Inflation hedge and store of value arguments

claims/bitcoin-esg.md

@@ -26,8 +26,6 @@ Bitcoin is not compatible with ESG investing.
 * [Market manipulation](../concepts/market-manipulation.md)
 
 ## References
-
-
 1. Gallersdörfer, Ulrich, Lena Klaaßen, and Christian Stoll. ‘Accounting for Carbon Emissions Caused by Cryptocurrency and Token Systems’, 2021. https://arxiv.org/abs/2111.06477.
 1. Goodkind, Andrew L., Benjamin A. Jones, and Robert P. Berrens. ‘Cryptodamages: Monetary Value Estimates of the Air Pollution and Human Health Impacts of Cryptocurrency Mining’. Energy Research and Social Science 59, no. March 2019 (2020): 101281. https://doi.org/10.1016/j.erss.2019.101281.
 1. Gallersdörfer, Ulrich, Lena Klaaßen, and Christian Stoll. ‘Accounting for Carbon Emissions Caused by Cryptocurrency and Token Systems’, 2021. https://arxiv.org/abs/2111.06477.

claims/crypto-unbanked.md

@@ -16,8 +16,4 @@ The purpose of retail banking services is to provide stable, reliable and safe m
 1. Kapsis, I. (2021). Should we trade market stability for more financial inclusion? The case of crypto-assets regulation in EU. FinTech, Artificial Intelligence and the Law: Regulation and Crime Prevention, 85–104. https://doi.org/10.4324/9781003020998-9
 1. Sen, A., Lindquist, J., & Kolling, M. (2020). Who’s Cashing in? Contemporary Perspectives on New Monies and Global Cashlessness (Vol. 19). Berghahn Books.
 1. Swartz, L. (2020). New money: How payment became social media. Yale University Press. https://yalebooks.yale.edu/book/9780300233223/new-money
-1. Vasudevan, R. (2020). Libra and Facebook’s Money Illusion. Challenge, 63(1), 21–39. https://doi.org/10.1080/05775132.2019.1684662
-
-## References
-* [@koning_bitcoin_2020]
-* [@knauer_what_2019]
+1. Vasudevan, R. (2020). Libra and Facebook’s Money Illusion. Challenge, 63(1), 21–39. https://doi.org/10.1080/05775132.2019.1684662

claims/digital-gold.md

@@ -8,19 +8,10 @@ Bitcoin has no historical track record of being a store of value and lacks the m
 Even if bitcoin could function as a new gold standard. The [gold-standard](../concepts/gold-standard.md) and the notion of [sound-money](../concepts/sound-money.md) are undesirable foundations for a [currency](../concepts/currency.md) and were subject to extreme shocks and deflationary spirals, and as such were abandoned in the mid 20th century in favour of the [central-banks](../concepts/central-banks.md) and fiat monetary system.
 
 ## References
-
 1. Cembalest, M. (2022). The Maltese Falcoin: On Cryptocurrencies and Blockchains (p. 31).
 1. Allon, F. (2018). Money after Blockchain: Gold, Decentralised Politics and the New Libertarianism. Australian Feminist Studies, 33(96), 223–243. https://doi.org/10.1080/08164649.2018.1517245
 1. Bernanke, B. S. (2004). Essays on the Great Depression. Princeton University Press.
 1. Caferra, R., Tedeschi, G., & Morone, A. (2021). Bitcoin: Bubble that bursts or Gold that glitters? Economics Letters, 205, 109942. https://doi.org/10.1016/j.econlet.2021.109942
 1. Doctorow, C. (2022, February 3). Pluralistic: 03 Feb 2022 – Pluralistic: Daily links from Cory Doctorow. https://pluralistic.net/2022/02/03/liquidation-preference/
 1. Selmi, R., Bouoiyour, J., & Wohar, M. E. (2022). “Digital Gold” and geopolitics. Research in International Business and Finance, 59, 101512. https://doi.org/10.1016/j.ribaf.2021.101512
-1. Wang, G., Tang, Y., Xie, C., & Chen, S. (2019). Is bitcoin a safe haven or a hedging asset? Evidence from China. Journal of Management Science and Engineering, 4(3), 173–188. https://doi.org/10.1016/j.jmse.2019.09.001
-
-## References
-* [@cembalest_maltese_2022]
-* [@taleb_bitcoin_2021]
-* [@caferra_bitcoin_2021]
-* [@weisenthal_bitcoin_nodate]
-* [@krugman_bitcoin_2018]
-* [@bernanke_essays_2004]
+1. Wang, G., Tang, Y., Xie, C., & Chen, S. (2019). Is bitcoin a safe haven or a hedging asset? Evidence from China. Journal of Management Science and Engineering, 4(3), 173–188. https://doi.org/10.1016/j.jmse.2019.09.001

claims/hedge-inflation.md

@@ -1,11 +1,15 @@
 # Are crypto assets a hedge against inflation?
+ Since [crypto asset](../concepts/cryptoasset.md) have no exposure to domestic commodities there is no evidence of anti-correlation with a basket of goods that would be inversely to the national [currency](../concepts/currency.md) in times of inflation. Instead crypto assets seem largely correlated with the broader [stock](../concepts/stock.md) market and as such are not a hedge against any macroeconomic factors of either inflation or equity markets.
+ 
+[Crypto assets](../concepts/cryptoasset.md) are also not a reliable [store of value](store-of-value.md) in times of market instability, and as such do not provide a safe haven of any form since they are largely correlated with the broader market and exposed to the same shocks.
+
+ In his whitepaper *Bitcoin, Currencies, and Fragility*, Nassim Taleb deconstructs the "inflation hedge" thesis:
+ 
+> The experience of March 2020, during the market panic upon the onset of the pandemic, when bitcoin dropped farther than the stock market —and subsequently recovered with it upon the massive injection of liquidity is sufficient evidence that it cannot remotely be used as a tail hedge against systemic risk. Furthermore, bitcoin appears to respond to liquidity, exactly like other bubble items. It is also uncertain what could happen should the internet experience a general, or an even a regional, outage — particularly if it takes place during a financial collapse.
 
 ## References
 * Cembalest, Michael. 2022. ‘The Maltese Falcoin: On Cryptocurrencies and Blockchains’.
 * Shaffer, Daniel S. 2010. Profiting in Economic Storms: A Historic Guide to Surviving Depression, Deflation, Hyperinflation, and Market Bubbles. John Wiley & Sons.
 * Taleb, Nassim Nicholas. 2021. ‘Bitcoin, Currencies, and Fragility’. ArXiv:2106.14204 [Physics, q-Fin], July. http://arxiv.org/abs/2106.14204.
 * Wang, Gangjin, Yanping Tang, Chi Xie, and Shou Chen. 2019. ‘Is Bitcoin a Safe Haven or a Hedging Asset? Evidence from China’. Journal of Management Science and Engineering 4 (3): 173–88. https://doi.org/10.1016/j.jmse.2019.09.001.
-* Frisch, Helmut. 1983. Theories of Inflation. Cambridge University Press.
-
-## References
-* [@cembalest_maltese_2022]
+* Frisch, Helmut. 1983. Theories of Inflation. Cambridge University Press.

claims/is-bitcoin-currency.md

@@ -1,7 +1,7 @@
 # Bitcoin cannot function as a currency
 Unlike the namesake of "cryptocurrency" might imply, [bitcoin](../concepts/bitcoin.md) is not a [currency](../concepts/currency.md). It does not fulfil the economic definition of [money](../concepts/money.md).  Instead bitcoin is best understood as a  [speculative](../concepts/speculation.md) [cryptoasset](../concepts/cryptoasset.md) or [gambling](../concepts/gambling.md) product.
 
-Since bitcoin is not issued by a sovereign state or [central-banks](../concepts/central-banks.md) there is no central party to manage the [deflationary](../concepts/deflationary.md) spirals that occur in the [price-formation](../concepts/price-formation.md) of the asset. Therefore it is subject to wild and uncontrollable volatility that makes it unsuitable as a *means of exchange*. No amount of technology can fix the volatility problem as it is a function of the economic design of the asset and its fixed supply. This arises out of the political imaginaries of the [neo-metallism](../notes/neo-metallism.md) school and [austrian-economics](../concepts/ideologies/austrian-economics.md) that informed the design of the bitcoin to resemble the historical [gold-standard](../concepts/gold-standard.md) and the conception of heterodox ideas of [sound-money](../concepts/sound-money.md). 
+Since bitcoin is not issued by a sovereign state or [central-banks](../concepts/central-banks.md) there is no central party to manage the [deflationary](../concepts/deflationary.md) spirals that occur in the [price-formation](../concepts/price-formation.md) of the asset. Therefore it is subject to wild and uncontrollable volatility that makes it unsuitable as a *means of exchange*. No amount of technology can fix the volatility problem as it is a function of the economic design of the asset and its fixed supply. This arises out of the political imaginaries of the [neo-metallism](../notes/neo-metallism.md) school and [Austrian economics](../concepts/ideologies/austrian-economics.md) that informed the design of the bitcoin to resemble the historical [gold-standard](../concepts/gold-standard.md) and the conception of heterodox ideas of [sound money](../concepts/sound-money.md). 
 
 As evidenced by real world context there are very few businesses that are willing to transact in bitcoin because of the price volatility. Companies that attempt to do this, such as Tesla, effectively issue an [option](../concepts/derivative.md) in which the goods or services payed are quoted at a strike price and if the transaction is reversed or goods returned the amount will be returned to the customer in a different currency at the strike price. This terms commerce into a [security](../concepts/security.md) transaction and is a taxable event.
 
@@ -26,12 +26,4 @@ Since bitcoin is [deflationary](../concepts/deflationary.md) it encourages hordi
 1. Plant, Luke. 2022. ‘The Technological Case against Bitcoin and Blockchain’. Luke Plant’s Home Page. 5 March 2022. https://lukeplant.me.uk/blog/posts/the-technological-case-against-bitcoin-and-blockchain/.
 1. Stinchcombe, Kai. 2018. ‘Blockchain Is Not Only Crappy Technology but a Bad Vision for the Future’. Medium (blog). 9 April 2018. https://medium.com/@kaistinchcombe/decentralized-and-trustless-crypto-paradise-is-actually-a-medieval-hellhole-c1ca122efdec.
 1. White, Molly. 2022a. ‘Cryptocurrency Off-Ramps, and the Shift towards Centralization’. Molly White. 12 February 2022. https://blog.mollywhite.net/off-ramps/.
-1. ———. 2022b. ‘Cryptocurrency’s Robinhood Effect’. Molly White. 17 February 2022. https://blog.mollywhite.net/cryptocurrencys-robinhood-effect/.
-
-## References
-* [@taleb_bitcoin_2021-1]
-* [@corradi_disenchantment_2018]
-* [@nabilou_ignorance_2019]
-* [@krugman_brutal_2021]
-* [@krugman_technobabble_2021]
-* [@varoufakis_what_2021]
+1. ———. 2022b. ‘Cryptocurrency’s Robinhood Effect’. Molly White. 17 February 2022. https://blog.mollywhite.net/cryptocurrencys-robinhood-effect/.

claims/is-disrupt-hegemony.md

@@ -1,3 +1,5 @@
 # Is web3 a means to dismantle the American tech hegemony?
 
+See [recentralization](../concepts/recentralization.md).
+
 ## References

claims/is-legal.md

@@ -10,10 +10,4 @@ Crypto assets are unlicensed [security](../concepts/security.md) contracts for u
 1. Huang, Sherena Sheng. 2021. ‘Crypto Assets Regulation in the UK: An Assessment of the Regulatory Effectiveness and Consistency’. Journal of Financial Regulation and Compliance.
 1. Rae, Shaela W, and Lorraine Mastersmith. 2019. ‘Crypto Asset Trading in Canada: Entering a New Era of Regulation’. Banking & Finance Law Review 35 (1): 153–85.
 1. Shri T Rabi Sankar. n.d. ‘Cryptocurrencies – An Assessment’. Reserve Bank of India. Accessed 2 March 2022. https://rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1196.
-1. Zwitter, Andrej, and Jilles Hazenberg. 2020. ‘Decentralized Network Governance: Blockchain Technology and the Future of Regulation’. Frontiers in Blockchain 3. https://www.frontiersin.org/article/10.3389/fbloc.2020.00012.
-
-## References
-* [@hacker_crypto-securities_2018]
-* [@azgad-tromer_crypto_2018]
-* [@ivaniuk_cryptocurrency_2020]
-* [@rae_crypto_2019]
+1. Zwitter, Andrej, and Jilles Hazenberg. 2020. ‘Decentralized Network Governance: Blockchain Technology and the Future of Regulation’. Frontiers in Blockchain 3. https://www.frontiersin.org/article/10.3389/fbloc.2020.00012.

claims/is-new-financial-system.md

@@ -1,5 +1,4 @@
 # Is web3 a means to rebuild the global financial system?
+[is-bitcoin-currency](is-bitcoin-currency.md)
 
-## References
-
-
+## References

guide/index.md

@@ -29,6 +29,7 @@ Understand the terminology used to describe crypto and web3.
 * [Zero-sum game](../concepts/zero-sum-game.md)
 * [Memecoins](../concepts/memecoin.md)
 * [Assets](/concepts/assets.md)
+* [Store of value](../claims/store-of-value.md)
 * [Speculative asset](/concepts/speculation.md)
 * [Market manipulation](../concepts/market-manipulation.md)
 * [DeFi](../concepts/defi.md)