AntonioDominguezG55

bitcoin_beginners

Making a Store

TammieNicholsonZZQ

![](https://i.postimg.cc/8cZNd92v/IMG-3459.jpg)

Music

Jack Dorsey's Block lays off 'large number' of staffers

CodyGregoryQS3

Tony Giorgio, one of a kind
Proof-of-Work, has to be mined
Your transaction is invalid, unless it is signed
Sounds money for all, the incentives aligned!


opensource

I've been in two minds about the front of the following item, which is why I'd like to hear some opinions about it:

![](https://m.stacker.news/63484)

![](https://m.stacker.news/63485)

Initially, I very much liked the central seam, as it makes the pouch look like it's "folded together", and if assembled perfectly, said seam also lines up nearly with the seams on the sides, giving it a "rounder" look as well.

On the other hand it's a structural seam which I *could* leave out, initially fabricating the pouch out of *one* piece of fabric, but I've had major issues with the final dimensions of trial-runs, which is why I'd like to stay away from that.

I'd like to keep it as clean and minimal as possible, but that doesn't mean there ain't something "missing"... 🥲

I've been thinking about simply adding my logo centered a centimeter-or-ish above- or below the central seam, what do y'all think?

What Do Y'all Think Of The Front?

bitcoin

Books And Articles Newsletter, Issue 37

HelenOlsenI22

Stacker_Sports

Anytype — the everything app (alternative for Notion)

StanleyFlowersDJR

This is the kind of discussion I like to see. Not the tweet you link to but bitcoiners thinking about possible problems with the status quo. There are some good comments in this post (@027c352e45, @elvismercury, @DarthCoin & @Scoresby).

1. We do need more clients than just bitcoin core
2. A written spec does make sense to me for a project this important
3. We have other clients but usage is limited
4. We are still very early. Things can and will change but you make a strong point.

econ

I am Bernard Parah, CEO of Bitnob, AMA!

BrettAdkins3SS

So whoever has collected the KYC information, will always have a record of that amount of bitcoin to your name, no matter how much mixing you do. 

This might be a concern if you think your government may one day come knocking on the door demanding your coins (rather like the gold situation in the USA in the 1930s).

The only way to clear this record is to sell the KYC coins back to the KYC exchange, thus settling the balance to your name to 0.

If that isn't a threat you're worried about, then mixing will still offer forward privacy. It will obscure from the KYC entity where you later spend your coins. This may still be valuable to you.

All depends on your threat model.

I noticed that only 100 people are getting daily rewards. That was a new feature introduced in the second month of Million Sat Madness, as I recall. 

The purpose, as explained to me by @ek, is to prune the left tail of the distribution and give more rewards to our more substantial contributors. That's great, but 100 is completely arbitrary, so I think we can do better.

Why not make use of our beloved cowboy hats and reserve daily rewards for cowboys?

If it starts seeming like too many people are drawing rewards, make cowboy hats harder to find.

## Other Ideas
* Include referrals in the rewards calculation, maybe as daily activity of your referred stackers
* Reward downzapping bad content, as well as zapping top content
* Reward SN donations
* Randomize the parameters in the rewards calculation
* Daily rewards have to be accepted within 24 hours or they go back in the pool
* Factor engagement into top post rankings
* Include all-time stacker value in the rewards calculation

That's it for now. I don't necessarily endorse all of these ideas, but I've been mulling them over and I'm curious what other stackers think.

Are there tweaks to the rewards system that you'd like to see?

Only Cowboys Get Rewards: and other ideas

What's So Bad About Trump?

DestinyJoyce7N3

In a [famous paper](https://www.econlib.org/library/Essays/hykKnw.html), Hayek laid out the argument for the decentralized intelligence of the market more clearly and succinctly than anywhere I've seen.  Lyn cites this paper, and asks:

> “Does a small group of centralized, academic policymakers in a room located in their nation’s capital — akin to a council of elders — have a better grasp on how to allocate their country’s labor and capital than the millions of people do at the individual level?” (p. 228)

This critique made sense in the era in which Hayek was writing.  However, given that the availability of information, the speed at which it propagates, and the computational and analytical power that can be used to process it have increased to almost unimaginable degree since the Soviets attempted to centrally plan their economy, is it possible that Hayek's assumptions about decentralized intelligence no longer hold? 

Introducing Citrea: Bitcoin’s First ZK Rollup

Rambling Deflationary thoughts

- If you earn in bitcoin, spend in bitcoin, save in bitcoin, and use bitcoin as a unit of account. You can ignore the fiat conversion rate. 

- When your living on a bitcoin standard, you've switched from an inflationary system to a deflationary one. Every year goods and services will cost less sats, rent becomes cheaper every year and Instead of arguing for a raise, your employer would have to argue for your paycut. 

- You'll probably be able to retire off of a couple million satoshi's, because by the time you retire, your rent will have dropped from 5 million a month to 1k a month (and I'm talking about satoshi's). Groceries will cost a couple hundred sats a month maybe. 

- I told my dad that prices of everything fall forever until they're free. 
He said "Huh? That's not true, just look at the grocery store or housing prices"
I said "I know, exactly. Every year it costs me less and less, the only reason I was able to afford my condo, was because the prices started rapidly dropping. Buying the condo was a bad idea, because real estate is a depreciating asset akin to a liability, they fall in value over time compared to the money in my savings"

And. 

- We're living in an environment were we are getting seriously overpaid in bitcoin while fiat is seriously overpriced. I'm making millions of satoshi's a month. I'll never be able to make this kind of money again. When the dust settles and you tell your children how much you made a month in satoshi's, they'll call you a legend.

Rambling Deflationary Thoughts


![economics](https://imgprxy.stacker.news/N5oemexK-8pmqb4-avH0_zZlynIjmjX-GEicMn54Yk0/rs:fit:600:500:0/g:no/aHR0cHM6Ly91cGxvYWQud2lraW1lZGlhLm9yZy93aWtpcGVkaWEvY29tbW9ucy8yLzIwL0Vjb25vbWljcy5qcGc)

Studying bitcoin involves learning something about damn near everything.  For me, I was introduced to computer science, coding, and cryptography, none of which I knew much about before falling down the rabbit hole. You will also learn about history, law, monetary theory and economics, all stuff I was interested in since the 1970s. My purpose here is to briefly explain a few economic concepts you may have never heard of before. If you start reading articles about bitcoin or listening to podcasts these terms will be thrown around as if they’re common knowledge. 

I hope this short guide helps to flatten the learning curve. 

### Fiat Currency

Merriam Webster’s Dictionary defines fiat money as “money (such as paper currency) not convertible into coin or specie of equivalent value.” This is another way of saying that it is money not backed by an asset. Fiat money is money that is created by “fiat”, or decree of a governmental entity. The word fiat is defined as “an authoritative or arbitrary order.” I like to think of it as Joe Biden, or whichever grasping, ambitious insect has fought its way to the top of the dung heap when you’re reading this, standing at the peak with a crumpled dollar bill displayed in its outstretched hands shouting, “This is money!” 

So, the next time some wiseass says to you “bitcoin isn’t backed by anything”, you can respond: “neither is [fill in the blank with your favorite government money]”.

The conversation will not likely end there.

The fiat fan will say: “that’s not true, it’s backed by the full faith and credit of the [United States] government.” 

You then stare at him open mouthed and ask if he’s serious.

This points out the peculiar nature of the current fiat based system. There was a time not so long ago when the U.S. was considered creditworthy.  Every nation in the world wanted to buy U.S. treasury bonds, which are really just fancy IOUs. Not any more. Guess who buys U.S. debt now? The U.S. government buys back its own debt. That’s a little oversimplified. U.S. pension funds and various mutual funds and ETFs also have to buy U.S. debt pursuant to their mandate. Here’s the interesting thing, though. For years, and probably even now in some circles, a U.S. treasury bond has been considered the world’s “risk free asset.” Check out this quote from the [Smart Asset](https://smartasset.com/investing/understanding-risk-free-assets-guide) web site:


> A risk-free asset is an investment with a guaranteed future value and virtually no potential for loss. Debt issued by the U.S. government (bonds, notes and Treasurys) is one of the most well-known risk-free assets. While these assets are no longer backed by gold assets, they are backed by the “full faith and credit” of the United States.
> Investors shift their portfolios into risk-free assets during periods of uncertainty. U.S. Treasury bills are generally regarded as the safest investment in the world, which is why domestic and foreign investors buy so many during a downturn.


Ponder, if you will, the insanity of this quote. In the upside down, crazy world fiat money creates, the IOUs of a government that has shown no constraint in debasing its currency is considered a risk free asset? 

That’s probably why all those banks and insurance companies loaded up on U.S. treasuries these past few years. It never occurred to them that Jay Powell might start jacking up interest rates in a futile attempt to tame inflation. The value of those “risk free assets” plummeted as interest rates climbed. 

We won’t know how this all ends for a while, but it won’t be pretty.

To sum up, fiat money is debt. 

### Seigniorage

[Seigniorage](https://www.investopedia.com/terms/s/seigniorage.asp) is another word you should learn. It is defined as:

> the difference between the face value of money, such as a $10 bill or a quarter coin, and the cost to produce it. In other words, the cost of producing a currency within a given economy or country is lower than the actual exchange value, which generally accrues to governments that mint the money. 


The goal of all governments is to maintain positive seigniorage, that is, making sure the cost to produce the money is less than the face value of the money. The difference is pure profit. 

Have you picked up a U.S. penny recently? It’s lighter than air. Compare one to a 1950s penny, if you can find one (see Gresham’s Law). They are light as a feather. As the government debases the U.S. dollar, it’s nearly impossible to keep the costs of producing a penny below its face value, but they try. The government isn’t too worried, though, because it more than makes up for it in the switch to digital dollars. Hardly anyone uses coins in the United States anymore. They don’t even need to spend much on ink and paper for the old one dollar bill. Everyone uses credit cards or debit cards or paypal or venmo to pay for even the smallest items. There is negligible cost in mouse clicking billions of dollars into existence.  

Governments love seigniorage. 




![cantillon](https://imgprxy.stacker.news/bhWto13fOOsEx0q5iHH7Btq3KXrQOMxWnEKnhqD6ZLU/rs:fit:600:500:0/g:no/aHR0cHM6Ly91cGxvYWQud2lraW1lZGlhLm9yZy93aWtpcGVkaWEvY29tbW9ucy85LzljL0FuX0Vzc2F5X29uX0Vjb25vbWljX1RoZW9yeS5qcGc)

### Cantillon Effect

Richard Cantillon was an 18th century banker and philosopher. He [articulated](https://river.com/learn/terms/c/cantillon-effect) the principle that “the flow of new money through the economy is beneficial to parties that receive the funds first, and less beneficial to those that receive it later on. The individuals and institutions closest to the central bank – banks and asset owners – are granted financial advantages at the cost of those least connected to the financial system.”

What this means, in essence, is that it’s good to be close friends with the guys printing the money. That’s because, in a fiat system, money can and will be created whenever the government feels like it. Since there’s no real cost involved to make this money, there is no reason for the government to stop issuing it. 

When more money is pumped into the system, the price of goods and services eventually rises, since each unit of fiat is worth less, so you need more of them to buy that bagel or new car.  But, the guys who get the new money first get to use it and spend it BEFORE the inflation sets in. 

![bank](https://imgprxy.stacker.news/mKoLm2vJp-GUeJi295OBdiZe5ZFfc8dkbB7ISqDuUV4/rs:fit:600:500:0/g:no/aHR0cHM6Ly91cGxvYWQud2lraW1lZGlhLm9yZy93aWtpcGVkaWEvY29tbW9ucy9hL2FiL0ZyZWVkb21fSG9tZXMlMkNfR292ZXJubWVudF9CYWlsb3V0X01vbmV5XyUyODM0NzMyNjQ0NDglMjkuanBn)


A good example of this is the U.S. banking system. Nowadays, new money doesn’t really get printed by the government. What happens is that the big banks with the political power get to borrow money from the federal reserve at what’s called a “discount rate.” So, if you want to get a new mortgage, these banks don’t pull money out of their vaults and lend it to you. Instead, they borrow it from the federal reserve at, let’s say 4 percent interest, and then they lend it out to you at, say 7 percent interest. So, the banks get all that profit, when they have really done nothing but create this money you use to buy your house out of thin air. They literally borrowed the money into existence. The consumer has to pay the retail interest rate set by the banks while the banks get the special, insider discount. 

Another example of this was on display during the “Covid Crisis”.  The U.S. government decided it needed to create more money to stimulate the economy it destroyed by shutting down businesses. But, the government didn’t shut down all businesses. Some could remain open. It’s good to be friends with the king. So, [churches](https://www.chicagotribune.com/suburbs/daily-southtown/opinion/ct-sta-slowik-essential-businesses-st-0326-20200325-p23fiwranjc5tcxecvrzynrcky-story.html) were closed down, but liquor stores could remain open, because they provided a vital service. The government next began to issue covid loans to help the businesses it just destroyed. Makes sense. Big, powerful corporations with lots of employees got PPP loans for each employee on the payroll. This was free money because the loans were all forgiven. The businesses got this money even if they were allowed to remain open, as many large businesses (like Amazon) were. Lots of politically connected businesses with powerful connections in Washington D.C. got this free money. Unfortunately, little mom and pop businesses were forced to shut their doors, and their PPP loans didn’t help much, since they only had a few employees. Too bad. They should have made friends with the king before the “pandemic” hit. 


### Rent Seeker

You hear this term a lot when learning about bitcoin. It is always spoken with derision, which really confused me at the beginning. I was a landlord for many years, and I was always seeking rent. Hey, I had to pay my bills too! What are we, communists? Why was this a bad thing? 

Investopedia has a nice [definition](https://www.investopedia.com/terms/r/rentseeking.asp) of rent seeking:

> The concept of rent seeking was established in 1967 by Gordon Tullock and popularized by Anne Krueger in 1974. It evolved from the studies of Adam Smith, who is often regarded as the father of economics. The concept is based on an economic definition of “rent,” defined as economic wealth obtained through shrewd or potentially manipulative use of resources.

So in this context, rent seeking means that a business entity seeks to gain wealth without having to do any actual work. This is a lot different than the rent I collect, since I have to pay mortgages, taxes, repair expenses, etc. There’s nothing free about that rent. 

Rent seekers gain this wealth by seeking favor from the government. Lobbyists spend most of their time “rent seeking” for their clients. The bigger the business, the more lobbying power it has.

Here are some examples of rent seeking:


 
- A bank getting a lower discount interest rate to then turn around and lend to borrowers (see Cantillon Effect Above)

- Government subsidies

- Grants

- Tariffs

- Good old fashioned political bribes 

- Manipulating the legal system to create barriers to entry and limit competition (law licenses, CPA licenses, barber licenses, taxi licenses, real estate broker licenses)


Tullock noticed that rent seekers usually get a great deal. In other words, they get an enormous financial gain at a proportionately very low cost. This is known as ***Tullock’s Paradox***. 

I always wind up thinking about proof of stake(POS) shitcoins as being analogous to rent seeking. The stakers seek to earn money solely due to their advantageous position as holders of a large quantity of coins. They may likely have obtained this hoard as a result of an unfair pre-mine, where insiders got a special low price. Their financial rewards are not related to any productive work being done. They merely benefit from having a large stake. 

This is the opposite of bitcoin, where proof of work (POW) is always required to gain more bitcoin. It requires time, effort, and energy. 



![gresham](https://imgprxy.stacker.news/3vqwhnme00L3fCZ-Vq8A0WCIS7bNCwOLr8cjMFNhN1g/rs:fit:600:500:0/g:no/aHR0cHM6Ly91cGxvYWQud2lraW1lZGlhLm9yZy93aWtpcGVkaWEvY29tbW9ucy83Lzc0L1Npcl9UaG9tYXNfR3Jlc2hhbV9mcm9tX05QRy5qcGc)

### Gresham’s Law

Sir Thomas Gresham was a British merchant and financier who lived from 1519 to 1579. He wrote about the value and minting of coins.
Gresham's law is a principle that states that "bad money drives out good."

When I was a kid in the 1960s I used to help my father out in his pharmacy after school. One of my chores was to go through the cash register at the end of the day and take out all of the pre 1964 silver coins. In 1964 the U.S. government removed all the silver from dimes, quarters, and half dollars. I would look for the telltale brown ring along the edge of the coin. If there was no ring, I would take that coin out of the register and place it in a brown paper bag. We stored those bags in the attic. This is what Gresham’s Law is all about. My dad knew the silver coins were “better money” than the crappy alloy slugs the U.S. mint began issuing after 1964. So, he would save the good money, and get rid of the bad money by using it as change for his customers. 
Now, governments aren’t completely ignorant of Gresham’s Law. They combat this by forcing their citizens to use their fiat money. That’s why taxes usually must be paid with “official” money. This theory also played a role in the U.S. courting Saudi Arabia in the 1970s, agreeing to financially and militarily support the kingdom in exchange for establishing the U.S. dollar as the currency for all international oil trade. In essence, governments use force to protect their officially approved currency. 
Every time I see an article about bitcoin adoption that laments long term hodlers refusing to spend their bitcoin, I think of Gresham’s Law. There are many articles marveling about how the percentage of bitcoin that hasn’t been spent in years keeps growing. Why would anyone spend good money when they can trade depreciating fiat for the goods and services they need? It’s a struggle for me too. I would much rather spend and rid myself of the depreciating U.S. dollars I own than my precious bitcoin. I have to force myself to load up my bit refill Dunkin Donuts gift cards. This is a factor to consider when evaluating the pace of bitcoin adoption. 

### Conclusion

I hope some of you found this article useful. If it whet your appetite to learn more about Economics, I recommend a book called *Economics In One Lesson*, by Henry Hazlitt. This is a good introduction to the Austrian School Of Economics. We have been force fed [Keynsian Krap](https://fee.org/articles/henry-hazlitt-and-the-failure-of-keynesian-economics) in the west for too long.  
You will discover Ludwig Von Mises and Friedrich Hayek if you are interested in learning more. 
Saifedean Ammous wrote a book called *The Bitcoin Standard*, which is widely considered the best introduction to bitcoin. Recently he wrote another book called *Principles Of Economics*. It is a university level textbook that teaches economic theory from an Austrian perspective. You might also want to give this book a read if you’re really interested, but be prepared to work hard. It can be a bit overwhelming.


