2/ In its first few years #Bitcoin https://abs.twimg.com/hashflags... draggable="false" alt=""> appeared to be both a disruptive payment rail (near zero transaction fees) and a promising store of value (dramatically increasing in value over time).

Yet written in the code that powered its network were rules that guaranteed only one outcome
3/ #Bitcoin https://abs.twimg.com/hashflags... draggable="false" alt="">& #39;s "consensus rules" are the set of rules agreed upon by all computers running on the Bitcoin network. Only those computers abiding by these rules are accepted as a part of the network. Perhaps the most famous rule is the number of bitcoins that are created per block.
4/ #Bitcoin https://abs.twimg.com/hashflags... draggable="false" alt="">& #39;s consensus rules are, by the game theoretic nature of the network, incredibly difficult to change. To change a rule would require the agreement of overwhelming majority of computers running on the network.
5/ From a purely software perspective, the difficulty of changing #Bitcoin https://abs.twimg.com/hashflags... draggable="false" alt="">& #39;s rules and core parameters might seem like a disadvantage that would eventually consign Bitcoin into obsolescence. Rather the difficulty preserves Bitcoin& #39;s most valuable property: https://twitter.com/real_vijay/status/928384151203414017">https://twitter.com/real_vija...
6/ Fundamentally, demand for bitcoins arises from the scarcity of supply (no more than 21 million will ever be created). Yet belief in the scarcity of #Bitcoin https://abs.twimg.com/hashflags... draggable="false" alt="">& #39;s supply rests completely on the credibility of its monetary policy. If easily changed, that policy has no credibility.
7/ Much like a protocol, such as TCP/IP, or the shape and specification of a power socket, changing Bitcoin& #39;s consensus rules with a "hard fork" would come at great cost, ultimately destroying Bitcoin& #39;s core value proposition. https://twitter.com/real_vijay/status/1229808887362019328">https://twitter.com/real_vija...
8/ Given the necessary difficulty of changing #Bitcoin https://abs.twimg.com/hashflags... draggable="false" alt="">& #39;s rules - in particular the number of transactions that can be processed per block - it becomes clear that as demand for Bitcoin increases, eventually fees per transaction must rise.
9/ Growing fees and a limit to the number of transactions processed per block implies that under widespread adoption, #Bitcoin https://abs.twimg.com/hashflags... draggable="false" alt=""> would simply be uneconomical for use in global daily commercial transactions (such as purchasing bread). Yet its purpose is so much larger...
10/ ... #Bitcoin https://abs.twimg.com/hashflags... draggable="false" alt=""> is perfectly suited as a global monetary base, much as gold was in the 19th century, providing a means of final settlement between large financial institutions and large-scale value transfer. https://twitter.com/real_vijay/status/1058121612875034624">https://twitter.com/real_vija...
11/ As a global monetary base, a #Bitcoin https://abs.twimg.com/hashflags... draggable="false" alt=""> standard would be far superior to a gold standard with all the problems that are attendant of gold& #39;s physicality

- Costliness of security and transportation
- Difficulty of assaying
- Centralization of storage (enabling confiscation)
12/ We are still very early in #Bitcoin https://abs.twimg.com/hashflags... draggable="false" alt="">& #39;s path to becoming a global monetary base. This presents an odd situation where individuals can still own large fractions of this base. It& #39;s almost as peculiar as regular people owning 100 kilogram gold bricks under a gold standard.
13/ As #Bitcoin https://abs.twimg.com/hashflags... draggable="false" alt="">& #39;s price continues to rise, large HODLers of its supply will have a powerful incentive to diversify their appreciated bitcoins into other assets (such as homes/stocks/bonds/sports teams etc) and thus the supply will slowly but surely be distributed.
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