FINALLY got the BTC value thesis. Check this out: BTC is basically hard money. What does this mean? The supply of dollars can be artificially inflated. The supply of BTC cannot. There's just a finite supply, once it is mined, it's mined forever. 1/5
There was a recent BTC sell-off. A few large holders in need of liquidity sold to many small buyers. What effectively happened, what effectively has been happening, is that BTC is getting transferred from people with high-time preference to people with low-time preference. 2/5
Price, of course, is a function of supply and demand. Supply is made of two parts: stock and flow. Stock meaning the existing stockpiles, flow meaning the production. Flow, or the production, is limited as it cannot be artificially inflated. 3/5
Once flow is at 0 the stock will be distributed among people with low-time preference, meaning they won't be that interested in selling it. This expectation of scarcity drives a self-fulfilling prophecy where demand is expected to dwarf supply thus ensuring the price goes up. 4/5
The rational expectation of price going up over the long-term makes it so that people with low time preference stock up on it even more thus further driving the self-fulfilling prophecy to completion! It's an extremely ingenious system. 5/5
Did I fuck anything up? @bitstein @pierre_rochard @saifedean
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