Back in the day, not so long ago a 15 year old boy makes a table and sells it to his neighbor. He makes $1000 profit. He saves the money because he wants to be a good Christian saver has no real need for material things he doesn't already have and knows that he can get a good interest rate in a safe place. Savings frugality and hard work is admired and respected and some how this intrinsically makes sense when he looks around. 50 years later he still has that money he saved and with 12% interest its now worth 400k which in this time is, just in itself, an ok amount of money to retire on when he is 65.
In another world, a lot like the one we are in now, the same boy knows intuitively that there is little point in saving. 2% percent inflation (which is the lower bar) means that in 50 years that money will have almost completely evaporated in 50 years. So he takes the money and blows it on spray paint, booze, drugs and maybe gets a girlfriend. He really just wants to enjoy himself in the moment, retirement is irrelevant savings is silly, you've got to spend money to make money and you've got to know some secretes and make some connections before its worthwhile working at it. People seem to spend money they don't have fast and on flashy stuff that breaks or goes out of fashion. Leverage and regulatory capture are the name of the game. This is the Fiat world,
The stark contrast between these two world is clear, and you can see the vast cultural effects of sound money. It touches so many parts of society and it also explains a lot of differences from the current world and the world of 100-300 years ago.
Very interesting but, guess what? neither of these worlds are real anymore! In the real world the effect is exaggerated for people who know about bitcoin. The 15 year old boy named Jeabus who knows about bitcoin makes a table and saves the $1000 as bitcoin. He goes straight to Bisq and writes his seed phrase on a piece of paper and in his mothers old diary and deletes the Samurai wallet from his phone. The process is easier than waiting in line to deposit it at the bank and he also knows the bank is only holding a small fraction of its deposits in reserve. The compound interest calculators online max out at 50% annual return which he knows is a low pall for his bitcoin stash. In 50 years time, his stashed bitcoin with nothing else, will be theoretically worth the equivalent to 70Trillion dollars!
$70,783,540,654,359
He's happy to save the money, keep working hard and can dream of grand glorious plans for a bright future. He is 70 trillion times belter of than a rebel without a cause. Sound money make Jeabus boys rich.
(I think the price power parity appreciation rate of bitcoin is actually higher than what is shown here, more like 100-200% and 18% is a minimum average level because of the halvings)
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