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@ Beau
2025-05-08 21:06:14
I understand people have made the “SoV before MoE” argument before and I’m not intending to agree with everything they said. My claims are based on my own research and understanding of monetary history and predictions about how Bitcoin may differ from historical monetizations (because Bitcoin is unique in that there was a time before it existed and it also went through a brief period of hyper(supply)inflation.
The chicken and egg analogy works at a high level, but I should add some nuance to my claims. I believe _wide spread_ use as a SoV is a prerequisite to wide spread use as a MoE. But the ability to use something as a MoE is a prerequisite to the usefulness in something as a SoV. You can’t store value in something if it’s impossible to transfer or spend it.
So yes transactions must happen as proof that they can happen and this is necessary for anyone to make a decision to store value in it for use in the future.
FWIW I’m not intending to invoke Greshams law.
When you say monetary demand (and when OP said monetary use), I assume you mean as a MoE. One can demand and use money as a SoV also.
Before Laszlo bought pizza with bitcoin, bitcoin’s value rose infinitely from 0 to a fraction of a penny. It stored value better than anything in history despite also undergoing hyperinflation.
Bitcoin will be more widely adopted as a SoV before MoE because self interested actors are incentivized to do so. Bitcoin is an amazing SoV because of game theoretic and praxeologic incentives. The incentives for using bitcoin as a MoE today are not nearly as strong.
I’d argue that MoE is not even the goal. It’s a side effect of the goal. The aggregate of all things valued by humans is deteriorating overtime because we have broken stores of value. Bitcoin fixes this. Once everyone realizes Bitcoin fixes this, they will not accept anything but bitcoin payment. In the meantime, if 99% of people don’t use bitcoin, it’s perfectly fine to pay them in something else so that you can save more time, energy, and money that can otherwise be used stacking sats and increasing the % of global value stored in bitcoin.