The brutal game theory of money.
Ideas to take with you.
- 01
Fiat money structures the world as a prisoner's dilemma where individual rational action – levering up, positioning close to the printer, pandering politically – produces collectively worse outcomes than coordinated restraint would.
- 02
The decisive feature of any prisoner's dilemma is the absence of credible cooperation enforcement; a decentralized monetary network whose rules are validated by thousands of nodes is the first structural answer to that problem at scale.
- 03
Bitcoin changes nothing about greed, status competition, or self-interest – it only changes the payoff matrix, making cooperation the more rational individual move as awareness spreads.
- 04
Attempts to suppress the new game tend to weaponize fiat incentives in its favor: bans shift activity to defecting actors, and coordinated bans are unstable because the coordinating parties cannot trust each other not to defect.
- 05
Defection inside the new game – altcoins, contested rule changes, financial-engineering wrappers – tends to lose value in Bitcoin terms over time, even when it gains in fiat terms in the short run.
