Bitcoin Horror Stories
Bitcoin Dies, Moldbug ventures, perhaps sometime this year. Following a broad DOJ indictment for money laundering, targeting any and everybody remotely connected with the free currency, the “BTC/USD price falls to 0 and remains there.”
“[R]emains there” — how cute is that? Ph’nglui mglw’nafh Bitcoin R’lyeh wgah’nagl fhtagn.
Bitcoin simulates gold, and once ‘mined’ it lasts for ever. If it “falls to 0” it has to remain there, for eternity, because it can never be finished. It can die, but never be destroyed. It’s built for undeath.
‘Moldbug Monetary Theory’ attributes the value of money exclusively to speculation. If the speculators are terrorized sufficiently, BTC drops onto the flatline, and “remains there.” The market would be totally extinguished. What Mao failed to achieve, let alone sustain, USG would somehow accomplish, perhaps by exhibiting greater revolutionary ardor and ruthlessness.
Ruthlessness would certainly be necessary, for the obvious reason that flatline-BTC has zero downside risk. It’s a one-way bet that someone, somewhere, will re-animate it (“nothing is unstable” (thanks to fotrkd for the reminder)). If a genius was designing irresistible speculator-bait, zero-degree bitcoin would be hard to improve upon. It’s free, and it’s only worth nothing if the cops can secure the crypt flawlessly, and forever. Did anyone say ‘free money’?
Speculation messes with time, by bringing the future forward. If undead BTC were ever to be re-awakened, it already has been. Its economic potential flows back down the timeline, modified by a time-preference discount. The feedback becomes strange, and difficult to confidently calculate, but it works as a vitalizing charge, and the corpse unmistakably twitches. Whatever money at t0 is worth, if it’s anything at all, at t0-n it almost certainly can’t be zero.
The Necronomicon describes flatline-BTC with creepy exactitude:
That is not dead which can eternal lie,
And with strange aeons even death may die.
ADDED: An alternative take on Bitcoin and undeath from Yifo Guo, interviewed here (H/T Nick B. Steves, in this comment thread): “… the point is, the idea will never die. Even if bitcoin dies, an alternative will arise, one that addresses the vulnerability that was previously exploited. Then you get bitcoin 2.0.”