Money is for strangers

At a farmers’ market in a warm country, a vendor takes my coins and is plainly pleased. A foreigner has overpaid in the way foreigners do, and within the hour those coins will be dollars again, and the dollars will be lunch. No new money has taken root in his town. His pleasure has a simpler source: the coin can be turned back into the old money before the day is out, and turned into something he actually wants. That instant exit is the tell. Where money has arrived, nobody is in a hurry to leave it. What the conferences and the books and the podcasts had agreed to call adoption was, at that stall, a tourist subsidy dressed as a monetary fact. And I felt the particular embarrassment of recognising my own side in the act of congratulating itself.

I have watched Bitcoin since 2009, never as a missionary, and occasionally a sceptic. My early doubt had a precise source: I took Bitcoin for the money experiment of “libertarians” and “Austrians” (two words that in America have collapsed into one), and an idea confined to an ideology rarely grows into money for the people outside it. I have served, if anything, as a fairly reliable contrary signal. At the top of a bull market I am asked to explain, in good Austrian fashion, why the thing is sound; at the bottom the same friends finally want to hear what is wrong with it. So I have learned to distrust my timing. There is already too much “Bitcoin education,” and that is not what this is.

Let me name the thing plainly, because it is the disease beneath the symptoms. Almost the entire literature of Bitcoin (the books, the podcasts, the stages, the threads) is written in a single register, and that register is self-congratulation. The reader is told that he is early, sovereign, on the right side of history; the author is told the same by his podcast guests, who are his blurbers, who are his fellow panellists. A closed loop of affirmation has formed around an asset whose price, for a while, vindicated everyone standing inside it. This is the worst available posture for a thing that hopes one day to be money, because money is the one human institution that owes nothing to our good opinion of ourselves. It is the residue of countless strangers coordinating without consulting one another, often without trusting one another. A currency that needs its holders to feel righteous has already failed the only test that counts.

Which is the whole point of the title, and it is older than Bitcoin by several thousand years. Money is for strangers. It is for the supplier across a border you will never meet, the man who has no reason to take your word and every reason to demand something neutral in its place. Among friends one barters, lends, forgives; the family table keeps no ledger. Coin enters precisely where affection runs out. The old formula puts it more sharply still: money is for enemies. Bitcoin, by this lineage, ought to have been the purest case yet: a money for people who do not yet dare to deal with one another, indifferent to anyone’s tribe, asking no one’s permission. As a slogan, the line holds. What the last cycle actually built was a money for friends: for the conference, the tribe, the already-convinced, who priced one another’s loyalty and called the result adoption.

Beneath the self-congratulation sits an older and more respectable error: utopian thinking. The original Austrian school, the Viennese one before its American exile, defined itself against idealism in the philosophical sense, against the conviction that the world is a problem to be solved completely, and that the right idea, believed hard enough, will dissolve the friction of reality. Utopia is the promise to fix everything at once. It arrives in two recurring shapes: a change in human nature, or a clean division of the world into the pure and the corrupt. Bitcoin against Fiat slots neatly into the second: a world halved into the sound and the debased, with ourselves, of course, on the right side of the line. That framing feels like clarity, and it is what licenses everything that follows.

What follows splits into two failure modes that are easy to mistake for each other: the LARP and the grift. The LARP is the cargo cult, the state of living inside the certainty of salvation, behaving as though redemption had been delivered and only the bookkeeping remained. In the bull market of a thoroughly materialist age, Bitcoin can feel like a panacea, because Number Go Up seems to release its holder from economics itself. Productivity, uncertainty, the patient bearing of risk: all of it suddenly looks optional. One may finally hunt in the morning, fish in the afternoon and criticise after dinner, exactly as Marx promised the residents of his fully automated paradise. The LARPer is sincere. He has simply mistaken a rising chart for the abolition of scarcity.

The grift is the cynical twin. It takes the same expectation of redemption and farms it: the affinity scam, the saviour pose, the man selling himself as an accelerant of the inevitable. The grifter does not believe; he lives off the belief of those who do. The space has its own crude shorthand for the pair, plebs and suitcoiners, and the quiet cruelty of the arrangement is that the second feeds on the first.

The two are not merely confused for one another; they are the poles of a single field, and each is cultivated as the antidote to the other. Against the grifter the pleb holds up his purity: incorruptible, holding his own keys, beholden to nobody, the clean conscience of the network. Against the pleb the suitcoiner holds up his reach: the man of influence, capital and access, the one who actually moves things. Both antidotes are useless, and both are self-righteous. It is no achievement to be a pleb, and an identity that rests on no achievement defends itself by belittling ambition, envious of anyone who dares to reach. Yet to court the existing structures in order to turn them is the opposite error, and no smaller one: the man who ingratiates himself with the structures in order to change them is, in the end, changed by them far more than he changes them.

Most of what gets celebrated as a “circular economy” is LARP, though the instinct behind it is honest enough to deserve a precise objection. Picture the engineer who decides the modern world is financialised, poisoned and corrupt, gives up his profession, and starts a podcast to spread the good news: the thousandth Bitcoin podcast, the hundredth Bitcoin book. The impulse is honest, but the economics behind it are confused. Recall that market. Bitcoin Beach in El Zonte began as the genuine, long-horizon work of one committed man, and that is no one’s idea of a LARP. But a population with no savings, preached into accepting a coin it cashes out by sundown, is not adopting money; it is providing a backdrop. There is still some charm in outsiders bringing a place their attention and their cash. The charm curdles the moment it asks to be mistaken for a monetary revolution.

The error underneath is older than Bitcoin. A small local money circle spans far too little division of labour to make anyone richer. When a man who was productive in the West takes to whittling trinkets for sats at a market stall, the romance hides a steep fall in real wealth. Wealth is not everything; an ascetic life has its own dignity, and to live self-sufficiently can be beautiful. But money exists to widen the division of labour and the productivity that rides on it. To dress up a retreat from both is to misunderstand what it is for. A return to subsistence and barter needs no money at all, and the autarky projects that actually survive tend to make their living from the seminars rather than the soil: from visitors, from selling the idea onward. The goal of real self-sufficiency deserves respect when it is real. It can also be a LARP, in the exact way that gardening in the West becomes a LARP the moment the gardener forgets it is an expensive and lovely hobby. Gardening is among the most beautiful things a person can do. To sell it as an economic alternative capable of feeding a family is naïve, and it sits one short step from utopia. What looks like the simpler life is in truth subsidised by the very division of labour it pretends to have left.

Bitcoin’s true contribution lies in the opposite direction from the circle. It is in payments across borders, which knit together divisions of labour and exchanges of knowledge that no village loop could reach. Where local use draws in more Bitcoiners, the network does grow, though in a consumption-bound way, through tourism and consumer goods. That is the thinnest slice of any economy, and the slice that sits at the high-time-preference end of it. Real capital formation happens elsewhere: in economies of scale, in genuinely new goods and the capital goods that make them, in ever more elaborate combinations of finely divided steps. At that point nothing is circular any longer. The economy stops turning in place and begins to grow, by deploying capital better rather than by spending differently.

The grift has a root of its own, and it is the short time horizon of the age. It shows up as impatience: the conviction that change must mean persuading large numbers somewhere, that nothing is real until attention has blessed it. The hunger is human and very old; we are built to care what others make of what we do. So we sort ourselves into confirming bubbles, or we set out to manufacture network effects of attention, until attention becomes the chief instrument and, in the end, an end in itself. This is the influencer economy, now visible in every field, and Bitcoin is no exception to it. It betrays, if anything, a high time preference wearing the vocabulary of a low one: the whole space keeps its eyes on the people who farm attention.

The bear market exposes the attention economy as something close to a zero-sum game, set against the positive-sum games where real things get built, and so it breeds the conflicts that any human community breeds. Those closest to one another grow the most bitter, though money of all things should bind them. The more utopian, and therefore political, the perception of Bitcoin becomes, the less it works as money and the more it works as politics, which divides.

The last bull market was steered, sadly, by exactly this politics: by impatient hope for state adoption, for mass attention, for inflows of money. The frustration of the early Bitcoiners is understandable, and still it is not quite right, because every further wave of adoption must frustrate the early. Broader use means more average users; the average newcomer is, by definition, more average. The internet went the same way. Set the utopian dreams of its first years beside what it became, and the contrast is sobering. The very disappointment makes it easy to forget how immense the surviving value of these protocols still is. Bitcoin is not refuted by the embrace of attention-hungry politicians and money-hungry intermediaries, any more than the internet was refuted by spam.

On the cycle itself, though, the honest verdict is uncomfortable: too much distraction, too little built to last. Too much attention and money flowed into a stupid, self-perpetuating narrative, and the attention was allocated almost exactly wrong. The real Bitcoin treasury companies, the many small firms that have actually woven the asset into productive work, went largely uncelebrated, while the applause went to the public treasury companies and those who had hitched themselves to their story. I hold nothing against entrepreneurial experiment; I worked through the public-treasury-company question myself, and for a time I had a hand in it. Where there seems to be enormous demand for something, an entrepreneur is obliged to take an interest. At the outset there were even arguments, such as tax arbitrage and the prospect of real financial innovation, but little of substance arrived, and the supposed innovations turned out to differ hardly at all from the ordinary machinery of finance. So Bitcoin now sits, quite deservedly, in the disrepute it earned.

Bitcoin will outlive this too. Bitcoin does not need the Bitcoiners; the Bitcoiners need Bitcoin. I do not deny that one meets remarkable people through it, or that the slow, small-scale growth of sincere conviction is good for both the network and the asset. Bitcoin conferences, in bull and bear alike, can be a real pleasure, because now and then they hold two rare things in one room: structural criticism and optimism. The hunger for attention is what corrodes them.

There is, then, far too much Bitcoin education. Most people, having passed through schooling systems, take education to mean the transmission of a truth that must bring about an instant, life-altering change the moment it is seen: a fundamentally religious posture toward truth. Real education is a process of development, an unfolding, irreducibly subjective. It has everything to do with insight, and insight is far more uncomfortable than the enthusiasts assume: it grows in doubt, out of good questions, not out of finished answers. The thinned, flattened version of the Austrian school that travels around Bitcoin is of little use, and it turns dangerous when it feeds the utopian frame. Insight has to help us see reality more clearly, whether or not we like what we see. The question is always what is actually the case, and what that means for me; it is a subjective wrestling with uncomfortable facts, never a comfortable retreat into an ideal world of one’s own imagining. To live inside the theory can itself be the purest LARP.

None of which diminishes the worth of introducing others to a hard subject from many sides. But that work succeeds where one already holds trust and stands as an example. That is exactly why it is a mistake to abandon one’s own ties, one’s own life, one’s own ground in order to broadcast platitudes to an abstract public. Example outranks instruction, and the strongest example is simply doing the thing better; knowing better was never the scarce part. It shows itself only in results. Promises are what the new media reward and multiply. A real track record is earned the hard way, in a place where one can be wrong while feeling entirely certain; the most intelligent are not exempt, for a man can see the deepest truth and still be too early, or in the wrong context. Success cannot be willed into being by holding correct ideas. Execution, a tolerance for frustration and a stubborn groundedness matter far more to the work of doing things better. The craving for mass attention is human, and it is corrosive, because it pulls energy away from the only thing that counts in the end.

Talk is cheap, and I am talking, so let me be concrete. There are not many projects that plausibly show Bitcoin helping real people over the long run. There are some. But most of the economically viable offerings around it are self-referential: the buying and selling of Bitcoin, custody, keys, wallets, seed storage. The largest and most overlapping category of all is merch, which is itself the tell that for many this is, above everything, a question of identity. Nearly every physical product on a conference floor is Bitcoin merch, ordinary goods that acquire a logo or an allusion and are thereby “upgraded.” That is marketing at the edge of grift, and it is self-congratulation you can hold in your hand. Bitcoin books are merch when they are bought mainly by Bitcoiners, which is true of most of them, and the same goes for much of the hardware. Even Bitcoin art is still, for the most part, merch, a set of niche identity markers and collectibles for the tribe. There is nothing shameful in any of it. It is real economic activity, and for a sole trader it is honest, decent work to stand behind a stall and sell something one has made, which is a far greater contribution than talking, including the talking done on YouTube. But real economic force comes from larger, more capital-intensive undertakings: from innovative goods, new methods of production, new answers to problems that many people actually have. Anything that wants to be money has to bear on that world. Failing which, it stays the collectible token of a barter circle: charming, a hundredfold more honourable than any money imposed by force, yet sold far below its worth, until one day the price catches up to that fact.

A pile of economic errors underlies all this, which is startling, given how many take the Austrian tradition to be the very justification for Bitcoin. I will grant the strongest version of their case: Bitcoin is today the principal reason anyone discovers the Austrian school at all. Most of the people now picking up the books and asking the questions arrived through it. But that is exactly what should give us pause. If the tradition supposedly underneath all this is taken up so flatly, and the curiosity about its actual origins runs so thin, then something is rotten. Part of the explanation is that the Austrian school survived in America, and its American keepers earned real gratitude: they kept the economic core of the tradition from dying out. But in exile it was also ideologised, and cut off from the interdisciplinary, realist Europe it came from. The contrast could hardly be sharper. On one side, the Privatseminar that Mises kept in interwar Vienna, a circle of economists, entrepreneurs, bankers, historians and the occasional novelist who argued past midnight and remained friends by morning. On the other, the hostile squabble over ideological trivia that dominates the flattened Austrianism of today. The educational compulsion, the missionary zeal, the thirst for mass attention and the endless rewarding of attention with more attention: those self-reinforcing scale effects do nothing for prosperity, since they are not positive-sum, and all of it belongs far more to the lineage of idealism, of German Idealism, against which the Austrian school once set itself.

Bitcoin will reach its potential again only when, in a phase exactly like this one, it shakes off that borrowed idealism and lets itself be grounded. The corrections deserve welcome rather than mere endurance: they clear room for the people who are actually building, which is the truth hidden in the worn line that the bear market is when the building gets done. What Bitcoin needs is realism, and entrepreneurs willing to shoulder uncertainty instead of abolishing it by decree and false promise. The idealism that pays in recognition now exacts its price later, in flight from the world. The asset has to be led back, again and again, to its economic origins. Rightly so, for otherwise its mere growth would mean nothing.

The world does not need one more digital asset whose price goes up. The world needs a neutral, uncensorable protocol for communicating value across borders and across time. That, in the end, is what makes hoarding worth defending: the point the other economic traditions, fixated on spending, keep missing. Hoarding is never an end in itself. It is the shape that saving takes, the way we economise across time; it is never the last step. We hoard to turn income into wealth, so that wealth can later become income again. We hoard to acquire the capital goods that entrepreneurship deploys. We hoard to be able to help others, to let a family flourish, to make the world a little better: moving value from where it is needed less to where and when it does more. Its yield shows as productivity that did not exist before, as new ties to other people, as ventures that had to be built, not as Number Go Up. It is the way out of self-reference and short-termism, away from the pure relation of the ego with itself, into an active relation with the world. Good money should make that possible. Bad money is a distraction, and it is full of distractions, and it breeds more of them. My hope for this bear market is a small one: that it shakes loose as many distractions as it can, quiets the noise, and leaves a little more signal standing when it ends.