or: A quick update on how everyone got high on DeFi and lost their cool

So I decided to write about this because basically every Bitcoin maxi- was too dense to explain what the actual store of value proposal is, and instead just started calling it "an uncorrelated asset" because these asshats are obsessed with wall st. YEAH POMP.

To understand why I’m right, you need to understand that not everyone will accept that Bitcoin is currently a store of value. Why? Because “the dollar number goes down”. Yeah, you read that correctly; the great store of value quality is dethroned by its inability to remain stable in dollar value. I find this funny coming from the public, but I find it even funnier when it comes within the crypto space, because these people don’t even know what they believe in when they abandon the store of value narrative. Let me explain.

What is store?

Blockchains are useful in Bitcoin’s case because they can store a distributed ledger that doesn’t change over time. Bitcoin is a ledger that states with certainty where every network transaction is going and has been. Transactions can’t be reversed, altered or blocked. Nobody is in control of bitcoin because it is a network that operates as a collective: everyone who contributes to Bitcoin’s ability to give these transactions the assurance that it can.

There is a common good; security in the form of immutability, and the collective profits from the network’s social subsidy in order to assure that the network lasts indefinitely.

As long as the network remains secure, it should theoretically remain profitable in the long run, which theoretically maintains its honesty and so on.

While it is acknowledged that none of these networks are guaranteed to remain secure, we work with high probabilities that they will; and furthermore, we can introduce more risk mitigating adjustments in the ecosystem over time.

The most easily imaginable case of risk mitigation is having multiple settlement chains based on various economic models.

What is value?

Obviously value is subjective, but isn’t the “subject” always defined? We need things like Money, Gold, Houses; things that are difficult to obtain, because that difficulty is overcome by our desire to express the meaning in the scarce acts we do. Therefore value is the scarcity of representable meaning.

A paper with a line through it can have meaning, but it isn’t scarce, therefore not valuable. Meaning is represented in words, ideas and objects.

Bitcoin is an idea. A meaningful primitive like Bitcoin, which has a ledger that cannot be changed, has inherent value in its ability to form a unified idea within the human consciousness. This is scarce. In an era of manipulation, uncertainty, insurgency, and psychological warfare, people are dying for a unifying idea. One that can act as a settlement for disputes, confirmation of events that you didn’t witness, and a promise to the people using it that it won’t change on them. 

Store + Value

Bitcoin has a simple yet profound ability to secure Event Based Information. Now these events in Bitcoin’s context are scarce, limited, and costly, but Bitcoin’s high hash rate makes it the most reliable settler of multi-party events on the planet, and in human history.

As I’m writing this on March 9, 2020, the global market is heading into a recession. Trust around the world will be defaulted in the form of bailouts, debasement of currencies, market manipulation and so on.

Bitcoin doesn’t share this problem. Everyone is held accountable. Bitcoin is incredibly limited in capability. It can’t do many transactions, but it wasn’t supposed to. Sure “Satoshi Nakamoto” thought it was supposed to be digital cash, but Bitcoin as a transaction ledger turned out to be a super primitive primitive. Suddenly, many new use cases were thought of that Bitcoin wasn’t optimized for and we realized that this would become the “Protocol Era”.

Currently, Bitcoin has the highest hashing power by far. It offers finality in transactions that is unparalleled. Due to tradeoffs in desired outcomes, a wave of new primitives followed bitcoin.

Now some can easily point out that Bitcoin’s technology is dated, inefficient, and even inherently flawed in token design as I believe; but Bitcoin has catalyzed an entirely new economy based on radical and trustless principles.

The quality of a store of value in this context is an ideal asset that has best in class security, is non-amendable, and can settle disputes in less secure environments. The records are simplistic and well distributed, and these are really the biggest qualities we want in a Store of Value; something that can operate as a security anchor/settlement layer for preserving the state of assets.

The market price of a Bitcoin does not determine its store of value properties, the security does. Its high hashpower and supply cap is the root of its storage properties. Bitcoin is not without its flaws; I could write for years about the potential issues with Bitcoin, but I could do the same about the bridge I cross everyday for work. People still use it; People still believe in it.

Bitcoin is useful because people understand how difficult it is to cheat its system as it currently stands; a lot more difficult to cheat than most modern systems in play today.

Remember when I said at the beginning that people defame the Store of Value claim by saying “dOllAr nUMbER gO DoWn”; Well you know what denomination doesn’t go down? BTC. Bitcoin is a store of value.

Store of Value is a term meaning value doesn’t degrade over time. A mesh net isn’t a good store of water so you use a bucket. If the protocol can store what it is programmed to store, it has SoV properties. You just need to define the value.

Bitcoin is already a store of value, but the market will only realize that when the divine market

price is  “””””””stable”””””””. 

-r