerge, it is a boring technique of equivocal, in which imprecise language is used to present one thing as another. Unfortunately, it is becoming so common that it confuses a generation of young people, who are unable to learn Street Fight.