Bitcoin has spurred a renaissance of thought on the question of “what is money?” Bitcoin is often linked to the Austrian school of economics without much thought as to why, but pondering this question allows for the most thoughtful justification: money is an emergent order and understanding its operation depends on appreciating irreducible uncertainty, subjective value and methodological individualism.
So far, so simple – and so seemingly axiomatic. But if you are reading this you are most likely interested in Bitcoin, and if you have been kind enough to invest in Axiom Venture Fund I then you most certainly believe that we are still early. And so, I put it to the reader that this – or, perhaps, the consequences of this – is not at all widely understood.
I suggest we attempt to invert this understanding of liquidity. Instead of trying to capture how easily and quickly we can convert capital into money, what if what we meant was how easily and quickly we can convert money into capital?different because it forces us to think about what it is we really want; what we want is wealth. We want more things, cheaper things and new things. And we want the comfort and security of knowing we will be able to produce these things far into the future.
And how do the characteristics of money, as the salable representation of that time, influence your decision? I sincerely believe that this is the killer app for Bitcoin: pricing capital. If there were ever a time to say that*Note, by the way, that a tautology cannot be an axiom, as it trivially implies all and only every other tautology as its theorems. Add one tautology to your axioms and you may as well add them all. Nothing is changed, and likely nothing is understood, either.
Real capital is scarce – precious, even. It is, after all, accumulated time. if it is going towards something stupid and short-termist, then it isn’t going towards anything intelligent and long-termist. If the money we use to decide how to allocate capital does not reflect this scarcity, we will think there is no cost to short-termism. The incentive here is not wealth, it’s just profit. It is not a stock, it’s just a flow.
This means that at a personal level, you are incentivized to develop skills as specific as possible, crystallize the value of these skills by creating capital as heterogeneous and illiquid as possible, and spend as much time as possible thinking about deepening these skills and crystallizing this value.