For the Bitcoin disciples among you, here is an excerpt from my monetary model, with which we may just manage to enter a new age of prosperity. My idea of a fair monetary system has never existed in human history. And I believe God will let Bitcoin fail, because it is not suited to making the next leap and carries an inherent design flaw (you can study the whole model in english and german on my website):
Addendum: Bitcoin and the prison of absolute scarcity
If verifiable scarcity is what makes money strong, an objection suggests itself: Bitcoin is scarcer than gold. Its maximum supply of 21 million units is fixed in the protocol, its issuance schedule is public, and its authenticity can be verified without a vault or an assay laboratory. Why not Bitcoin as the monetary bridge?
The answer is not that Bitcoin is insufficiently scarce. It is that its scarcity is completely decoupled from the development of civilisation. Gold can abolish itself over centuries. Bitcoin cannot. It becomes a prison.
Coupled and absolute scarcity
The scarcity of gold is tied to the technical capabilities of humanity. The same machines, energy sources and processes that make food, housing and tools cheaper also open up deeper deposits and lower ore grades. If gold's purchasing power rises strongly, additional mining pays. Progress on the goods side and progress on the money side remain connected. This scarcity is physically coupled.
In Bitcoin, this connection is deliberately severed. If chips become more efficient or energy cheaper, no additional coins result. Roughly every two weeks, the protocol adjusts the difficulty of mining so that new blocks appear at the same rate regardless of how much computing power is deployed. Every technical gain evaporates in the competition among miners. The quantity issued follows the halving schedule alone until the cap is reached. Progress never changes the quantity. This scarcity is absolute.
Precisely here lies the difference that matters for this thought experiment. Gold has a valve: as the world grows richer, its scarcity can diminish with it, and the metal can gradually withdraw from the exchange of goods. Bitcoin has no valve. Its scarcity persists however far civilisation advances.
The prison tightens with progress
In a world of moderate growth, a fixed money supply may be bearable. The model of this Fieldnote, however, aims at the opposite: at automation, energy abundance and a production of goods that grows faster than ever before. With a fixed money supply and strongly growing production, the price level falls at roughly the rate of that growth.
At two per cent, that is the productivity deflation this Fieldnote defends. At twenty or thirty per cent, it becomes a brake. Simply holding then yields the growth rate in real terms, and every investment must clear that hurdle. Even sensible ventures go unfunded because waiting is safer than building. Debts, rents and wages would have to fall continuously in nominal terms, and it is precisely there that prices adjust most slowly. The more successful the technology, the harder the fixed quantity throttles the economy.
Gold would respond differently in the same situation. An extreme rise in purchasing power would make deposits, dumps and tailings profitable that count as waste today. Mining would rise with a delay but strongly, and relieve the pressure. Bitcoin cannot do that.
The frozen distribution
Then there is the question of power. With gold, new mining continually distributes part of the scarcity rent to new miners, workers and participants. Whoever holds gold early sees their share of the total stock diluted over time. With Bitcoin, the initial distribution is final. Whoever holds the early units participates in all future progress without new issuance ever reducing their share.
The real sharpness, however, arises only within the abundance scenario itself. When food, energy and many everyday goods cost hardly any money, money increasingly buys only what remains scarce: land in desirable places, unique goods, influence, human attention. The entire purchasing power of an absolutely scarce money is then directed at these residual scarcities. The claim of the fixed holders on what remains grows with every step of abundance.
Gold withdraws as the world grows rich. Bitcoin concentrates on what is left.
Two objections
One might reply that Bitcoin, too, would lose importance if abundance reduced the need for money overall. That is true, but it changes nothing about its scarcity. A less-used Bitcoin remains an absolutely scarce Bitcoin. The distribution remains frozen; it merely governs less of everyday life and all the more of the remaining scarcities.
One might equally object that the community could raise the cap by changing the protocol. But that would be exactly the discretionary decision about the money supply that Bitcoin set out to overcome. An exit that leads only through politics is not a mechanism of self-regulation. It confirms that the system itself has no exit.
Bridge or prison
Bitcoin is a remarkable technology for verifiable, censorship-resistant transfer. As the monetary anchor of a civilisation on its way to abundance, however, it carries a design flaw that follows precisely from its greatest strength. Its scarcity is protected against every change, including the progress that is supposed to make scarcity obsolete.
Coupled scarcity can pass away with progress; absolute scarcity cannot. Gold is a bridge a civilisation can leave behind. Bitcoin is a prison whose walls grow with prosperity.
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