Bitcoin monetization

Bitcoin is the ultimate non-sovereign collateral, making it perfect as the new international monetary base  —  Vijay Boyapati

 

During the monetization process, the distribution of a superior monetary good smooths among people.

The smoothness on the distribution is a monetary property, so the more evenly distributed a good becomes, the more valuable it is as a monetary item (other things being equal). A feedback loop occurs because as its purchasing power grows, the incentives for savers to diversify increase, so its distribution tends to further smooth.

Bitcoin is the first good in history that is being monetized in real time.

As any revolutionary innovation that transgresses established regulations, its adoption confronts challenges; therefore general expectations may vary quickly, which implies high volatility of its purchasing power.

 

Nevertheless, despite all regulations and barriers, Bitcoin stays working like a clock: “Tik tok, new block.”  In fact, Bitcoin seems to be anti-fragile.

 

What doesn’t kill you makes you stronger

 

Anti-fragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the anti-fragile gets better, it gains from disorder, thriving and growing when exposed to stressors. 

The anti-fragile loves adventures: “smooth seas do not make good sailors”.

In complex systems, anti-fragility works through layers.

Thanks to layers, it is possible to provide Bitcoin with extra functionalities while preserving the Protocol Network robustness.

Most Bitcoin transactions will occur between banks, to settle net transfers. Bitcoin transactions by private individuals will be as rare as...well, as Bitcoin based purchases are today. — Hal Finney, on December 2010.

 

The Bitcoin Network (Protocol Network) is a settlement layer, it minimizes vulnerability to third parties in a similar way to gold, but with the ability to be settled online. 

Layer 2 (e.g. Lightning Network) works like retail cash, among other applications.