The SNI Mempool Crash Course in Bitcoin Political Economy

Hyperbitcoinization

It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self fulfilling prophecy.

Satoshi Nakamoto, 1/17/2009

The following is a partial annotated bibliography of the SNI Mempool, building the case for why Bitcoin will displace all competing currencies, including altcoins, fiat money, and precious metals:

In terms of monetary policy, Bitcoin is the greatest money the world has ever seen.

Bitcoin brilliantly uses the concept of proof-of-work to create consensus in the network. From this, a vision of the future could develop, which in turn gave bitcoins real market value.

Unsurprisingly, Bitcoin has gained substantial popularity, and there is no reason to believe it will not continue to grow. This growth is not merely a bubble.

Given expected growth, people have reason to hoard bitcoins. This increases the value of the network, giving more reason to hoard. Hoarders can also increase the value of their holdings by investing in open-source development that makes the network more valuable as a whole.

As it grows, the network effects of its competitors shrink, and ultimately there can only be one currency.

Volatility currently exists, but so what? If anything, that's a good thing. Hoarders are not swayed.

Despite people's worries, Bitcoin does not suffer an image problem because of potential illicit usage. In fact, its ability to bypass legal restrictions is one of its biggest selling points and should be celebrated.

Those who are hoarding are already using Bitcoin as their unit of account, in order to calculate long-term opportunity costs.

Indeed, Bitcoin has already positioned itself as the best store of value, unit of account, and medium of exchange around.

As it grows, it will not only displace competing crypto-currencies but also begin engaging in speculative attacks against weaker fiat currencies.

Within the system, the protocol rules are bound by the investors. Attacks on the system are possible, but they require entrepreneurship, which takes time. Meanwhile Bitcoin's growth creates agency problems in coordinated attacks by instead incentivizing defection.

In the end, we can expect Bitcoin to displace all other currencies, rapidly, in a process of hyperbitcoinization.

With hyperbitcoinization on the way, everyone becomes a scammer. Willpower is the hoarder's only defense.

Safe travels.