SVB gives masterclass in Why Bitcoin Matters

Actions speak Louder than words. SV “builders” who laughed at Bitcoin and called it boring because there’s “no yield” and it’s “too hard to custody” are now learning a lesson in modern banking.

The Q remains. Will they learn or will they take a page out of the Wall St playbook?

4 years ago, I wrote the essay that landed me on the map: “Why Bitcoin Matters”.

In 2023 the prestigious Silicon Valley Bank did a better job than I could ever have done explaining it, by showing first hand why it does. All in a matter of 48hrs.

Counterparty risk is a real thing. Crypto bros, bankers and as is now clear, Silicon Valley, never believed it mattered. They derided Bitcoiners for their stance on "Not your Keys, not your coins" and maintained that self custody was too hard, and Bitcoin too boring.

Everyone wants "Yield" along with "Risk Free" which are things that do not belong in the same sentence. In Crypto you have outright Ponzi schemes, with yield on top of zero productivity, now we've seen that trad-banking is just a more convoluted form of Ponzi masquerading as safe

SVB and others blew themselves up with risk free assets! Treasuries!! The bond market did what it was not “supposed” to do, at least according to the “experts”, and caught them with their pants down. Of course, Bitcoiners "Told you so" bc of Central Bank & Gov't shenanigans.

The issue now is not that this has happened, but that the result may likely be a bail out of the bank by the government or central bank, which is merely a proxy for "other people's money". In other words; "upside for me, and downside for thee".

This is a very telling moment.

For Silicon Valley and for Bitcoin.

We’ll find out whether Silicon Valley are builders or political grifters and complainers.

A bail out here will set a bad precedent and break the last leg of integrity beneath the shaky Silicon Valley table.

Playing games with fire can be fun…until you burn yourself. Just don't go running to mommy to save you. If someone bails you out, you've lost the opportunity to learn, and someone else will have had to clean up your mess for you. This is not only wrong, but immature.

Bitcoin might be a "boring" Savings technology, but Savings = The cornerstone of civilization.

These sort of games, and the kind of moral hazard that emerges on the other side of it is much harder on an equity-based, central-bankless Bitcoin standard.

If you'd like to read the full article, you can find there here on the Simply Bitcoin blog.

And follow me here on memo'd for more of these Bitcoin memos.