Thread · 5 tweets · 16 Mar 2022

Currency is infrastructure. In order to operate properly, infrastructure needs an institutional arrangement attached to it in order to ensure the stability of its provision, enforce rules about how it can and can't be used, etc.

Using a state (or suprastate) as that institution isn't arbitrary: states are large enough to make decisions that usefully affect a currency and have very real ways of enforcing rules. There are other currencies though, with more limited scope, like Starbucks points!

I think the useful question here is: do state institutions provide better or worse support for currencies than blockchain systems? I think a lot of the future of cryptocurrencies is predicated on having a good and honest answer to this.

The USD is backed by military might and oil. That's not great! But it's also attached to (insufficient) transparency mechanisms that afford some democratic control over it and prevent some bad uses. These things should not be discounted.

There's a lot of promise in crypto that we can get better governance, I presume including of currency, there. That's an interesting idea. But so far I've seen nothing that brings solid proof and doesn't come with significant downsides or unsolved problems!