On Risk

If it is to succeed, the Right needs to take Risks. Not retarded risks, like dressing up as Hitler for your office Christmas party, thereby nuking your social capital from orbit – we live in a Progressive reality simulation, and performative compliance has a certain camouflage value – but productive risks, like converging on a spontaneously coordinated Schelling point for capital investment. Ideally, one with the capacity for parabolic growth.

And we just missed a big one – the big one.

Bitcoin.

Successful investment in a possible future is an evocation of that future – a fork in the Real. Experiential (i.e. lived) reality goes one way, or another. It is a form of demonic summoning, which actualises belief via the cybernetics of hyprerstitional praxis.

Bitcoin is a Black Swan event. But from our unique spatio-temporal position within the Sphere, we could see it coming over the horizon – like a marauding crypto-digital-army, with the potential to destroy fiat money, the printing press and centralisation.

It threatens to do so by constructing an alternative to the current system – the system we collectively oppose. The innovation of a post-libertarian, cypherpunk genius, Bitcoin was the perfect Schelling point upon which the technomic Right – at least – should have coordinated investment to invoke a fork in the Real.

Right now, the Right needs to find patrons. We could have been our own patrons.

Progressivism is the UX through which we collectively experience “reality” and simultaneously occlude the Real. It is an ideological-perceptual layer or filter, which is superimposed on top of reality and mediates our experience of it. This is true of all higher-order cognitive constructs, but not all of them have fallen out of sync / into conflict with underling reality to the same extent as progressivism.

Progressivism, properly understood, is the denial of underlying reality in an attempt to break free from its gravitational field. It is a Neoreligious programme to extricate humanity from the Real. It revolves around disbelief in the Real via enforced belief in progressivism, and its capacity to destroy / invert historical compound knowledge, aka tradition.

However, since the Real can be occluded but never abolished, progressivism has transmuted into a pure ideological mechanism for the maintenance of Power. It realises this function via the coercive enforcement of systemic patterns of belief and disbelief – all in the service / interests of Power.

Perversely, Bitcoin – a digital crypto-currency – promises a return to the Real.

Of course, for many within the Sphere, one thing which didn’t encourage risk-taking, was the fact that initial exposure to a sustained critique of Bitcoin’s potential was couched in terms of its inevitable failure.

Across a series of posts, Moldbug’s analysis of the incentive structures at play was perfect, but his conclusion that Bitcoin was doomed was – with the benefit of hindsight – dead wrong.

Subsequently, in private, he has recognised that you just need to “jump onto” opportunities which have the capacity for exponential growth, irrespective of the odds.

But reading at the time, how confident could you be that Moldbug’s conclusion the USG would kill Bitcoin was correct: 100% confident? 99% confident? 75% confident? 50% confident…

Buller? Buller? Buller…

Let’s revisit one of these posts and see if our confidence was misplaced. In order to adduce whether investment – or at least some degree of exposure to what was effectively an open-ended lottery ticket to a potential phase of geoeconomic transition – would, indeed, have been prudent.

Moldbug begins ‘Bitcoin is money, Bitcoin is bubble’ by compounding the concepts of ‘money’ and ‘bubble’:

If Bitcoin is money, Bitcoin at $150 is absurdly cheap.  Otherwise, it is hilariously expensive.  Bitcoin will go to zero or infinity – almost certainly the former.

When I say that Bitcoin is money and Bitcoin is a bubble, your mind grows nervous, as if forced to contemplate a car that is orange and green.  Sure, it’s all waves and particles at the bottom – but, really.  Physics is one thing, accounting is another.

He goes on to point out that Bitcoin is a protocol standard, and that in our era everyone knows how protocol standards play out – winner takes all.

This is a consequence of the effects of scalability on socio-economic relations, and because we have transitioned from the domain of the Mediocristan (i.e. the predicable) to the Extremistan (i.e. the unpredictable) and entered an epoch in which butterfly wings create tornadoes.

Another of Moldbug’s key insights, is that there is no essential relation binding the medium of saving to the medium of exchange:

Indeed, it is logically possible to imagine an economy in which the medium of saving and the medium of exchange are different assets, and the medium of saving is overvalued but the medium of exchange is not.

But what about the dollar…?

The dollar is already the global monetary standard – what creates any incentive to switch to Bitcoin?  If the dollar was financially perfect, there would be no such incentive.  The dollar is anything but financially perfect.

And now we proceed to the dark heart of Moldbug’s analysis, which should have made anyone reading – including the author – invest in a possible future, which could be actualised via the magnetic power of Bitcoin as a Shelling point to cohere upon a post-fiat world order:

Suppose Bitcoin is money?  At this point, I can guarantee it.  Either USG will kill Bitcoin, which it can and probably will, or Bitcoin will be the new monetary standard…

In a world in which the entire pool of savings energy has moved to Bitcoin, what is a dollar worth?  On the one hand, enormous dollar debts exist.  On the other hand, those debts themselves must be valued as securities in Bitcoin.  As the BTC price increases into the millions, the purchasing power to pay off all the dollar debts – simply by cashing in a few Bitcoins – appears with it.  There are no significant Bitcoin debts, and nor will there be any until the transition has completed.

This is a scenario in which no one wants to hold either dollars, or dollar-denominated debts, because the purchasing power of these assets in Bitcoin is constantly decreasing… The dollar is now the bubble, and devil take the hindmost.  The savings pool evacuates this bubble, but it does not evacuate evenly or all at once.  Rather, those who get out first […] become much wealthier than they were before.  Those who get out last, however, can see a fortune shrink to a pittance.  This is classic hyperinflation.  A currency never hyperinflates by itself – it always hyperinflates relative to some other medium of saving.  There is always a savings pool, and always an overvalued asset.

This is, in fact, the situation we could be rapidly approaching…

Or not.

But if we are – the devil take the hindmost.

There may still be time / opportunity to utilise this moment, and catalyse the outer Right to become a financially self-sufficient, post-political entity.

But if it is to do so the Right needs to embrace Risk.

Cold calculated Risk.

In which the prize is a seat at the table of the future.

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5 thoughts on “On Risk

  1. I don’t see that much has changed since Moldbug wrote about Bitcoin. The same two outcomes still remain. It’s still either ultimately useless and infinitely overvalued, or it’s massively undervalued. Sure, you won’t be rewarded as much as the people who were mining in 2011, but neither was the prognosis as positive then as it is today.

    Most normies worldwide have still never even heard of bitcoin, let alone mined/purchased/hodled any. It’s early days, and BTC represents only a tiny sliver of global wealth. If you get in now, there are still astronomical gains to be had if the project is successful long term.

    If you think BTC will be worth $1m+ some day, buying it for $16k now is still a pretty freaking good deal. If you can’t afford a full coin, that’s ok, because $100 put into BTC will still be worth more than $100 put into any other asset (assuming the moon scenario).

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  2. I agree. The only thing that has substantitively changed is the amount of capital one (or a group) would need to invest to reap – potential – astronomical gains. Throwing in $10,000 and getting 1,000 BTC was a lot easier (and potentially more game-changing for NRx) than throwing in $100,000 and getting 10 BTC. But that’s the nature of exponential growth – when you miss out you miss out exponentially.

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  3. How Bitcoin (could) die:

    Carrot and stick. Carrot is to have a government controlled electronic currency system (throw in lots of sweets – sweet carrots – for early adopters). Stick…. Well, there is so much you could do here. Let’s assume that the goal is to drive the value down to zero – scare the chickens all the way into the pot. So, compile a list of the…what? 10 richest bitcoin holders? 50? 100? Indictments. If they are in the U.S, then arrest them, try them and put them in super-max (solitary) for 30 years. (However, they can make nice by switching over to the government approved currency).

    If they are outside America, then they may still be in the other Anglo states, or states that have extradition treaties. Bring them to book. If they flee, then set a price on their heads and launch private contractors after them. Go after their families, friends and associates – seize their assets, lock em up, find whatever other crimes you can charge them with. Again, everyone can “make out” if they switch over to the government approved currency.

    If anyone tries to get cute and fight back (what with all their wealth), then escalate the sticks and target them for death. Again, launch private contractors to take them out. Panic and Fear. Fear and Panic. Drive the value down to zero. But again, you are reasonable, all they have to do is to switch over and pay a nice fee for doing so. If they flee to Russia or China or whatever, then you could make deals with these countries. It only takes one. Go after the richest or the one who squawks on TV. Make an example out of them. Even if you have to pay a hefty cost to do this, if the value of not taking down bitcoin is greater then you do whatever it takes. You will need to come up with a formula for your actions. Moldbug said drugs/money laundering. That could work. But you could also use terrorism and maybe even link it to child rape and sexual assault (given the current year). With everything else going on, the general public will not care if some rich dudes (who are child molesters) or a bunch of nerds are going to Leavenworth for crimes against national security. Again, always given them an out. Carrot and stick.

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  4. Bitcoin could still be killed, true.

    Ergo heavily investing in BTC is still a Risk. But not having any exposure to BTC / crypto is also a Risk.

    At the moment, it’s unclear which is the greater Risk. Parallax Optics would therefore advocate a strategy similar to Taleb’s “barbell” – offset high levels of Risk with high levels of caution / conservatism.

    So, you invest in BTC / crypto but also relatively safe / complementary proven stores of value, such as property or gold. People misunderstand the relationship of BTC to gold and see it as hostile, but in fact it is complementary. On the one hand, BTC paves the way for a neo-gold rush – once fiat has been exposed as the bubble. On the other hand, if BTC is killed and made to look like it was a bubble, then gold is still a relatively safe store of value.

    Also, the longer BTC / crypto exists the harder it is for the USG to “kill” it. The USG is not a single entity / centralised authority, but a competing network of nodes of Power. As Putin has put it, the USG is “non-agreement capable” on geopolitical policy implementation. The same may also be true for the suppression / regulation of BTC / crypto once a sufficient percentage of the elite / power / institutions have a stake in it. Furthermore, if the financial incentives reach such a point where defecting from the USG’s will is undeniably the best option for other countries then the USG will need to reflect on its international strategy. It may be cheeper just to buy a large stake in BTC / crypto now to control this space.

    Ultimately, things are in flux, and with flux comes opportunity.

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