Introduction: Why Bitcoin Deserves a New Framework

One of the first questions people ask about Bitcoin is why it has value. This question is often the entry point to what Bitcoiners call “the rabbit hole”—a journey of study that can consume a hundred hours or more before the pieces begin to cohere. Bitcoin is valuable, but the reason is not intuitive.

This lack of intuition is not evidence of stupidity or weakness. It is evidence of being human. We are sensory-motor organisms shaped by millions of years of evolution in physical environments where value was immediate and tangible: food, shelter, mates, safety. Bitcoin does not fit these categories. It requires a different kind of understanding.

The Tribal Landscape

When interrogating Bitcoin’s value, it is common—and necessary—to investigate the history of this debate in economics. One learns about the labor theory of value from Adam Smith and Karl Marx. One encounters the marginalist revolution and its subjective turn. One discovers Keynesianism, Austrian economics, and modern monetary theory. Each school offers a framework, and each has passionate adherents.

At the end of this journey, I found myself confronting online tribes. This should not have been surprising. Like everything else mediated by social platforms, economic discourse naturally emphasizes tribal affiliation—the sense of belonging to a school of thought, defending its premises, advancing its conclusions against rivals.

It is tempting to complete your analysis, choose a tribe, and then work to advance your side. This temptation is especially strong with money, which touches our lives at the smallest and largest scales. If the wrong model is implemented, the consequences can be catastrophic. The twentieth-century experience with communism stands as stark evidence: tens of millions dead, economies ruined, generations impoverished. Even with differences less extreme, outcomes can vary so dramatically that passions run high. A sense of moral purpose—feeding the poor, protecting a way of life, building a just society—becomes intertwined with the economic theories we advocate.

Bitcoin’s Austrian Roots

Bitcoin’s intellectual roots are entangled with the Austrian school. Its fixed supply, its resistance to central authority, its emphasis on individual sovereignty—these reflect Austrian concerns about sound money and the dangers of monetary manipulation. As Bitcoin has proven itself a juggernaut of transformation spanning countries and classes, the question of where its value comes from—and what, exactly, Bitcoin is—has become pressing for journalists, economists, business leaders, investors, and ordinary people who simply want to save for their futures.

I will be transparent about my priors. I am drawn to Austrian theories. They feel right to me in a way that is difficult to articulate but easy to recognize. I believe Bitcoin is an obvious answer to many problems created by the elasticity and discretion of central bank monetary policy. I predict that Austrian ideas will gradually displace Keynesianism as Bitcoin takes hold in global finance. I view modern monetary theory as a pernicious force and a formidable opponent. I expect the coming decades will see a confrontation between Bitcoin-Austrian ideas and MMT, much as capitalism and communism faced off in the last century. It is my hope—and my probabilistic bet—that this confrontation will not exact nearly the same human toll, though history offers no guarantees.

Setting the Debate Aside

Having stated my position, I am going to set it aside.

This book does not aim to advance Austrian economics against its rivals, nor to litigate the value debates that have consumed economists for centuries. Instead, it starts from first principles to understand what is happening when humans interact with Bitcoin.

My background is in embodied cognition and perceptual psychology. I wanted to examine Bitcoin through this lens—not to replace economic analysis, but to complement it with a framework grounded in how organisms actually perceive and act. This led me down a different rabbit hole, one that clarified much and resolved contradictions I had not expected to dissolve.

Many debates about Bitcoin’s value, I discovered, stem from semantic arguments and unstated assumptions about ethics, priorities, and what constitutes a good life. These are premises we do not all share and never will. There is no universally just standard for value. But there is a way to study Bitcoin and how humans interact with it empirically, without requiring agreement on contested metaphysical or ethical foundations.

The Physical Turn

The body of philosophy surrounding Bitcoin can become exceedingly abstract. It is easy to follow this siren song into debates about the nature of money, the essence of value, the meaning of scarcity. Each time I found myself drifting in this direction while writing this book, I turned back and asked: What is the grounding of this phenomenon in physical reality?

Some leading thinkers still debate whether Bitcoin is physical. It is my contention that Bitcoin is indeed physical—a configuration of matter, sustained by energy, existing as electrons in flash memory and electromagnetic waves propagating across networks. “Digital” does not mean non-physical; it names a mode of physical encoding.

If Bitcoin is physical, then we can study the interaction between this physical structure and the sensory-motor organisms who come into contact with it. This perspective offers something the traditional debates do not: a framework for understanding Bitcoin’s value that is less dependent on the malleable meanings of words and less reliant on a priori assumptions about what people should do, care about, or prioritize.

We begin with what is physically there. The theory follows from the phenomenon, not the other way around.

--- title: "Introduction: Why Bitcoin Deserves a New Framework" --- One of the first questions people ask about Bitcoin is why it has value. This question is often the entry point to what Bitcoiners call "the rabbit hole"---a journey of study that can consume a hundred hours or more before the pieces begin to cohere. Bitcoin is valuable, but the reason is not intuitive. This lack of intuition is not evidence of stupidity or weakness. It is evidence of being human. We are sensory-motor organisms shaped by millions of years of evolution in physical environments where value was immediate and tangible: food, shelter, mates, safety. Bitcoin does not fit these categories. It requires a different kind of understanding. ## The Tribal Landscape When interrogating Bitcoin's value, it is common---and necessary---to investigate the history of this debate in economics. One learns about the labor theory of value from Adam Smith and Karl Marx. One encounters the marginalist revolution and its subjective turn. One discovers Keynesianism, Austrian economics, and modern monetary theory. Each school offers a framework, and each has passionate adherents. At the end of this journey, I found myself confronting online tribes. This should not have been surprising. Like everything else mediated by social platforms, economic discourse naturally emphasizes tribal affiliation---the sense of belonging to a school of thought, defending its premises, advancing its conclusions against rivals. It is tempting to complete your analysis, choose a tribe, and then work to advance your side. This temptation is especially strong with money, which touches our lives at the smallest and largest scales. If the wrong model is implemented, the consequences can be catastrophic. The twentieth-century experience with communism stands as stark evidence: tens of millions dead, economies ruined, generations impoverished. Even with differences less extreme, outcomes can vary so dramatically that passions run high. A sense of moral purpose---feeding the poor, protecting a way of life, building a just society---becomes intertwined with the economic theories we advocate. ## Bitcoin's Austrian Roots Bitcoin's intellectual roots are entangled with the Austrian school. Its fixed supply, its resistance to central authority, its emphasis on individual sovereignty---these reflect Austrian concerns about sound money and the dangers of monetary manipulation. As Bitcoin has proven itself a juggernaut of transformation spanning countries and classes, the question of where its value comes from---and what, exactly, Bitcoin *is*---has become pressing for journalists, economists, business leaders, investors, and ordinary people who simply want to save for their futures. I will be transparent about my priors. I am drawn to Austrian theories. They feel right to me in a way that is difficult to articulate but easy to recognize. I believe Bitcoin is an obvious answer to many problems created by the elasticity and discretion of central bank monetary policy. I predict that Austrian ideas will gradually displace Keynesianism as Bitcoin takes hold in global finance. I view modern monetary theory as a pernicious force and a formidable opponent. I expect the coming decades will see a confrontation between Bitcoin-Austrian ideas and MMT, much as capitalism and communism faced off in the last century. It is my hope---and my probabilistic bet---that this confrontation will not exact nearly the same human toll, though history offers no guarantees. ## Setting the Debate Aside Having stated my position, I am going to set it aside. This book does not aim to advance Austrian economics against its rivals, nor to litigate the value debates that have consumed economists for centuries. Instead, it starts from first principles to understand what is happening when humans interact with Bitcoin. My background is in embodied cognition and perceptual psychology. I wanted to examine Bitcoin through this lens---not to replace economic analysis, but to complement it with a framework grounded in how organisms actually perceive and act. This led me down a different rabbit hole, one that clarified much and resolved contradictions I had not expected to dissolve. Many debates about Bitcoin's value, I discovered, stem from semantic arguments and unstated assumptions about ethics, priorities, and what constitutes a good life. These are premises we do not all share and never will. There is no universally just standard for value. But there is a way to study Bitcoin and how humans interact with it empirically, without requiring agreement on contested metaphysical or ethical foundations. ## The Physical Turn The body of philosophy surrounding Bitcoin can become exceedingly abstract. It is easy to follow this siren song into debates about the nature of money, the essence of value, the meaning of scarcity. Each time I found myself drifting in this direction while writing this book, I turned back and asked: *What is the grounding of this phenomenon in physical reality?* Some leading thinkers still debate whether Bitcoin is physical. It is my contention that Bitcoin is indeed physical---a configuration of matter, sustained by energy, existing as electrons in flash memory and electromagnetic waves propagating across networks. "Digital" does not mean non-physical; it names a mode of physical encoding. If Bitcoin is physical, then we can study the interaction between this physical structure and the sensory-motor organisms who come into contact with it. This perspective offers something the traditional debates do not: a framework for understanding Bitcoin's value that is less dependent on the malleable meanings of words and less reliant on *a priori* assumptions about what people *should* do, care about, or prioritize. We begin with what is physically there. The theory follows from the phenomenon, not the other way around.