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Fiat Infects Relationships With High Time-Preference – Bitcoin Magazine

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Relationships are another victim of the high time-preference infection created by fiat money.
This is an opinion editorial by Jimmy Song, a Bitcoin developer, educator and entrepreneur and programmer with over 20 years of experience.
Link to audio read of the article.
Our relationships have an unwelcome intruder, and that's the government.
A society is a network of relationships between people. An edge should be bilateral and relationships should be direct, but unfortunately, in today's fiat world, they are not. Most relationships have an authority in the middle and thus have a centralized controller. That's not necessarily a bad thing. When it comes to justice or common standards, a third party that can figure something out in the midst of conflict is desirable. Centralization is a problem when it restricts the freedom of how people want to relate, especially when there's no conflict.
I don't need to argue here the importance of human relationships for a good and happy life. That is a given and everyone knows this instinctively. Even people who are very good at sustaining themselves need relationships as can be seen in the popular TV show “Alone.” Doing without human relationships is simply not a pleasant experience. No matter how introverted you may claim to be, you still have at least a few relationships that matter. Relationships are, in many ways, the thing that makes life interesting and worth living. The relationship network is civilization.
Unfortunately, our relationships, the edges on the network of civilization, have been debased. The unwelcome intrusion by authorities making bilateral relationships have created bureaucracy and added trusted third parties. I've written about this with respect to a specific relationship, that of marriage, but this applies to many other relationships. The quality of all relationships has been made much worse by the presence of fiat money.
We all instinctively feel this. Relationships seem especially shallow and there's a high time-preference feel to them. Why do first impressions matter so much more these days? Why is it so difficult to connect with anyone at a deep level? Is life imitating Facebook where we know all sorts of surface-level details about people but little of the depth of their character? Do most people even have a desire to have deep relationships? There's clearly something askew about relationships and this essay is an exploration into why.
One of the most obvious consequences of fiat money is that it incentivizes high time-preference behavior. Why save and plan for the future when the very money that we use is debased constantly? Government promises various forms of safety nets for the long term, so why not live for the present? Fiat money changes the incentives from long-term planning to short-term fun.
As a result, relationships are not built with the view of a long time-horizon. Working relationships, friendships and even family relations are entered into with a very short-term focus. In a fiat economy, people expect relationships to provide for the here and now. It's no wonder, then, that global birth rates are going down everywhere. If you think about it, the parent-child relationship is a very long-term investment. 20-30 years is a long time to wait and in a fiat economy, such waiting just doesn't make much sense.
Sadly, a short-term focus incentivizes exploitation. If you're not in a relationship for the long term, why not burn bridges for your own benefit?
Further, the short-term nature of relationships makes them shallow. People are more concerned with having fun or getting access or making life convenient than with character, loyalty or reliability. High time-preference relationships are more volatile and require a lot more maintenance. Your relationship is only as good as your last interaction and if it wasn't fun or interesting or feel-good in some way, it's likely to end. Say some harsh truth and you're likely to no longer have a relationship, for example.
In a fiat system, people have a higher time-preference and high time-preference people are not very disciplined. This naturally means that they are liable to act more emotionally and without much regard to the long term. Many people end up burning relationships on a regular basis because the investment in that relationship wasn't much to begin with. This is especially true of people who don't need anything from you. Many of these people are rent-seekers and they're one of the blights to relationships in today's society.
Reputation used to be critical to making money. Being a good baker, cobbler or lawyer meant that you did a good job and treated your customers well. Having a bad reputation was a quick path to ruin.
Fiat money changed that.
Rent-seeking opportunities abound in a fiat money system and those require little to no reputation. Instead of being subject to market forces of supply and demand, rent-seekers need to only please the money printer. The only relationship that needs to be maintained is with whoever pays the salary. Of course, the payor of the salary usually has certain requirements and standards, but fulfilling requirements requires monitoring. The payor of the salary becomes the trusted third party in the bilateral relationship. Rent seekers will do the minimum they can to meet requirements. The third party's presence and evaluation debases the relationship.
Contrast this with a market transaction. People that are seeking your business or service are much more likely to self-monitor and invest in the relationship. They have a much longer time-horizon because they are motivated by profit, not by satisfying a boss.
Fiat jobs have essentially made long-term consumer relationships almost unnecessary. Fiat has permeated other relationships and like most fiat things, has infected and debased them like cancer.
The most obvious fiat infection is in employer-employee relationships. The government regulates the relationship through employment laws. Salaries are taxed, certain benefits are required and both sides have to fulfill requirements of the government mandates. The government is a third party in the relationship and they add a lot of friction.
Monetarily, it's a tax on the relationship, but the debasement is also in its depth. Instead of employers and employees creatively figuring out what would work for them, the government decides how the relationship has to be. Thus, much of the employer-employee relationships are standardized. There's little innovation or competition because these aspects are the same everywhere.
This is why companies feel so cold and impersonal. Fiat companies are essentially extensions of government and they become rent-seeking which make them less focused on the long term. How many employees feel loyalty to a company anymore? It's now expected that people leave a company and come back to get a promotion. Everyone is acting in high time-preference in that scenario as it costs both the company and the employee lots of money, time and energy that a good relationship would fix.
Even entrepreneurs are not exempt from government intervention as their relationships with their customers are regulated. The regulations are ostensibly for the purposes of protecting one of the parties, but end up keeping out innovation and creativity. If you wonder why some industries, like airlines, haven't progressed, it's because of these regulations and unfortunately that's most of the economy now.
Relationships that have money at the center, like employer-employee and producer-consumer relationships are not the only relationships affected by fiat money. Because politics overtakes everything in a fiat-money economy, politics makes its unwelcome entry into even personal relationships.
The prize of getting to print money is such a big incentive that everyone fights over the right to do it for their own group's benefit. Rent-seeking is a lot easier than serving the needs of the market, so political action takes on an enormous importance. Politics is by nature zero-sum, meaning that getting political benefits requires someone to lose. Thus, advancing the needs of your group is naturally going to conflict with the needs of another group.
The political arguments also become morally charged. Every argument for money ends up being a moral argument. There's a huge incentive to claim victimhood so that the moral argument for money becomes more viable. The bigger your victim status, the bigger moral claim to newly printed money you have.
Relationships are now tinged with that victimhood status and ultimately, become monetary. The balance of payment in victimhood becomes a monetary payment through fiat money. Thus, your relationship with people in another political group has an implied third party in fiat money.
People within your group create an echo-chamber quality in it, where saying something politically in opposition to that group is liable to get you ostracized. After all, you're costing them money! Fiat money reduces our relationships to the surface-level support of political ends. They feel shallow because they are.
The political and rent-seeking nature of relationships means that status takes on a huge importance. You cannot make money in a fiat economy without climbing the status ladder. Unlike a market economy where innovation, creativity and useful goods and services make you money, in a fiat economy, having the right opinions, having the right political skills and having the ability to make a good first impression are what get you in with the money printer.
This is reflected in the relationships we have. People are seeking your vote or support within your in-group so they can climb the status ladder. Organizations become larger versions of middle school with all the backstabbing, gossiping and shallowness. Even worse, relationships get dropped the minute they are no longer politically expedient. Thus, they tend to not last very long.
Contrast this to market economies, where the goods and services matter much more. The goods and services ultimately make the impression, not the political abilities of the person selling them. Further, market transactions tend to be much longer-term. Switching costs are real and people tend to want higher quality over time. Relationships in a market economy cannot afford to be fly-by-night. You can't just burn bridges without it costing you money.
Sadly this political game is all too common in friend groups and makes them have a much higher time-preference. Status within the group is more important than any bilateral relationship due to the group's political nature and that means people come and go in a friend group way more often. After all, who wants to be at the bottom of a status hierarchy when they can try their luck elsewhere?
One of the sad things I've seen over the years is the proliferation of MLM-type schemes on Facebook where people sell goods to their friends for some kickback. People are seeing friendships as a resource to make money and are perfectly happy to exploit them for that purpose. Such behavior debases the relationship as it forces money into the equation and most people are too polite to call such people out. The result is a lot of burned bridges and relationships that shatter because of the attempt at rent-seeking.
The oddity of democracy is that, at least nominally, the authorities need the consent of the governed. Consent of the governed is a good thing. But unfortunately, when fiat money enters the equation, we get deceitful governance.
We are now constantly being propagandized to believe that everything is going swell — or at least that the authorities are doing a good job — when in fact, they are not. The incentives for authorities are to get our vote because the prize of newly printed money is so huge. If they can get our vote through deception, rhetoric and propaganda even while isolating 49% of the population, they will. The truth is not fun to swallow, so the incentive is to lie and deceive. That's not a great foundation for a relationship. The cynicism, skepticism and outright hostility toward the political system reflects this.
One of the remarkable things about my journey in Bitcoin has been the quality of relationships I've had the pleasure of developing. There are a lot of good and interesting people in this space and I'm fortunate to be friends with many of them.
The incentives of Bitcoin are very different from fiat money. What I've seen is that the high time-preference people will show themselves. Indeed, many people recently have burned bridges by condemning Bitcoin Maximalists and their harsh truths. I see these people as still being under fiat influence. The people that have stayed, though, are many and they are not liable to go away easily because there's simply more character and loyalty in this group.
Bitcoin is different and changes the incentives in relationships. We care more deeply about the long term because we have savings and can plan for that. Relationships matter and weeding out the bad ones is just as important as keeping the good ones. Bitcoiners instinctively know this from the many affinity-scamming altcoiners in our space. The relationships that last are self-selecting. It's a beautiful system of how relationships ought to be.
Let's make relationships deep again.
This is a guest post by Jimmy Song. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Cryptocurrency prices today under pressure: Bitcoin falls 3%, ether 6%; Uniswap gains | Mint – Mint

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  • The global cryptocurrency market cap today remained below the $1 trillion mark

Cryptocurrency prices today came under pressure after the US Federal Reserve delivered another big interest-rate hike and warned of economic pain from the aggressive policy tightening still to come. The Fed’s determination to raise rates to levels that hammer inflation at the cost of sliding asset prices sent a chill across global markets.
Bitcoin, the world’s largest and most popular cryptocurrency, was trading more than 2% lower at $18,627, came close to dropping below $18,000 level. The global crypto market cap today remained below the $1 trillion mark, as it was down over 2% in the last 24 hours at $943 billion, as per CoinGecko. On the other hand, Ether, the coin linked to the ethereum blockchain and the second largest cryptocurrency, continued to underperform and fell more than 6% at $1,260.
“Bitcoin, Ethereum, and most cryptocurrencies traded lower on late Wednesday after the Federal Reserve raised interest rates by 75 basis points marking the third consecutive time this year. BTC continues to struggle below the $19,000 since bears are more powerful than bulls in the market. The second largest crypto, Ethereum was seen changing hands above the $1,200 level. The price of ETH has been dipping since the Merge took place as miners continued to dump their ETH in the market coupled with macroeconomic factors. If the selling pressure from miners increases, ETH is likely to fall below the $1,000 level,” said Edul Patel, CEO and Co-founder of Mudrex.
Meanwhile, dogecoin price today was also trading about 3% lower at $0.05 whereas Shiba Inu slipped more than a per cent to $0.000011. Other crypto prices’ today performance also declined as XRP, Stellar, Solana, Polygon, Avalanche, Binance USD, Polkadot, Litecoin, Apecoin, Cardano, Chainlink, Tron, Tether prices were trading with cuts over the last 24 hours, whereas Uniswap gained.
Such a backdrop offers little respite for crypto markets. They were already reeling from a $2 trillion plunge from a 2021 record high, an unraveling pockmarked with blowups such as the Three Arrows Capital hedge fund and the Terraform Labs project — whose co-founder Do Kwon is wanted by authorities.
(With inputs from agencies)
 
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Bitcoin's Accumulated Momentum Is Going To Be Hard To Stop – Bitcoin Magazine

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While "the smartest people in the room" scan the horizon, bitcoiners are out there actually building the future they want to live in.
The below is a direct excerpt of Marty's Bent Issue #1259: "Bitcoin is action. The accumulated momentum is going to be hard to stop." Sign up for the newsletter here.
This morning I listened to a recent Macro Voices podcast with Brent Johnson from Santiago Capital. It was a very good conversation about the state of the global economy, particularly focused on the dollar's relative strength against other currencies and how things may play out as the dollar continues to strengthen as prophesied by the "Dollar Milkshake" theory. Here's a link to the episode for those interested.
Toward the end of their discussion Erik (the host) and Brent make it clear without saying anything explicitly that it is insane that global markets are essentially beholden to the whims of a very select few people, central bankers, out of the billions who are alive on this planet. The fact that the world hinges on the cryptic language of people who are completely disconnected from reality and do not suffer the consequences of their actions is a bit baffling. With that being said, what I'd like to focus on is the fact the Erik and Brent ended their conversation with a brief detour to discuss the next world reserve currency. Both gentlemen acknowledged that it would likely be a cryptocurrency – likely produced by one of the governments or a coalition of governments – and will certainly not be bitcoin.
To your Uncle Marty, this is an incredibly hilarious line of thinking from a couple of individuals who seem to "get it" in regards to the fact that the fiat system is doomed for failure and it's failure is being driven by incompetent central planners. To think that the solution to bad central planning from an incompetent group will be better central planning from the same group via a fresh slate a CBDC or something like it would provide. Even funnier is the fact that they emphatically proclaim that bitcoin most certainly will not become the dominant money in the world while deriding "bitcoin maximalists". This is our edge, freaks.
While "the smartest people in the room" scan the horizon waiting to place their bets on something that hasn't materialized yet and is sure to end in failure if it ever does because it will suffer from the same centralized attributes that doomed the dollar, bitcoiners are out there actually building the future they want to live in. The macro mensches of the world can continue to sit on the sideline and pontificate about what they think will come to market. Bitcoiners will continue to act and bring their distributed, censorship resistant, sound money to market. And the headstart bitcoin has amassed is approaching insurmountable. It is a step-function improvement on the incumbent monetary system in every way.
It's provably scarce and extremely hard to change.
You can send it over the internet.
You can divide more granularly.
It is extremely hard to prevent someone from receiving or sending bitcoin if used correctly.
And, what might be the most underappreciated aspect, it is beginning to become an integral part of the energy sector. And as we're finding out now energy is pretty damn important. Arguably the most important asset on the planet. Bitcoin becoming an essential for energy producers makes it significantly harder to kill from a logistical and political perspective.
We are so early.

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Boba Network Partners With Avalanche, Boba AVAX L2 to Provide 'Faster Transactions and Lower Fees' – Blockchain Bitcoin News – Bitcoin News

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by Jamie Redman
On Wednesday, the layer two scaling solution that leverages optimistic rollup technology, Boba Network has revealed it now supports the proof-of-stake (PoS) network Avalanche. According to the Boba Network team, the new Avalanche support will produce “faster transactions and lower fees.”
Boba Network, the layer two (L2) scaling project introduced Boba AVAX L2 on Wednesday via the team’s Twitter account. “We’re over the slopes to announce our partnership as an official scaling solution for Avalanche,” Boba said. “Avalanche offers blazing fast speeds, low costs, and eco-friendly solutions: Boba AVAX L2 holds true to those values and enhances it further.”
Boba is already connected with the Ethereum (ETH) network and at the time of writing, l2fees.info stats show Boba’s fee to move ether today is $0.17, and to swap tokens the estimated price is $0.30. That is cheaper than the current 34 gwei ($0.96) to send ether onchain, according to etherscan.io’s gas tracking tool. A high-priority decentralized exchange (dex) swap can cost $8.47 per transaction onchain, so Boba’s $0.30 cost to swap, is 96.45% cheaper.
“Faster transactions, lower fees: Boba AVAX L2 is catered for all heavy transactions, throughput-reliant protocols [and] anyone wanting to be part of the next generation,” Boba further declared on Wednesday. The team further explained it is joining partner decentralized applications (dapps) like Sushiswap and Evoverses with the new support. Boba added:
While Sushi will be deploying their Legacy Swap on Boba AVAX L2, Evoverses’ will be joining with their 3D PvP gameplay, powered by the Unreal Engine 5 [and] Hybrid Compute to help the game scale and reach its full potential.
L2 projects like Boba Network have been partnering with a great deal of industry heavyweights and blockchain networks in recent times. Opensea recently detailed the leading NFT marketplace has added Arbitrum support and the NFT market competitor Rarible revealed Immutable X support. Arbitrum, Immutable X, and Boba Network are all L2 projects and other competitors include Loopring, Zksync, Optimism, Metis, Polygon Hermez, and Aztec.
What do you think about Boba Network adding Avalanche support? Let us know what you think about this subject in the comments section below.
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
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