_Good Morning_ ☕ 📖 🌞 `Custodial Risk Principle` - **Contract as Claim**: A contract representing an asset is a claim against its custodian, often termed as a security. - **Value of Security**: The value is the underlying asset's value minus costs of exchange and enforcement. - **Custodial Risk**: Central to any money system; reliability of the custodian limits money's usefulness. - **State Money**: The state acts as the single custodian, with potential for default through reserve liquidation or fraud. - **Bitcoin's Non-Custodial Nature**: Bitcoin's value is based on its trade utility; if no merchant accepts it, it's not useful. Merchants collectively act as custodians. - **Merchant Role**: Merchants exchange their property for Bitcoin, not securitizing it. They can stop accepting Bitcoin, reducing its utility, but this isn't a default as there's no obligation. - **Economy Size**: Bitcoin reduces custodial risk through the size of its economy, not through technology or contracts. - **Blockchain and Custodial Risk**: Blockchain technology doesn't protect against custodial default; tokenized assets remain securities with inherent custodial risks. - **Insecurity of Security**: Ironically, the "security" in traditional terms is the element that introduces insecurity due to custodial risk. **Cryptoeconomics by [Erik Voskuil](https://github.com/evoskuil).** *The book can be found on [GitHub](

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Bitcoin Cross-Platform C++ Development Toolkit. Contribute to libbitcoin/libbitcoin-system development by creating an account on GitHub.

The rest of the summarized chapters are at

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_Good Morning_ ☕ 📖 🌞 `Cryptodynamic Principles` - **Cryptodynamics**: Term for Bitcoin's fundamental principles, distinguishing it from other technologies. - **Definition**: Combines cryptography with the study of forces securing Bitcoin transactions. - **Principles**: - **Human Security**: Based on economically rational human actions. - **Risk Sharing**: Distributes risk among participants. - **Energy Sinking**: Uses energy to secure against censorship. - **Power Regulating**: Balances network power. - **Interdependence**: These principles are mutually dependent for Bitcoin's security. - **Cryptodynamic Security**: Essential for a technology to be considered Bitcoin; absence disqualifies it. - **Violations**: Permissioned blockchains, pure PoS, and subsidy-reliant systems fail these principles **Cryptoeconomics by [Erik Voskuil](https://github.com/evoskuil).** *The book can be found on [GitHub](

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Bitcoin Cross-Platform C++ Development Toolkit. Contribute to libbitcoin/libbitcoin-system development by creating an account on GitHub.

The rest of the summarized chapters are at

A Blog by Expatriotic

A Blog by Expatriotic

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How do I delete my DMs with nostr or turn it off... I have DMs from an age ago and can't see how to delete... Wish I could delete the entire portion of the app or hide from view. Using @Amethyst #asknostr

_Good Morning_ ☕ 📖 🌞 `Credit Expansion Fallacy` - **Credit Expansion Fallacy**: Credit expansion occurs when credit is multiplied against money through lending, giving the appearance of inflation. It's often mistakenly attributed to banking, with a theory suggesting Bitcoin could eliminate this effect. - **Savings**: Encompasses hoarding (consumption via depreciation) and investing (lending for production), with no economic distinction between debt and equity. - **Hoarding vs. Investment**: Hoarded money is fully controlled by its owner, while lent money isn't, despite being considered savings. Both lenders and borrowers need liquidity, leading to a cycle of lending until all capital is hoarded. - **Reserves**: The term "reserve" in this context refers to the owner's hoard, not to be confused with reserve currency. Fractional reserve banking refers to the ratio of a bank’s hoard to its issued credit. - **U.S. Dollar Circulation**: M0 includes tangible and intangible currency, with M3 being M0 plus all bank account money, showing significant credit expansion. - **Credit Expansion Ratios**: The total ratio of money to credit in the U.S. is ~3.46%, with bank credit expansion at 9.0x money, and other financial instruments at 48.0x money. - **Eliminating Credit Expansion**: Would require eliminating credit, halting production. The theory that Bitcoin can eliminate credit expansion is invalid as Bitcoin can also be lent. - **Risk of Credit**: All credit carries default risk. The idea of bank credit being risk-free stems from state intervention, not banking itself. - **Money Market Fund (MMF) vs. Money Market Account (MMA)**: MMFs adjust unit prices to reflect investment losses, while MMAs absorb losses with reserves, potentially leading to bank runs if reserves are insufficient. - **Fungibility and Risk**: Bank credit isn't truly fungible due to settlement risks. Credit expansion and money substitutes will persist under free banking based on people's preferences. - **Time Preference**: Determines whether individuals hoard or invest, influencing the economic interest rate and credit availability. Infinite time preference would end all production. - **Lending in Bitcoin**: Bitcoin lending doesn't limit credit expansion; lending rates are determined by time preference, not the nature of the currency. - **Consequences of Eliminating Credit Expansion**: Equivalent to infinite time preference, leading to no capital for production or products for consumption. Legal restrictions on credit lead to alternative investment forms or cessation of production. **Cryptoeconomics by [Erik Voskuil](https://github.com/evoskuil).** *The book can be found on [GitHub](

GitHub

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Bitcoin Cross-Platform C++ Development Toolkit. Contribute to libbitcoin/libbitcoin-system development by creating an account on GitHub.

The rest of the summarized chapters are at

A Blog by Expatriotic

A Blog by Expatriotic

...