Can we end #Bitcoin volatility, please? It needs work, not rocket science. @bitcr_org

https://github.com/spiralxyz/bitcoin-payments/discussions/1#discussioncomment-19471662

Bitcoiners take note: If we want to understand the nature of elastic Media of Exchange, there is still no better insight than John Law‘s:

‚Money is not the value for which goods are exchanged, but the value by which they are exchanged.’ #Bitcoin

Last call for tomorrow's Austrian Economics Salon at the Hayek Institute in Vienna. JoiOrqX20kP7ptCyZ4clgE about the global coffee industry and challenges in international trade.

https://x.com/HubertusVIE/status/2115735333828481125?a=OrqX20kP7ptCyZ4clgE&s=20

1/ Fuel prices are squeezing SME farmers profits and cash. China halted October fuel exports. Russia extended its diesel ban to 31 Oct. Diesel is ~70% above last year.

2/ Middle East war disruptions and war strikes on Russian refineries cut diesel supply. Beijing and Moscow are keeping barrels at home. This means higher surcharges, tighter cash for exposed SMEs.

3/ For SME farmers fuel, fertilizer, and freight bills hit in days while customer payments lag. Higher working-capital needs meet lower profits: cash buffers shrink, payables slip, and credit lines fill or get refused. This can be fatal. SME trade-finance applications are rejected about 40% of the time on collateral, regulations, and compliance cost. Receivables stay blocked, payables are too often due immediately.

4/ #Bitcoin and #Bitcredit answer that gap directly. Bitcredit turns accepted e-bills into non-custodial Bitcoin-denominated credit money, liquidity spendable at once. No bank can hold on the receivable.

5/ Capital stuck in unpaid customer invoices is freed, capital scarcity for lack of supplier terms is solvable. More liquidity means more efficient production, less capital required and higher profitability.

=> Study Bitcoin, explore Bitcredit Protocol.

#Bitcoin Is Becoming a Global Payment Rail. Now It Needs a Credit Layer.

#Bitcoin is quietly acquiring a role much larger than “digital gold”. It is an emerging geopolitical payment rail: a neutral settlement network that can move value across borders without SWIFT, correspondent banks or a sovereign issuer.

Why? Bitcoin operates 24/7, requires no banking relationship and, at the protocol level, no government or intermediary can freeze a payment.

This matters particularly for global trade. The international monetary system is still overwhelmingly built around national currencies and correspondent banking. A coffee exporter in Guatemala, a commodity trader in Switzerland and a buyer in Asia may conduct a commercial transaction, yet the payment connecting them can pass through several banks, currencies and jurisdictions.

Bitcoin offers something fundamentally different: one global base money and settlement network. But settlement is only half of a monetary system. There is a layer missing: Credit.

Commerce cannot operate just on Bitcoin base money. Producers and wholesalers deliver goods today but get paid later. The resulting commercial claims allow the total money supply to expand temporarily with production and contract again when goods are sold.

Historically, one of the most important instruments performing this function was the bill of exchange. That is where the new #Bitcredit Protocol enters the picture, a new commercial-money mechanism on Bitcoin rails which lets trade create the additional money it temporarily needs. Peer-to-peer, without traditional banks.

Bitcoin is the reserve and final-settlement money. Bitcoin eBills are direct commercial credit. Bitcoin eCash is the transactional money created against that credit. The new layer could finally turn Bitcoin from something the world merely holds on to into something the world runs on.

“And thus I think and believe credit and the law of bills and commerce, to be the foundation stone upon which our agricultural and commercial advancement, in short our future rise and prosperity, can be built.”

— István Szechenyi, Hungarian Statesman (1830)

If it’s not stable, it’s not money. #Bitcoin Suck it up, or get to work.

"#Gold has been a store-of-value for thousands of years" is a mantra repeated ad nauseam by which influencers seek to convince their audience of a similar eternal value for #Bitcoin.

The gullible listener soaks up such great wisdom with an open mouth, and joins the chorus of the many who sing along.

The fallacious belief in such miraculous eternal value of one particular good, gold, is all the more astounding as most plebs know about the many, many other goods which have lost this prized store-of-value function in the past.

In fact, any and all former monetary goods fell back to their plain use value once they demonised: Silver has the same thousand years of history as gold, but is well on its path to demonetisation nirvana, trading at under a quarter of its former SoV value, falling.

Copper, Bronze, Electrum, Cowries, Wampum, Salt, Cattle, Sheep, Goats, Grain, Cocoa beans,... SoV gone. Utility value remains.

The failure list is endless. Only gold is still a strong fungible SoV good, stored away by central banks and hoarders who grok the fragility of the fiat experiment.

So, dear Bitcoin influencers, tell us the reason: Why is it that only one good, gold, retains this exalted function in our fiat times? Why should there now be a second good, retaining it too, and for generations?

The one reason which really decides this game they will never tell you while pushing their fable of infinite SoV-NGU riches.

PS: I do actually give it a good chance that Bitcoin is "it", but not for the harebrained reason that gold survived. Follow my substack "Bitcoin for the Real Economy" to learn how we can still get Bitcoin to monetise and end the fiat disaster.

Fiat monetary aggregates are pure chaos. Move a bank demand deposit into a term deposit and M1 falls suddenly, even though no money has been repaid or destroyed. But the fiat bank has merely renamed one of its liabilities!

With Bitcoin and Bitcredit, sound money, banks can neither create base money M0 nor add credit money M1. A term deposit requires an actual transfer of Bitcoin, which continues to exist and is simply held by the honest bank. ==> So, M2 rises while M1 stays unaffected and true.

Perfect money.

I agree with Verda Ventures’ thesis in their latest newsletter: "Non-dollar stablecoins do not need to displace the dollar. They need to solve a specific problem inside a specific market better than a dollar token can."

Most importantly, this idea applies not only to stables but also to #bitcoin.

Why? Because stables, while less volatile, inherit all the institutional problems and political attack points of fiat currencies.

Even today, #bitcoin has important capabilities which stablecoins don't:

• Bitcoin is nobody's liability, there is no issuer
• It has absolute finality where stables can be seized
• Jurisdictional neutrality in geopolitical uncertainty

And this is just today!

If and when Bitcredit Protocol starts taking root, it will naturally stabilise Bitcoin's purchasing power. Once stable, #Bitcoin will beat every stablecoin in the world, including the dollar. (NB: Unless the U.S. switches to a Bitcoin-redeemable dollar.)

The endgame will be one neutral asset and one censorship-resistant settlement network worldwide.

The "Global Trade Finance Gap" is officially estimated at $2.5 trillion, but unmet financing needs of exporters and importers are hard to measure.

Gap studies typically use rejected applications, but roughly half of all rejections may concern non-creditworthy applicants.

The unmet demand however may not be the demand in rejection data but the demand that never materialises at all.

“If you’ve been rejected once, you may not come back to the banks anymore,” says Marc Auboin, Head of Trade Finance Research at the World Trade Organization.

In this scene a new option is rising: #Bitcredit Protocol facilitates direct trade finance between exporters and importers on decentralised #Bitcoin rails.

For the global production sector the new method promises relief against the increasingly dysfunction of traditional banking caused by geopolitical tensions, political interventionism and fiat system centralisation.

Too few indeed. Bitcoin must become medium of exchange. Commercial credit, for real goods in the supply chains, is the way.

A bitcoin company in the supply chain!

Shocked to learn that Economist Thomas Greco has passed away a few weeks ago. I must have corresponded with him by email just days before.

Tom had a unique practical experience with community currencies and firmly supported free choice in currency. I always enjoyed my debates with him, recently here on the question of an ideal base money.

https://blog.bitcr.org/p/chapter-2-a-world-without-money/comment/103056739

Yesterday's Austrian Economics Salon fled Vienna's Hayek Institute in favour of a pleasant open air evening.

Stephen DeMeulenaere, accompanied by Scott Morris, shared their lifelong practical experiences with regional and alternative currencies, reasons for success and reasons for ultimate decline.

This holds some valuable lessons for the big job of overcoming today's disastrous nationalised fiat currencies and hopefully, the return to a sound monetary system and free choice in currency.

PS: #Bitcoin is our best chance as the economically illiterate political caste has no chance to mess up a Bitcoin Standard like they did with the Gold Standard.

Why #Bitcoin will be indispensable?

Because banks have been informally politically captured, not expressly and intentionally, but as a clear side effect of the recent trend to authoritarian money and banking law.

In most countries, banks now "debank" customers on a whim, meaning they simply close accounts without due process or even giving a reason for the affected customer to respond to. This works on an enormous false positive ratio. For businesses, most of which are legitimate, this is extremely disruptive in digital age.

In South Africa, the central bank enjoys even more power, they can seize anybody's fiat money from any bank under their power. This is a sign of things to come everywhere with digital central bank money, #CBDC.

#Bitcoin is mankind's only hope against tyranny and the misery, war, and poverty which comes with it.

https://newsday.co.za/business/18817/well-known-south-african-loses-r4-2-million-after-2-emails-and-one-government-gazette/

So, you want to understand how Bitcoin can become a true money, a medium of exchange? And what's next?

Bitcredit Protocol has three talks at @BTCPrague this week, the first is on the Main Stage at 17:20 on Thursday. See you there!

It's not even about "when".

At

, I will talk about where the fiat experiment is ALREADY failing, and how bitcoiners can profitably fill the gap.

Holding a workshop at MAD Bitcoin Summit tomorrow.

Join me for a very different understanding #Bitcoin.

Includes a short Deep Dive into real #AustrianEconomics.

Madrid 🇪🇸 is quite odd, when it comes to #Bitcoin.

When one asks in Austria: “Can I pay in Bitcoin?” one gets just a simple “No.” a blank glance.

In Madrid it’s: “Noo” giggle Had this four time yesterday.

I think this can change, but we must get some global supply chains on #Bitcoin. Real economy.

Visit www.bitcr.org and you find will a very different Bitcoin world:

Bitcoin is infrastructure, not asset speculation:

Today most hear “Bitcoin” and think:

• volatility,
• treasuries,
• speculation,
• collateral lending,
• mining,
• ETFs.

Instead, in Bitcredit thinking, Bitcoin is the neutral settlement layer and finality anchor for international trade. The credit is created by real supply chains moving goods, not by abusing Bitcoin abusing as collateral and hoping for appreciation.

Bitcoin will appreciate BECAUSE and WHEN used in international trade.

It will be the world's geopolitically neutral money.

Here is an interesting project to review, now that

moves supply chains onto Bitcoin rails.

https://github.com/cbonoz/consensus-grow-18

I will be there, too!

Doing a workshop on Bitcoin-native Trade Credit.

Buckminster Fuller is unsound economics, his energy theory has a similar mistake as Marx’s labour theory of value.

Labour input does not determine value. You can dig a pit for hours, and it may not have value. Spend more work on closing it again. Less value if there ever was.

Energy input does not determine value. You can spend 1 or 100 kWh in electricity on a room where nobody lives, and there is no value.

Fuller conflated cause and effect.

If people economise on energy because it comes with a price then a richer economy will likely use more of it. Not the other way round. It’s not a driver but an indicator to be used with caution.

On the Misconceptions of Deflation in Bitcoin

Bitcoin is NOT ‘deflationary’, my Bitcoiner brothers.

That’s utterly, totally wrong.

Let’s get our economics straight.

Deflation is when the money supply does not keep up with the money demand. That’s the definition. No more, no less.

1. There is constantly supply added to the stock of Bitcoin. That’s not deflation, clearly. .

2. Prices falling because of technical progress? That’s not deflation, that’s productivity growth.

3. Exchange rate of Bitcoin rising? Not deflation. It’s the fiat currency’s inflation due to oversupply.

4. Obviously the exchange rate of Bitcoin can be falling at times. Clearly not deflation anyway but neither inflation.

Deflation is an undersupply of the economy with money. It’s the supply chains grinding to a hold because something or someone strangulates the money supply. Goods don’t move, lose value, spoil.

Deflation can have all kinds of price effects at different stages from when the disequilibrium started. It is however, always a most destructive force in the real economy causing unemployment and poverty.

Don’t desire to live to see it at work.

Bank’s demand deposits, gold custodied for convenience, enabled re-hypothecation. I think it was foolishness, laziness, the first step to the fraud which brought us the corrupt fiat money.

In our geopolitically tumultuous times, even governments now see the wisdom in using Bitcoin instead of some hostile fiat money.

Note that Bitcoin is already showing its mettle as the ideal money for international trade.

The newsletter of @BTCprague reports:

“Iran would impose a $1-per-barrel transit toll on oil tankers passing through the Strait of Hormuz, only payable in Bitcoin. so funds can't be confiscated."

Prove Mises wrong.

Trade runs on credit.

The superstition against all forms of credit in #Bitcoin stems from the almost complete absence of businessmen in Bitcoin. Far too few of us know about the production and supply chains of real goods.

Yet, it will be always held against Bitcoin if, unlike fiat, it cannot do its work in the real economy: money for the redemption of current trade credit, also called "currency."

Bitcredit Protocol now adds the currency layer which will make Bitcoin usable in world trade:

• geopolitically neutral
• unbureaucratic and fast
• efficient and cheap

I wonder if (m)any Bitcoin maxis really understand Bitcoin?

Or are they just chasing the dream, without knowing what it takes to bring the dream about. That’s naive.

Or do they only plot on NGU, when more and more capital flows in. That’s greed.

How many know the real workings of a monetary system?

Consider the “Folly of the World”.

It doesn't surprise me that the politicking for the foundation of the Bank of England in 1694, was to be kept from the public eye.

To my knowledge, this pamphlet from 1665 A.D. is the first proposal ever for currency out of the thin air of budget deficits. Then they waited for a war ...

306 years later, Nixon finally ended the international gold standard. Gold specie disappears.

Join me on 27 March for our next Austrian Economics Salon CVI at the Hayek Institute in Vienna.

Topic: Does AI mean the end of work? RSVP

https://www.meetup.com/austrian-economics-vienna/events/313811771/

What a letdown!

In “Confessions of an Economic Hit Man”, John Perkins @JPerkinsAuthor initially recognises the huge geopolitical problems caused by fiat currency printing correctly.

He also describes how some crony corporations have grown to abuse the fiat system.

Unfortunately, his analysis is misled by his anti-corporatism ideology. He fails to see the root cause, thinks it’s “the dollar”. Not so: Cronyism is a consequence of bad political system, a symptom of its construction mistakes.

Then he presents his solution: the next fiat currency. 🤦‍♂️

“In fact, today the existence of such a currency is no longer hypothetical; the euro entered the international financial scene on January 1, 2002 and is growing in prestige and power with every passing month.”

Anti-climax!

A currency must be honest and then will not trigger Perkins’s “corporatocracy”. But it must be sound, redeemable in a hard commodity, untouchable by politicians.

The Euro is worse than the dollar ever was. The EU is a troubled, failed political system, visible after its short existence. It kills honest businesses and creates poverty, regulation by regulation.

Gold failed. Bitcoin could restore honest currency and honest debt redemption. Politicians have no power over Bitcoin, not even its internal politician types.

Only when Bitcoin touches fiat politicians can abuse their legal power, which is not possible in a circular Bitcoin System.

That’s the one I am trying for.

The dollar and any currency can be honest, will return to honesty, once it is redeemable in Bitcoin. And now we can even have a native Bitcoin currency, no politicians at all.

Most think than an elastic currency for Bitcoin necessarily means having a Central Bank.

That’s like thinking that an economy on Bitcoin must needs a Soviet Gosplan.

No such need. Just free markets.

How do you recognise a self-centred politician?

Do-or-die, he insists on the fiat system which helps not the people but only his caste.

Do not elect them anymore!

Economic Law is sometimes slow but it always works.

Politicians’s Law cannot override it.

That’s why I am 💯 percent sure that the fiat money laws will ultimately be repealed or sidestepped by #Bitcoin.

Fiat money will go down just like socialism did: because it brings poverty and misery.

Legal tender: Repeal! Central bank monopoly: Repeal! Payment censorship: Repeal!

Money is fixed. Currency is elastic. It takes 2 to tango.

Get it?

#Bitcoin is a speculative asset. Currently.

It will be a stable money. Soon.

All that's missing is its currency layer. #Bitcredit Protocol is building it.

Open source, permissionless. Join the @bitcr_org community to make it happen.

The project is looking for Bitcoiners in the real economy, Producers, Importers/Exporters, Traders, For simulating supply chains on Testnet. Reward.

It may sound strange for #Bitcoin Hodlers but hoarding of money is a certain loss. If we do because we expect to it to rise, it is not a money, but bought for money.

Ancient wisdom:

"How very a little time Money stays in a place; and altho' every one desires to have it, yet none, or very few care for keeping it, but they are forthwith contriving to dispose it; knowing that from all the Money that lies dead, no benefit is to be expected, but it is a certain loss."

Technical scaling is not the problem in #Bitcoin. The tech for scale exists and the market values it less and less.

I think the real challenges are:

• Monetary scaling
• Non-custodial
• Censorship resistance
• Better privacy

These are the criteria for building Bitcredit Protocol.

Really? Nobody? Nobody?

Pretty Good Privacy “PGP” is taken.

Considering “Reasonably Good Privacy“ for Bitcredit‘s non-custodial e-cash layer on Bitcoin. “RGP”?

Building a decentralised open peer-to-peer system (i.e. Bitcredit Protocol) in a complex field like a monetary economics is quite exhausting.

Even with a stellar team.

But centralised would be totally futile. It would soon be turned into just another fiat money.

So we slog on towards Beta.

Is Bitcoin a money or a currency?

If you answer correctly I will follow you.

Banking today is not “banking” anymore.

It’s statism gone wrong.

Only a small part of credit goes to economic production.

The major part goes to funding government overconsumption, including lots of waste, fraud, and corruption.

Another large part goes to inflationary speculation, pumping asset prices, increasing social inequality, preventing people to live their dream through honest work.

Most of the daily work of bankers is now in regulatory compliance and serving state mass surveillance instead of serving commerce and savers.

Ever growing, complex regulations desperately try to prop up the fragile fiat system, politicians’ house of cards which could topple down any moment. It will collapse anyway, whatever they do.

Ever growing intrusive Big Brother methods to spy on citizens and businesses so they can squeeze out the last dollar for the greedy political caste.

This foul system must end. Fiat must end.

Bitcoin can fix this.

I predict a strong surge in Freedom technology projects in Europe 🇪🇺 from here on.

It is “innovation of last resort”, the only thing innovators can still do on a doomed continent. Everything else will be blocked by rampant regulation.

The EU is being destroyed by a badly designed new political system which usually only lifts third rate politicians to power.