This seems to have a very US/Western focus on fiat currency. For people in these regions of the world, fiat works well as a medium of exchange due to the ease of access to bank accounts. However, in other parts of the world, where people are unable to access USD or are entirely bankless, Bitcoin and Lightning are better than traditional fiat payment rails due to their lack of barriers to on-boarding.
Alex Gladstein of the Human Rights Foundation has talked extensively about how activists working in authoritarian regimes prefer donations in bitcoin compared to fiat as it cannot be stopped by governments and provides more privacy, especially when using lightning.
Overall, I really liked your point on how bitcoin acts as both money and currency, but I think you are painting an incomplete picture of the current fiat payment system by not talking about the drawbacks it has as a medium of exchange.
That is correct. I agree with you. It is a Western view and in other articles/podcasts I’ve just lightly hit on what you mention. If you are in a developed nation, there are 5-10 easier or faster ways to pay (connected to the banking system). Venmo, Zelle, credit, Cash App, etc, but in less developed countries it is as you mention. Bitcoin is better in those places for many reasons. No banking access, avoiding the traps of dollar debt without dollar access, and SWIFT permissions or weaponization.
I also agree that Bitcoin is a poor medium of exchange (currency). It’s better than land and gold but worse that fiat; strictly from a currency perspective-speed/ease. I believe currency (MoE) is the least needed thing in society at the moment and all currencies eventually go to zero.
Gold is the only one to last throughout time. Currencies eventually fall victim to greed and manipulation. MoE is more about facilitating transactions than acting as money. We have more than enough ways to transact. It’s not broken. It could be updated tech wise (crypto) but the real problem is storing value or broken savings mechanisms. Unfortunately, most people view money the other way around and perceive the value to be in the exchange component.
Thanks for the reply and detailed response! I'm unable to like your comment directly on substack, but would if I could.
in regards to gold, have you read Lyn Alden's book Broken Money? In it, it talks about how gold was replaced by fiat currency due to gold's inherit "physicalness" preventing from moving at the same speed as digital payments, including both Bitcoin and fiat, and references how the slow speed of transaction/settlement is why it was eventually replaced by fiat currencies.
I've been a free subscriber for a for several months now, but this article and your response has inspired me to become a paid subscriber. I look forward to reading your future articles.
Thank you! I have not read her book but wrote an article for Bitcoin Magazine in early 2023 explaining why money changes when it no longer moves at the speed that society does - https://bitcoinmagazine.com/business/bitcoin-global-money-for-world. That's when new money gets created to take advantage of technologies that allow it to move at the speed of people and businesses for those times.
Yes, that is exactly why we stopped using gold, checks, and now credit cards, etc. The friction is too high.
Perfectly stated, Kane, as your analysis is based on the functional reality at the moment. Of course things will change over time, but USD and existing payment systems aren't going away for awhile. Well written!
This seems to have a very US/Western focus on fiat currency. For people in these regions of the world, fiat works well as a medium of exchange due to the ease of access to bank accounts. However, in other parts of the world, where people are unable to access USD or are entirely bankless, Bitcoin and Lightning are better than traditional fiat payment rails due to their lack of barriers to on-boarding.
Alex Gladstein of the Human Rights Foundation has talked extensively about how activists working in authoritarian regimes prefer donations in bitcoin compared to fiat as it cannot be stopped by governments and provides more privacy, especially when using lightning.
https://bitcoinmagazine.com/culture/currency-of-last-resort
Overall, I really liked your point on how bitcoin acts as both money and currency, but I think you are painting an incomplete picture of the current fiat payment system by not talking about the drawbacks it has as a medium of exchange.
That is correct. I agree with you. It is a Western view and in other articles/podcasts I’ve just lightly hit on what you mention. If you are in a developed nation, there are 5-10 easier or faster ways to pay (connected to the banking system). Venmo, Zelle, credit, Cash App, etc, but in less developed countries it is as you mention. Bitcoin is better in those places for many reasons. No banking access, avoiding the traps of dollar debt without dollar access, and SWIFT permissions or weaponization.
I also agree that Bitcoin is a poor medium of exchange (currency). It’s better than land and gold but worse that fiat; strictly from a currency perspective-speed/ease. I believe currency (MoE) is the least needed thing in society at the moment and all currencies eventually go to zero.
Gold is the only one to last throughout time. Currencies eventually fall victim to greed and manipulation. MoE is more about facilitating transactions than acting as money. We have more than enough ways to transact. It’s not broken. It could be updated tech wise (crypto) but the real problem is storing value or broken savings mechanisms. Unfortunately, most people view money the other way around and perceive the value to be in the exchange component.
Thanks for the reply and detailed response! I'm unable to like your comment directly on substack, but would if I could.
in regards to gold, have you read Lyn Alden's book Broken Money? In it, it talks about how gold was replaced by fiat currency due to gold's inherit "physicalness" preventing from moving at the same speed as digital payments, including both Bitcoin and fiat, and references how the slow speed of transaction/settlement is why it was eventually replaced by fiat currencies.
I've been a free subscriber for a for several months now, but this article and your response has inspired me to become a paid subscriber. I look forward to reading your future articles.
Thank you! I have not read her book but wrote an article for Bitcoin Magazine in early 2023 explaining why money changes when it no longer moves at the speed that society does - https://bitcoinmagazine.com/business/bitcoin-global-money-for-world. That's when new money gets created to take advantage of technologies that allow it to move at the speed of people and businesses for those times.
Yes, that is exactly why we stopped using gold, checks, and now credit cards, etc. The friction is too high.
Perfectly stated, Kane, as your analysis is based on the functional reality at the moment. Of course things will change over time, but USD and existing payment systems aren't going away for awhile. Well written!
Allen - thanks for your comment and I agree as well. Transitions take a long time.