Bitcoin Times № 5: Austrian Edition
DO NOT GIVE IN TO EVIL …
The time of Bitcoin is indeed here. And it will long outlast us early adopters during this initial 120 year start up phase when new bitcoin is still possible to create. And in the year 2140, or so, long after we’ve died, those that follow in the path we’ve carved, and charge on ever further into the glorious future, will continue to spread the light and the way of Bitcoin to all corners of the globe, to all corners of the galaxy, until the fiat darkness is no more.
Along the way, the fiat henchmen will kill some of us off, lock us in prisons, or steal our belongings. Sadly for those, poor, wretched, statist goblins that enforce these short sighted losing actions of the state, there lives are an eternal deep hell where they know no joy, and no hope. I have pity for those lost empty husks of men that carry out their masters biddings, and I have great admiration for those shinning examples of men that did what needed to be done in spite of the fiat short term consequences.
We all die. What matters is how we live. Be part of the team that wins short term destructive battles, or be part of the team that wins the long term constructive peaceful revolution.
Ideas are forever, and nothing is more powerful than an idea whose time has come. Eventually the statists will run out of lies, their shrouded veils will no longer hide their ignorant actions, and their debased currencies no longer accepted by their soldiers, policemen, administrators, energy providers, and food producers.
The hard earned gold that they stole from our great grandfathers in the world wars they thought they had won in the 20th centuries in the Americas, Europe, Russia, and Asia, is now being cast, block by block, into unconfistable permanent information that they no longer have an ability to steal. Thou shalt steal thy money, no more.
Their increased efforts to take from those that make, only further awaken more and more of the masses from the siren songs of their death and destruction Malthusian idiocracy.
The idea of Bitcoin has crystalized into a critical mass of the hearts and minds of good and honest men in all parts of the globe, from all cultures and creeds, and with that idea as our impenetrable shield, and universal law our uncensorable sword, victory is already ours.
… PROCEED EVER MORE BOLDY AGAINST IT
There is so much signal packed into the 5th installment of The Bitcoin Times, Austrian Edition, that we are compelled to unapologetically spread the signal to all of you glorious, uncompromising, critical thinking bitcoiners.
We’ve taken the liberty to forego permissions to republish a few of our favorite takes from this edition, because we are not statist gatekeeping dinosaurs, like the fiat lizards. Ideas are meant to be spread, so unless you don’t want you’re ideas spread across the planet, don’t publish them. By all means, copy all of this down and spread it far and wide. Or better yet, get yourself a a collectible hard copy of The Bitcoin Times. There will only ever be 2100 of each beautiful hard copy edition.
https://bitcointimes.io/product-category/editions/
EDITOR’S NOTES
Welcome to the fifth edition of The Bitcoin Times. This is the fourth year of the publication, and the first time I’ve decided to take it seriously and pursue it as a commercial endeavor, instead of just a side project or hobby.
The result is the introduction of the long-awaited physical collectible, alongside a series of other mediums through which the content we produce will be made available…
I have also made the final decision to do 21 editions over 21 years. That means one per year, over what may be the most formative decades of Bitcoin’s early life. Quality over quantity.
I am committed to making The Bitcoin Times the premier publication for timeless, evergreen Bitcoin content that is pure signal, original and written by the very best of the best.
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In this edition, you will learn about Bitcoin from first economic principles.
Bitcoin is fundamentally an Economic beast, and I say that with the greatest depth of concept in mind. When I think about economics I think about the use of time, energy and scarce resources toward ends. I think about behavior, action and relationships between actors. I think about incentives and disincentives. What more base study exists, at least in relation to living things?
One can find ‘economics’ in more than just human society. The parallels of energy usage, prioritization (use of time), incentives and disincentives exist in all living systems. We as humans have the ability to develop a study from it and the most profound, accurate and important mode of this study is the Austrian School of Economics.
Bitcoin may well be its crowning achievement.
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Aleksandar Svetski
The Bitcoin Times
December 5th, 2021
What the mind of men can conceive, the will of men can achieve. You have an opportunity in this life to build and leave your fingerprint on this Earth, for others to add to, and build upon still further. What we do in this life echoes into eternity. Stand tall and firm, bring the world forward into goodness and prosperity, with your righteous human action.
TO THE SOCIALISTS OF ALL PARTIES
An Introduction to The Bitcoin Times: Austrian Edition by Parker A. Lewis
While better read and more learned disciples of the Austrian school might discount Hayek, believing him to have compromised on certain important principles, he was a disciple of Ludwig Von Mises and there was truth in his works that helped me understand how the world worked in a way that I did not gather from my time studying economics in college. The Road to Serfdom, which Hayek dedicated to ‘the Socialists in all Parties,’ made the best fundamental case of which I have ever read as to why collectivism fails and ultimately leads to economic ruin.
It also explained in a rigorous and logically-ordered way why socialism inevitably leads to authoritarianism and tyranny, and similarly ends in economic and humanitarian ruin. Many ideas clicked for me but particularly the ones centering on the function of money and the consequences of socialism and collectivism to the pricing mechanism which coordinates economic activity. The Road to Serfdom made clear just how important the pricing mechanism is to an economy as well as why it breaks down as the control of resources centralizes.
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In my view, bitcoin’s zero to one innovation is finite scarcity because it represents the foundation of the world’s new monetary system and consequently its emergent pricing mechanism. Simply put, bitcoin is a form of money that cannot be printed and that is not just sufficient to create the possibility of global adoption, it will functionally cause it.
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Humans need money to survive just as they need water to survive; it is actually money that coordinates trade to deliver water to billions of people. The underlying principle is that humans benefit from cooperation via trade and that the benefits from trade are not zero-sum. The benefits from trade are positive-sum, but in order to scale trade, specialization and the division of labor, money as an economic good is a necessity. In order for any two people to effect trade with money, both would have to have first formed a consensus as to the form of money with which to use. In short, I would need to have the form of money you were willing to accept in order for us to trade. It is an intersubjective problem for that reason and the evaluation is both objective and relative to all other possible forms of money. It is also not a coincidence, belief system or collective hallucination as to how we (you and I) arrive at the consensus. There might be many inputs to the evaluation but inevitably, everyone arrives at the objective conclusion that the best form of money would be one that is hard to produce, with the hardest to produce being the one that cannot be produced at all (let alone printed).
And, if you evaluate the dilemma between any two trading partners and then extend it to the third trading partner, the fourth or the fifth, you will realize that the problem is identical and extends to all eight billion people in the world. Everyone has the same problem and everyone has an incentive to hold the best form of money. By holding (or trading for) the best form of money, it will result in the widest range of trading partners and ultimately the greatest range of choice and the greatest positive sum benefit to each individual who holds the currency.
Now, if any individual evaluates these two principles and comes to the conclusion that there is an optimal state, that it is the form of money that cannot be printed and that money converges to one, it is highly likely that individual will begin to seek out the best form of money because it will be the one that the most people will accept in the future. Because the evaluation is objective, the logical and inevitable conclusion is bitcoin for the principal reason that, in a terminal state, it cannot be produced by anyone or at all. As each individual goes through this process, consciously or subconsciously, an emergent consensus will continue to form. As a critical mass is established, only then can a price system emerge. Price is an output of the adoption of a pricing mechanism, which is the money objectively evaluated in the market. Arrive at the conclusion that a price system emerges as a function of the use of one single and common form of money, contemplate its consequence and accept that it does not occur by coincidence and you too will be at the doorstep of bitcoin adoption.
On my own journey, I ultimately came to the conclusion that centralized manipulation of the pricing mechanism causes far ranging, negative and impossible-to-quantify or predict consequences. Impossible by definition as the complexity of the price system extends far beyond the conscious control of any individual or group of individuals. It is the folly of Keynesian and Monetarist economics. High degrees of centralization, both of the money system and through the expansion of government budgets, ultimately destroys the pricing mechanism entirely, especially when trillions upon trillions of dollars are created out of thin air.
Printing money impairs the pricing mechanism by distorting every price in the world and not equally; expanding government budgets consolidate the pricing function into fewer and fewer hands and away from those with actual skills and knowledge in the real economy to deliver goods and services. Over time, imbalances grow through this process, and the price mechanism degrades until it becomes so impaired that it is no longer functional in coordinating trade and economic activity, which is what causes hyperinflation. This does not mean all function of government is necessarily bad. But, it does mean in an absolute sense that the manipulation of the money supply, which itself creates the opportunity for the unrestrained expansion and centralization of government, is in each and every sense extreme in its negative consequence, and bitcoin eliminates that ability completely.
After arriving at these conclusions, I came across a book called Keynes | Hayek, The Clash That Defined Modern Economics. By this point, I had read both Hayek and Keynes but I did not realize the two were contemporaries who actively corresponded, challenging each other’s ideas in real time. I had read them each on the merits of ideas and not in the historical context that there was an active and ongoing debate in the early to mid-twentieth century.
The Keynesian view won out, not in the end but at least for the time and I also understood why the two worldviews could not co-exist. Each functionally argued that the otherwas foundationally errant. This is how I have come to explain why mainstream economic circles, including the whole of western universities as well as modern central banks, have necessarily become a monoculture. Either you believe there is net benefit to manipulating (or actively managing) the money supply and derivatively using unfunded government spending to influence economic outcomes (and to distort the economic pricing mechanism) or you do not. While the debate between Keynes and Hayek was just that, a debate, and while the theoretical or actual debates between any of the authors in this Austrian edition of the Bitcoin Times and the likes of Janet Yellen, Paul Krugman or Stephanie Kelton would be the same, the beauty of bitcoin is that it is not a debate. Instead, it is a market test.
There are two economic systems competing with each other. The one of the old world, of dollars, euros and yen built on the foundation of the Keynesian view. And, the one of the new world, built on bitcoin and one inherently of the Austrian view. No longer do we have to resort to intellectual debate of who is right or wrong. For the first time, there is a market scorecard and everyone has a choice. Each economic actor has the choice to either voluntarily opt in to bitcoin or remain with the old guard. Over time, the view most correct and founded in first principles, will win. Each person that evaluates the questions as to what money is and whether bitcoin is money or not, is participating in this market test. As more people evaluate these questions and adopt bitcoin as a monetary standard, the true test of history will be had.
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Parker A. Lewis, The Future Mayor of Austin
Austin, Texas
November, 2022
There could not be a more logically compelling explanation as to why Bitcoin wins, why there is indeed, no second best. Incredible.
BITCOIN: MAKING TIME PREFERENCE LOW AGAIN
The Hardness of Money as a control knob for Time Preference
By Saifedean Ammous
The hardness of money is the control knob for time preference. Austrian economics arrives at this by reasoning from first principles. Bitcoin illustrates it by fixing you and everyone it touches.
A primer on Time Preference
The scarcity of time is the starting point of all economic choice. The scarcity of time forces man to choose between alternatives at all points in his life, and it means that every decision has an opportunity cost. Even with no restraint on the amount of resources available, an individual’s choice of how to spend their time results in the elimination of all other choices for which he could have used the time.Economizing time is unique because time passes and cannot be stopped or reversed. When he is born, man’s life’s clock begins ticking, it continues ticking relentlessly, and only stops when he dies. There is no knowing when that clock will stop, and there is no restarting it after it stops. Man gets one uninterrupted shot at life, and he never knows when it will end.
Time is not a normal commodity for which man can choose the quantity he would like to have. There is no market choice between different quantities of time. Different periods of time “appear in different perspective according to whether they are nearer to or more remote from the instant of valuation and decision.” The nearer the period of time from the present, the more valuable it will appear to an individual. The present is certain, as it is already here, but the future is always uncertain as it may never come. The future can only come through successfully securing survival in the present, which makes the needs of the present always more pressing and important. The present is where all senses experience life and its pleasures and pains. Future pains and pleasures are hypothetical, but those of the present are real and visceral. Hunger felt in the present is far more pressing than hunger anticipated in the future, which makes food more valuable in the present than the future. Danger in the present is far more pressing than future danger, and tools that secure safety today are thus more valuable today than in the future. Given a choice between obtaining a physical good in the present, or the same good in the future, man chooses the present.
The higher valuation of present goods is a permanent fixture of human action. It is confirmed by the fact that humans choose to consume rather than just accumulate more of the goods they value, including money. Their choice to consume in the present implies they place a higher valuation on a present good than the same good in the future. Time preference is the degree of preference of present goods over future goods. It is always positive, because humans always prefer present goods over their future equivalents, but the magnitude of this differential varies from person to person, and for each person across their life. A high time preference indicates heavy discounting of the future in favor of the present and more present-orientation, while a low time preference implies a lower discounting of the future and more future-orientation.
An endless variety of factors can affect an individual’s time preference.
Time Preference and Bitcoin
The emergence of bitcoin represents a fascinating opportunity to understand the role of money on time preference, as well as to reverse the global trend of rising time preference presented by fiat. Bitcoin is a peer-to-peer software for operating a payment network with its own native currency. The two most important features of bitcoin are that its native currency has a strictly fixed supply that is completely irresponsive to demand, making it the hardest money ever invented; and that it allows for cross-border payments without needing any political authority to supervise the transaction.These two properties arguably give bitcoin the best salability across time and space. Its scarcity means that its supply cannot be diluted unexpectedly, ensuring it is likely to hold on to its value into the future. And its automated processing of payments means it can travel worldwide without having any single authority able to censor or confiscate it.
Bitcoin has no single point of failure, no single piece of critical infrastructure or hardware, no single critical individual or organization. Bitcoin is a software protocol open to anyone anywhere who has a device that can receive a small packet of data every ten minutes (between 1–4MB), and there are tens of billions of these devices worldwide. All bitcoin does is that approximately every ten minutes, it produces a new record of ownership reflecting around 3000 transactions’ reallocation of existing coins. This has never failed and has never produced a fraudulent transaction.
Bitcoin is a purely voluntary monetary phenomenon that does not require regulation, enforcement, or a judicial system to function. It fits into the Austrian definition of sound money because it is chosen on the market, its value cannot be dictated by any authority, its price is emergent and of all the moneys chosen on the market or imposed by government, bitcoin is the only one whose supply is fixed and cannot expand in response to increasing demand.
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Bitcoin is the free market’s solution to the problem of rising time preference. It is the technological solution that allows anyone to rejoin the process of lowering time preference, saving, capital accumulation, and civilization. It requires no political permission, it obviates politics and monetary policy, it is unstoppable, and it is hugely rewarding for everyone who adopts it.
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Saifedean Ammous
August, 2022
DO GOOD, THERE IS NO ALTERNATIVE.
These brief excerpts from The Bitcoin Times, Austrian Edition, summarize thousands of years of human action and thought and progress; where we came from where we are now, and where we are going. Through rational individual human action, in time, the entire planet will find themselves living and thriving on The Bitcoin Standard, and we are all here to witness its humble beginnings. What a time to be alive! LFG!!!
Now go buy a hard copy of The Bitcoin Times and level up your home library, legend.
https://bitcointimes.io/product-category/editions/