How Bitcoin Fixes Corporate Greed
A quick rant on why Bitcoin keeps goods and service producers honest and creates a more prosperous world.
“Bitcoin fixes this” is a pretty famous saying at this point, and often thrown in the face of just about anything bad in the world by Bitcoiners. I’m going to quickly apply it to companies in a free market producing goods and services, and how Bitcoin keeps them honest.
In a free market, when you’re purchasing something, you’re going to buy the best combination of low price and high quality you can based on your price and quality tolerance levels for what it is that you’re purchasing.
When you pay someone in dollars (and just for simplicity, let’s say we’re living in a low inflation environment), there is an opportunity cost associated with using that money today, vs saving that money and using it for something else of equal value later. The opportunity cost here is somewhat symmetric.
Bitcoin introduces an asymmetric opportunity cost. Do I purchase something now, or do I save it and purchase something 5 times more valuable in the future.
What this does is also tell you that the TV or the haircut that you’re willing to purchase today (and forgo the increased future value) had better be incredibly useful or efficient, or hold its value pretty damn well, or be selling for a massive discount. So now the combination of low price and high quality is amplified. Your tolerance levels have shifted to extremely low price and extremely high quality.
The side effect of this new dynamic is that all producers creating low-quality, inefficient products, or companies that overprice their products, will inevitably be forced out of the market. This increases the demand for innovation and production of only the most useful, efficient, high-value goods and services.
Normally companies have to convince individuals of the value of their products, but now they have to go the extra mile and convince them that also their future forgone value will be put to good use.
And this makes sense. If I am getting a haircut and paying in Bitcoin, knowing that the hair stylist receiving this Bitcoin is going to reap the benefits of that asymmetric opportunity cost in the future, then I’d want that Bitcoin to go to someone who A: is going to give me a pretty damn good haircut, B: someone who isn’t going to rip me off, and very importantly C: someone whose future I believe in, and want to see succeed and grow, because I’d like to continue getting good or even better haircuts from them in the future.
In a world where people only purchase, innovate on, and produce the best, most efficient, most value retaining, longest-lasting, goods and services. The quality of life of all individuals trends upward.
Thanks for taking the time to read. Thinking about hyperbitcoinized societies is like thinking about futures from classic science fiction (and I love sci-fi). Except that future is very well upon us soon, and that’s exciting. I plan to continue writing about what life would be like if Bitcoin were money because Bitcoin does change the way you think when you root it into your ideas.