Is Mobick a miracle, a scam, or science? #2

"Rationality in Resource Allocation"

*This article was written by Taemin Oh, the founder of BTCMobick. 

Determining whether resources are distributed fairly is a challenging task due to the lack of a clear definition of fairness itself. However, mainstream economics posits that as transactions are repeated, resources become more rationally distributed, regardless of the initial randomness in allocation. This notion finds its exemplar in "Coase's theorem."

Coase famously emphasized that the initial allocation of rights holds little importance. In a state of freedom, where there is no information asymmetry and transaction costs are low, agreements between parties not only increase individual happiness but also enhance overall social welfare.

For instance, in pre-modern Asian societies, taxes were collected in the form of rice, specialty products, and corvée labor. Corvée labor posed a particular challenge as it was unfair for individuals to gather at the same location simultaneously to perform identical tasks. This inequity stemmed from the differing values of time between a peasant and a year-round goods-selling merchant. In such situations, it was common for the merchant, obligated to provide corvée labor, to send a young peasant with available free time instead. The merchant could pay the young man, who was idle, less than the cost of performing corvée labor. This arrangement was mutually beneficial, as it allowed the merchant to continue their business instead of manual labor, while the young man earned extra income during his free time.

Bitcoin, initially known for its irrational, abnormal, random, and arbitrary distribution, transitions into a rational distribution once it stabilizes. This transformation occurs through voluntary transactions.

Nevertheless, not everyone possesses the same level of information or conviction about unconventional assets like Bitcoin, which are considered uncertain regarding their future value. Real-world transactions occur due to disparities in wealth, information, conviction, and overall knowledge. The subjective value of Bitcoin is directly proportional to the level of information and conviction, which, in turn, correlate with the time and effort invested. Bitcoin typically moves from less committed individuals to those with stronger convictions. Even if someone initially acquired Bitcoin by chance, lacking conviction about its future, they will eventually transfer it to someone with greater faith in its potential.

A notable example is Jeremy Sturdivant, the central figure in the famous story of trading two pizzas for 10,000 BTC. At the time he acquired 10,000 Bitcoins, he was just 19 years old. In a subsequent interview, he revealed that about a year later, he sold his 10,000 Bitcoins for a mere $600. In hindsight, we may lament his decision given the current value of Bitcoin. However, Sturdivant likely believed he was making a wise choice in accepting $600 at the time. The future remains uncertain for all, and every transaction carries inherent risks. The world can be unforgiving, especially when it comes to financial decisions.

In summary: 

Even if the initial distribution of resources is arbitrary or random, it transitions to a rational allocation through transactions. 

Bitcoin is shifting from those who acquired it by chance and lack conviction to those with strong beliefs who voluntarily and actively hold it. 

The initial randomness in Bitcoin's distribution has become almost inconsequential 15 years after its inception.

 Mainstream economists, despite being aware of Coase's theorem, are hesitant to accept the undeniable truth that voluntary transactions have rationalized the entire Bitcoin ecosystem. In essence, they do not view Bitcoin in the same light as their traditional teachings, as they are also influenced by human intuition rather than strict logic.

#Mobick #BTCMobic #Bitcoin