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Episode 17 stuff

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evangelism/episodes/episode_17.md
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@ -10,16 +10,17 @@ If you are reading this for first time, you might want to check [Episode 1](http
- BTC stack: 1.35916794 BTC
- € stack: 40.80 €
- Current total value in €: ??? €
- Current total value in €: 46,253.50 €
- € into BTC: 30,000 €
- Paid back to bank: 5.859,20 €
- Paid back to bank: 5,859.20 €
- Outstanding debt + interests: 38.085,13 €
- Installments to go: 104
## Charts
# TODO
[![episode-17-stack-value-vs-debt.png](https://i.postimg.cc/Z50gcJTf/episode-17-stack-value-vs-debt.png)](https://postimg.cc/G4wq3wTY)
[![episode-17-bitcoin-stack.png](https://i.postimg.cc/NfdSmKw9/episode-17-bitcoin-stack.png)](https://postimg.cc/Xpys07q4)
---
@ -43,13 +44,13 @@ Can you guess it? I'm talking about custodians.
They come in many different shapes and sizes. Some of them are exchanges (Coinbase, Kraken, Binance). Some of them are wallets (Wallet of Satoshi, Blink, LightningTipBot). Some are managed by massive, regulated entities based in countries with sophisticated legal systems. Some are being run on a crappy Raspberry Pi stored in the broom closet of some cypherpunk PhD student. But they generally have one thing in common: given that they are just systems of IOUs, if both Alice and Bob have an account with the same custodian, they can transfer Bitcoin to each other instantly and without fees. As more people join the custodian, more transactions can be done easily. It scales like a charm.
Some people have just read the previous paragraph and are already cracking their knuckles, ready to point out that that's not really transferring Bitcoin, strictly speaking. And that Alice and Bitcoin don't even really own any Bitcoin at the custodian. Not your keys, not your coins, right?. Trust me, I'm with you, but let's see if we can compromise and at least agree on this: **custodians are a valid storage and payment system as long as they NEVER fail to redeem their IOUs**. Now let me detour for a bit again and we will come back to this point.
Some people have just read the previous paragraph and are already cracking their knuckles, ready to point out that that's not really transferring Bitcoin, strictly speaking. And that Alice and Bitcoin don't even really own any Bitcoin at the custodian. Not your keys, not your coins, right?. Trust me, I'm with you, but let's see if we can compromise and at least agree on this: **custodians are a valid storage and payment system as long as they NEVER fail to redeem their IOUs**. If you don't agree on this, you probably shouldn't waste your time reading further because you'll think that I'm talking nonsense. Now let me detour for a bit again and we will come back to this point.
The custodian scaling solution is, by far, the oldest one in Bitcoin's history. Mt. Gox was there way before Lightning was even an idea. Actually, the custodian scaling solution is not even a Bitcoin thing. If you've done a bit of reading about the history of money from authors like Saifedean or Lyn, you already know that the grandpa of Fiat money is gold receipts. Why did those exist? Because gold was hard and expensive to transact with, we couldn't possibly get all the transactions that we needed done by having everyone move around with gold coins and bars . The parallelism with the inability of Bitcoin's base layer to handle all the transactions the world needs to do is funny, isn't it?
The custodian scaling solution is, by far, the oldest one in Bitcoin's history. Mt. Gox was there way before Lightning was even an idea. Actually, the custodian scaling solution is not even a Bitcoin thing. If you've done a bit of reading about the history of money from authors like Saifedean or Lyn, you already know that the grandpa of Fiat money is gold receipts. Why did those exist? Because gold was hard and expensive to transact with and we couldn't possibly get all the transactions that we needed done by having everyone move around with gold coins and bars. The parallelism with the inability of Bitcoin's base layer to handle all the transactions the world needs to do is funny, isn't it?
Now, if we are to be humble and level-headed, I think we should acknowledge that the systems of custodian's IOUs built on top of gold brought a lot of great things. Much trade was done, and much progress was obtained through it. It would have been difficult for merchants that were thousands of kilometers apart to constantly settle between each other with physical gold transfers. Well, if they had had to settle that way, they probably wouldn't have traded at all in the first place. Gold IOUs made this possible, and thus I feel forced to concede that these systems brought good things with them. As we already know, it also brought terrible things down the line.
And this is where we can grab the Bitcoiner machine gun and shit on banks and governments: gold IOUs don't work because they are inevitably captured and corrupted. The physical centralization of gold in the vaults of a few banks makes it easy for a powerful entity to collude with the banks and take control of the system. Make IOUs slightly harder to redeem over time, bring some regulations that increase friction, add a few sparks of propaganda, and voilà, after a few decades, people will become dumb fucks that use the IOUs even AFTER you have openly stated that you are not going to redeem them for gold anymore. You now live in the Fiat world. I'm simplifying things a ton here, and if Lyn Alden would read this, she would probably have a seizure, but I think we can agree that **gold custodians didn't turn out to be a good storage and payment system because they ALWAYS end up failing to redeem their IOUs**, mainly due to centralization and perverse incentives. If you don't agree on this, you probably shouldn't waste your time reading further because you'll think that I'm talking nonsense.
And this is where we can grab the Bitcoiner machine gun and shit on banks and governments: gold IOUs don't work because they are inevitably captured and corrupted. The physical centralization of gold in the vaults of a few banks makes it easy for a powerful entity to collude with the banks and take control of the system. Make IOUs slightly harder to redeem over time, bring some regulations that increase friction, add a few sparks of propaganda, and voilà, after a few decades, people will become dumb fucks that use the IOUs even AFTER you have openly stated that you are not going to redeem them for gold anymore. You now live in the Fiat world. I'm simplifying things a ton here, and if Lyn Alden would read this, she would probably have a seizure, but I think we can agree that **gold custodians didn't turn out to be a good storage and payment system because they ALWAYS end up failing to redeem their IOUs**, mainly due to centralization and perverse incentives.
Now that I've built up all the background and context that I wanted, we reach the interesting part. We have agreed on the idea that custodians are awesome if, and only if, they don't betray their promises. But history teaches us they tend to do so. So the question becomes: what's going to be the custodian's role in Bitcoin's scaling problem? Are they going to be a valid solution? Are they going to disappear into oblivion? Are they going to bring all the evils that came with gold custodians? Are they going to succeed massively and kill all other scaling solutions?