Bitcoin How We Became Gods

If Bitcoin were a mechanical watch, the fee market (not the free market) would be the mechanism making everything tick.

This is where everything starts and ends.

This is where censorship resistance comes from and where the precious resource of block space gets priced into energy consumption.

The Bitcoin fee market is the first man-made free market that ever existed.

In a free market:

  • No third party can intervene in pricing
  • No one can stop you from participating
  • Participation is voluntary

Most markets that emerge naturally are actually free; it is the man-made ones that usually struggle with this property.

If you believe in the efficient-market hypothesis, then you know how important markets are and how they can help us to solve many problems.

Most of the problems that humans have ever faced were coordination problems. One obvious solution is to create a dominance hierarchy and elect a leader on top of it. This worked wonderfully for a long time, but as soon as our world became complex, which it did because we made it so, this started being less and less effective.

Another issue with such structures is that there is one single point of failure, which makes them prone to corruption. Markets have the same issue if they are not built on trustless, censorship-resistant infrastructure.