Satoshi Notebook | Bitcoin: The Great Demonetization

Bitcoin: The Great Demonetization

Bitcoin will become the world's primary monetary index by absorbing the monetary premium from utility assets, allowing them to return to their natural purpose.

The Great Absorption

As Bitcoin emerges as the superior store of value, it will naturally absorb the monetary premium currently trapped in other assets. This isn't just about price appreciation - it's about allowing the entire economy to function more naturally.

                        Just as the S&P 500 became the world's primary equity index, Bitcoin will become the world's monetary index - the purest expression of stored value.
                    

The Demonetization Cascade

This absorption will occur in stages, as Bitcoin demonetizes various assets:

                        1. First, inferior monetary assets (gold, bonds)

                        2. Then, artificially monetized property (real estate)

                        3. Next, inflated equities (stock market)

                        4. Finally, other stores of value (art, collectibles)

                        Each stage releases these assets back to their utility function

The Housing Revolution

The impact on real estate will be revolutionary. As Bitcoin absorbs the monetary premium from housing, we'll see:

                        • Housing returning to actual shelter value

                        • Investment firms releasing hoarded properties

                        • Young families able to afford homes again

                        • Property developing based on real demand

                        • End of the "housing as investment" paradigm

The Equity Liberation

Company stocks will return to representing actual business value rather than inflation hedges:

                        • P/E ratios will normalize

                        • Companies focus on productivity, not financial engineering

                        • Stock prices reflect business fundamentals

                        • Investment based on value creation, not monetary preservation

                        • End of the everything bubble

The Resource Optimization

As Bitcoin absorbs monetary premium, resources will be allocated more efficiently:

                        • Farmland returns to farming

                        • Commercial real estate finds true market value

                        • Art returns to cultural significance

                        • Commodities price on utility, not speculation

                        • Capital flows to productive uses

The New Paradigm

This great demonetization will create a cleaner separation between:

                        • Store of Value: Bitcoin

                        • Utility Assets: Priced on actual use value

                        • Productive Capital: Focused on value creation

                        • Human Progress: Visible in falling real prices

The Economic Clarity

With Bitcoin as the world's monetary index, we'll finally achieve clear price signals across the economy. Value will flow naturally, resources will be used optimally, and human progress will be properly reflected in falling real prices of goods and services.

This isn't just an investment thesis - it's the path to a more functional, efficient, and equitable economic system.