On this episode of the Bitcoin Magazine Podcast, host BranBTC sat down with everyone’s favorite Bitcoin maximalist Pierre Rochard to discuss the STABLE Act that was recently introduced to the public by members of the U.S. Congress.
Rochard initially took a broad view on the topic, insisting that looking too closely at the language and intent of the STABLE Act would miss the bigger picture. Instead, he wanted to focus on the conditions of our society that have allowed preconceived notions of money to grant an elite class unfathomable power over the lives of everyday Americans.
These so-called “Cantillionaires” have positioned themselves next to the money printers, and they are working to reign in new technologies that may render those printers obsolete. Such is the crux of how Rochard views this regulatory climate; it’s an attempt to consolidate control in order to allow for new monetary policies that would make past authoritarian regimes look mild.
For more information on the STABLE bill itself, as well as its vast implications and potentially unintended consequences, read through CoinCenter’s article, which breaks down the bill.
While both BranBTC and Rochard agreed that the chances of this bill getting voted into law are slim, they noted that it may just be the first swing at detrimentally regulating bitcoin and other crypto assets. We should stay vigilant to any other such attempts to undermine the new democratizing technology, they concluded.
Famous investor and hedge fund manager Ray Dalio recently tweeted out a thread listing the three biggest sticking points preventing him from jumping on the Bitcoin bull train.
Although mythsaboutBitcoinlikethese have been continuously debunked, clearly there’s more work to be done in dispelling misunderstandings like Dalio’s.
So let’s do that here — for Ray, and for our new wave of HODLers on the horizon.
“Bitcoin Is Not Very Good As A Medium Of Exchange”
Bitcoin both is and isn’t a good medium of exchange based on Dalio’s reasoning. Here’s where he’s right: Not every business in the world currently accepts bitcoin and holds it once they receive transactions from customers.
Here’s where he’s incorrect: There are so many tools that can process bitcoin payments and allow the user to transact with bitcoin, while the merchant doesn’t receive exposure to the risks of it (and may not even realize the purchaser used Bitcoin). A perfect example of a brand new tool that accomplishes this is Strike.
Strike uses technology called the Lightning Network that has only been live for about two years. Lightning Network is the best technology to allow scalable, smaller payments on the Bitcoin network. Before Lightning, it was expensive to transact with bitcoin, as each transaction required block space on-chain, and you had to pay a premium for that block space in the form of transaction fees.
Additionally, payment processors such as BitPay and OpenNode are onboarding more and more merchants who are willing to accept Bitcoin payments. Not to mention the fact that the man at the helm of one of the largest payment processors in the world, Square, is Jack Dorsey, and that it’s hard not to see the enabling of Bitcoin payments as something on their roadmap.
Of course, we’d be remiss if we didn’t also mention PayPal allowing users to purchase bitcoin on its platform recently as well.
Finally, a new currency takes time in order to become a medium of exchange. Bitcoin is only 11 years old. The longer it exists, the more money-like it will become.
The point is, while Dalio is correct that we don’t see a ton of direct purchases using Bitcoin yet (although there are some companies who accept direct payments), the infrastructure is being built, and the ease of use for payments is increasing rapidly. While you may be able to make this point today, it will become less and less valid as Bitcoin matures.
“It’s Not Very Good As A Store-Hold Of Wealth”
I’m the wrong person to be lecturing Dalio on store-of-value use cases, but isn’t an uncorrelated asset like bitcoin exactly what you’d want for a store of value?
If your store-of-value ebbs and flows with the value of everything else in the world, then it hasn’t stored any value at all. It has, at best, stopped you from losing value. Not to mention that, while it may have high volatility (although volatility is decreasing as time goes on), that volatility has historically resulted in price action that is up and to the right. Dollars have only gone down in value, and gold has only gone down in bitcoin-denominated value.
In fact, Bitcoin is the best performing asset in the history of the world. That would make it quite an excellent store of value.
“The Governments Will Outlaw It”
Here’s where I’ll concede another point to Dalio: Executive Order 6102 was real, and it was enacted so that the U.S. government would have more power over the USD. But that only happened because the USD was gold-backed, as he well knows.
Could the government come after Bitcoin and try to ban it? Yes, but that move would be unprecedented and dystopian. Bitcoin is freedom, code and free speech, and any government attempting to outlaw it would be directly attacking the First Amendment, as well as the entire ideal of freedom.
If a government ever attempted to outlaw Bitcoin, it would be the strongest signal in the world that said government has moved beyond its role and legitimacy, and is now only an institution seeking power and control.
If this is what is stopping you from owning Bitcoin, perhaps it reveals your own fears that our government is susceptible to overreach and illegitimate actions. Should your response be to enable that through inaction? Is this a good reason not to invest in bitcoin?
Finally, I’m just a measly Bitcoiner, and I’d be remiss to not highlight Nick Szabo’s response to Dalio as well, as his response is both elegant and pithy:
In sum, it is clear that Mr. Dalio is engaging sincerely with Bitcoin and what it offers the world. He’s asking the right questions. They are, however, questions that can be sufficiently answered, and they do not poke any holes in the value of what bitcoin offers. We will welcome Mr. Dalio as a new Bitcoin HODLer, whenever he chooses to get off zero.
This is a guest post by Brandon Green. Opinions expressed are entirely his own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Of its many potential applications, bitcoin as a medium for rewarding microtasks is one of its most exciting. This implementation takes advantage of the technology’s natively digital qualities, its relative freedom from borders and its high divisibility.
Now, with its public beta phase announced today, the sats-earning platform Carrot wants to realize this potential on a new scale.
Carrot is a platform designed for people to earn bitcoin rewards for supporting the projects and brands they love. Creators can list tasks that their supporters are likely undertaking anyway and offer BTC bounties for their completion, all seamlessly paid via the Lightning Network.
With this beta announcement, Carrot has opened up its waitlist for more creators to join the platform and post tasks. The Carrot team expects all sorts of creators, from podcasters to businesses to open-source projects, and everything in between, to use the platform to begin rewarding their audiences or communities for bringing value to their respective ecosystems.
It’s simultaneously a platform that gives these creators an efficient and effective way of rewarding their supporters directly, while also creating a critical new avenue for getting the world’s best form of money into the hands of more people worldwide.
“We believe that every person has something unique they can offer the world, and that there is an unlimited pool of potential — energy, value creation, social good — that is untapped today,” said Tyler Evans, CTO of Carrot, “Carrot is our small contribution toward creating an equality of opportunity worldwide. Our mission is to spread hyperbitcoinization by letting the next billion people earn their first bitcoin.”
Making The Case For Lightning Micropayments
Various earning platforms have already been established in Bitcoin’s short history. Most famously, Earn.com (formerly 21.com) made a pivot to become an earnings platform before it was acquired by Coinbase for $100 million. But while products like Coinbase Earn offer rewards in various cryptocurrencies, Carrot is one of the first apps to exclusively leverage the Lightning Network.
During the alpha stage of development, an initial batch of pilot partners began experimenting with various types of bounties and rewards that can be issued on the Carrot platform. For instance, Bitcoin Magazine chose to fund five new $500 grants toward contributions to the Bitcoin Core software on the Carrot platform, as decided by the project maintainers.
Carrot’s alpha program saw an initial batch of pilot partners distribute about 70 million sats to nearly 2,500 global users across thousands of Lightning invoices. The average withdrawal amount from the platform has been $2.50, with some users taking out as little as 16 sats, demonstrating the promise of micropayments live in production to a borderless audience. The Carrot team noted that hundreds of its alpha stage users are based in Africa, for instance.
Now that the project is soliciting additional creators and preparing to offer more rewards to more users, it could become one of the most powerful avenues for rewarding value creation around the world.
“Right now, we’re trying to balance both growing our user base with scaling our product and team,” said Evans. “Our hope is that by the end of the year we could be the largest Lightning app in the world and let millions of people earn their first bitcoin.”
DISCLOSURE:Bitcoin Magazine and Carrot are both projects under the BTC Inc parent company. Bitcoin Magazine is a customer of Carrot, most recently when we rewarded new Bitcoin developers who made commits on Core.