Thoughts on the economics
and philosophy of Bitcoin

about

This is a personal blog with no other intention than to

a) introduce people to new ways of thinking about Bitcoin and

b) to explore interesting topics in the space in order to understand it myself.

In my own “Bitcoin journey” it took me years to even begin understanding how big of an innovation I was looking at. There wasn’t one big lightbulb moment but rather a series of realizations that sent me chasing the rabbit further and further. In hindsight, I know what kept me from understanding Bitcoin in the beginning: Not finding the right sources. Mainstream media doesn’t get Bitcoin – or doesn’t find ways to treat it seriously. If you want to find out more, Google’s your enemy, not your friend.

Like many, I first discovered Bitcoin in 2017. Crazy price movements kept mainstream journalists busy figuring out what this thing was that just kept pumping higher and higher. First, I discarded it. Then someone explained to me that this was “digital gold”. I liked the analogy but didn’t make much of it. Mostly because I didn’t have an understanding of what gold was. But I decided to dig a bit deeper.

While the price was slowly but surely declining more than 80% from its highs, my knowledge about Bitcoin was growing – exponentially.        

With the crash of 2018, my investment journey unfolded in a different way than I had expected. It was a much wilder – and more painful ride – and mostly downwards in price. But ironically, this experience created a different kind of asymmetry: While the price was slowly but surely declining more than 80% from its highs, my knowledge about Bitcoin was growing – exponentially.            

Innumerable articles and literally hundreds of hours of podcasts later, I finally read Saifedean Ammous‘ book „The Bitcoin Standard“. Rightfully considered the Bitcoin bible by many, the book is much less about Satoshi Nakamoto‘s innovation than about the history of money. It was eye-opening. I didn’t just learn the different tools humans used as money, but most of all what exactly made good money. Why did sea shells, salt, rai stones or gold coins work as money? And why and how did some of these forms of money fail?

I realized that this wasn’t a crazy tech experiment. It wasn’t the hot new startup. It wasn’t a shiny new app. and it surely wasn’t the Myspace of social media.

I began understanding the nature and importance of money. And only after that sank in, I understood the intellectual depth of Bitcoin. I realized that this wasn’t a crazy tech experiment. It wasn’t the hot new startup. It wasn’t a shiny new app. and it surely wasn’t the Myspace of social media. It was a once-in-a-species innovation that perfected all properties of money: portability, divisibility, recognizability, durability and, most importantly, scarcity.

I think that Bitcoin presents an opportunity to everyone. Even if you live in a wealthy state in a part of the democratic world. Even if you‘re not fleeing your country and struggling to take your wealth with you. Even if you‘re not living in a dictatorship that suddenly bans you from using government money. Even if you‘re not part of the unbanked in the world; or part of a financial system destroyed by hyperinflation. Bitcoin’s value proposition is fundamental: It‘s a savings technology. It‘s a store of value that allows you to send the fruits of your labor across both time and space in a completely self-sovereign way.  

My own Bitcoin journey taught me many things. Mostly: Understanding it takes time and effort. There are no shortcuts. Some of the smartest people in the world have failed because they‘ve judged too quickly. Economics professors, well-established financial experts, fund managers and politicians have misunderstood Bitcoin – again and again. Some revisited to change their minds years later.

Here’s nothing more than a few fresh angles to consider when thinking about Bitcoin. The thoughts are my own, based on the amazing work by some of the great thinkers in the Bitcoin space.