Q: In the following video, Michael Saylor said “Everything you learned about economics and about money in your entire life was pseudoscience – you know – superstitious. And you can’t blame the economist because we never discovered perfect money. Bitcoin is the first time that we actually discovered a thermodynamically sound, mathematically sound, economically sound protocol in the history of the world.”. Discuss
A: That’s a powerful and provocative statement by Saylor, and it reveals a lot about his worldview. Let’s break it down.
🚫 “Everything you learned about economics and money in your entire life was pseudoscience—superstitious.”
Saylor is essentially arguing that traditional economic models are built on flawed or inconsistent foundations. His use of the term pseudoscience implies that much of what we accept as economic theory is not based on immutable or scientific principles, but rather on assumptions, approximations, and policies influenced by human intervention (central banks, governments, etc.).
By calling it superstitious, he suggests that faith in fiat currencies and the institutions behind them is akin to believing in myths—because fiat money has no inherent value. Its value relies entirely on collective belief and the actions of central authorities, which are prone to manipulation (printing money, adjusting interest rates, etc.).
⚙️ “You can’t blame the economist because we never discovered perfect money.”
Here, Saylor seems to give traditional economists some leeway. His point is that they’ve been working with imperfect tools—namely, fiat currencies with variable supply, prone to inflation and manipulation. In his view, economic theories built around such flawed instruments will inevitably be flawed themselves. Without a stable, fixed, and verifiable form of money, economists were working with incomplete or inconsistent data.
🔥 “Bitcoin is the first time that we actually discovered a thermodynamically sound, mathematically sound, economically sound protocol in the history of the world.”
This is the core of Saylor’s thesis. He sees Bitcoin not just as a new form of money, but as a scientific breakthrough. Let’s unpack the terms he uses:
- Thermodynamically sound: This refers to the proof-of-work consensus mechanism, which requires real-world energy expenditure (computational power) to create and verify new blocks. Saylor views this as a form of financial physics, where energy and value are directly linked, making Bitcoin resistant to arbitrary creation (unlike fiat printing).
- Mathematically sound: The fixed supply of 21 million BTC and the predictable issuance rate (halving every four years) make Bitcoin mathematically reliable. The protocol is open-source, verifiable, and governed by immutable code, making it far more predictable than inflationary fiat systems.
- Economically sound: Since Bitcoin cannot be inflated or controlled by a central authority, Saylor argues that it offers a form of money that behaves according to the principles of scarcity and supply-and-demand without distortion from interventionist policies. This, he claims, makes it a superior economic protocol.
💡 Discussion Points
- Is fiat money actually pseudoscience?
- While fiat currencies rely on trust and central authority, they are still governed by economic principles. However, Saylor seems to argue that fiat-based economics is like trying to conduct science with faulty instruments—hence his claim of pseudoscience. Is he right, or does fiat currency still have legitimate scientific underpinnings?
- Bitcoin as thermodynamically sound money:
- Saylor’s emphasis on Bitcoin being tied to real-world energy expenditure draws parallels to the gold standard, which also required effort to mine. However, critics argue that proof-of-work is energy-inefficient and unsustainable. Is the energy link truly a feature of sound money, or a flaw?
- Bitcoin as a mathematical revolution:
- Saylor’s claim of mathematical soundness hinges on Bitcoin’s fixed supply and transparent issuance. While this provides predictability, it could also create inflexibility, making Bitcoin prone to deflationary spirals. Is mathematical predictability inherently better for money, or does it come with trade-offs?
🔥 What do you think? Is Saylor onto something with his claim that traditional economics is a form of superstition, or is he oversimplifying a complex system?
Video:
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