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You don’t have to want it, other people want it. You want to have a pile of lightweight, secure doodads that other people want, because that’s easier to exchang
by rcoveson 6y ago
You don’t have to want it, other people want it. You want to have a pile of lightweight, secure doodads that other people want, because that’s easier to exchange than terminal wants like cars and sheep. What’s really crazy is the only reason other people want it is this same reason; it’s circular. It takes coordination to bootstrap, but once it’s set up it can be stable. Like those circles of people all sitting on each-others laps.
- the_giraffe 6y agoYeah the greater fool theory doesn't sound too appealing to me.
- rcoveson 6y agoIt's not the "greater fool" theory. It's more like language. A new word doesn't have to have a real connection to its meaning. The word "cat" isn't structured like a cat, and when spoken aloud doesn't sound like one either. But we still like to be able to refer to cats without pointing, so we agree on something inherently meaningless and tie to to that. Fiat currency is the same way. Rather than point a giant network of contracts together in order to create some monster transaction that satisfies a few hundred people evenly, we just agree to respect the unique-but-valueless papers produced by the crazy guy who will imprison anybody who tries to produce those same papers. It didn't have to be these papers; it didn't have to be bitcoin. It just had to be something that had the necessary properties: unique, scarce, lightweight, secure, and, most importantly, used by as many other people as possible.